Pharmaceutical Society of Great Britain v Boots Cash Chemists (50) invitation to treat is not an offer

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Kelly Dennis
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1 ELEMENTS OF A BINDING LEGAL CONTRACT Offer and Acceptance Sufficient Consideration Certainty and Completeness Intention to Create Legal Relations Capacity WEEK ONE Fact of Agreement OFFERS CIRCULARS, CATALOGUES, ADS Carlill v Carbolic Smoke Ball Co not a mere puff Lefkowitz v Great Minneapolis Surplus Store, Inc DISPLAYS OF GOODS Pharmaceutical Society of Great Britain v Boots Cash Chemists (50) invitation to treat is not an offer AUCTIONS Barry v Davies TENDERS Spencer v Harding tenderer usually under no obligation to accept any tender Blackpool & Fylde Aero Club v Blackpool Borough Council exception where tenderer represents they will accept a tender or follow a certain process REWARDS R v Clarke Shuey v US Offers to the world SUPPLY OF INFORMATION Harvey v Facey Stevenson, Jaques & Co v McLean inquiry is not a counter-offer

2 Gibson v Manchester City Council query about price reduction not a counter-offer ONLINE OFFERS s14b of the Electronic Transaction Act 2000 (NSW) invitation to treat where not addressed to a specific party and generally accessible to parties making use of information systems such as computers / tablets, provided they do not clearly indicate intention to be bound in case of acceptance. DURATION OF OFFERS Lapse of time Revocation by offeror Rejection by offeree Failure of a condition or contingency Death Hyde v Wrench counter-offer = implied rejection Cooke v Oxley party that gives additional time not bound to wait Shuey v US revocation of public offers requires appropriate public notice Goldsbrough, Mort & Co Ltd v Quinn revocation invalid if consideration given Dickinson v Dodds revocation must be communicated Mobil Oil Australia Ltd v Lyndel Nominees Pty Ltd withdrawal where performance has commenced Financings Ltd v Stimson failure of a condition, offer lapses damaged car Nielsen v Dysant Timbers Ltd failure of condition offeror not bound if offer fundamentally changes. ACCEPTANCE 1. Must be unequivocal (Hyde v Wrench) 2. Must be in reliance of the offer (R v Clarke) 3. Must correspond with the offer (Hyde v Wrench & Turner Kempson v Camm = add terms) 4. Can be express or implied silence not valid (Felthouse v Bindley) 5. Conduct may displace communication rule (Brogden v Metropolitan Railway Company) (Empirnall Holdings v Machon Paull Partners) - conduct displacing communication rule 6. Must be communicated (Powell v Lee) but may be dispensed with (Carlill) Valid acceptance = consensus ad idem which is foundation of contract law: Household Fire. POSTAL ACCEPTANCE RULE Byrne v Van Tienhoven revocation invalid after postal acceptance Henthorn v Fraser revocation invalid after postal acceptance

3 Bressan v Squires postal acceptance does not apply if the offer expressly or impliedly requires acceptance to be received by the offeror Household Fire & Carriage Accident Insurance Co (Ltd) v Grant irrelevant whether letter reaches its destination Bramwell LJ (dissenting): categorised rule as arbitrary and found problematic the ability of offeree to revoke acceptance. Revocation by speedier means: Dunmore v Alexander supports withdrawal and in NZ Wenkheim v Arndt suggests rejection of offer is ineffective. Brinkibon Ltd v Stahag Stahl und Stahlwarenhandelsgesellschaft mbh telex not captured under postal acceptance rule as it is instantaneous communication BATTLE OF THE FORMS Butler Machine Tool Co v Ex-Cell-O Corp (England) Ltd final counter offer in a series is the affirmed agreement. WEEK TWO Certainty & Completeness Australian Goldfields NL (in liq) v North Australian Diamonds 40 WAR 191 Barwick CJ at 199: Void for uncertainty if language used in relation to an essential term is so obscure and incapable of any precise or definite meaning that the court is unable to ascertain the contractual intention Void for uncertainty if incomplete agreement on all essential terms NOT void if merely ambiguous: McDermott v Black Booker Industries Pty Ltd v Wilson Parking (Qld) Pty Ltd Completeness: essential term may be left to 3 rd person to determine lease cannot agree to agree sometime in future Insurance Company of Australia Pty Limited v Phillips uncertain provision will be severed if it is divisible when regarding the contract as a whole. Whitlock v Brew lease provision for reasonable terms uncertain and void, but because could not be severed, whole contract was void. G Scammell & Nephew Ltd v Ouston may examine previous dealings to construe Barbagallo v Clifton Fletcher Pty Ltd fair market value - may be determined by court AGREEMENTS TO NEGOTIATE IN GOOD FAITH Walford v Miles generally unenforceable difficult to say whether termination of negotiation was in good/bad faith, impossible to assess damages as agreement may never have been reached United Group Rail Services Ltd v Rail Corporation of NSW clause for an obligation to undertake good faith negotiation in genuine attempt to reach agreement not incomplete (Allsop P)

4 Coal Cliff Collieries Pty Ltd v Sijehama Pty Ltd agreement to contract too vague Kirby P indicated may be enforceable if draft with more detail and included consideration. AGREEMENTS SUBJECT TO CONTRACT Masters v Cameron - agreement to agree is not an enforceable contract. Where parties enter into agreement but contemplate formal document there are three categories: i) concluded agreement intend immediately bound - parties to execute formal contract = binding ii) concluded agreement reached performance of term conditional upon execution of formal document = binding iii) no concluded agreement reached no intention to bound until execution of formal contract iv) variation of first category intend to be immediately bound but expect to make further contract to replace the first that will contain additional terms. Assignment of any of the above categories depends on language of the contract. Oral agreements for sale of land examined using these criteria. Consideration Executed consideration = act Executory consideration = promise Beaton v McDivitt - Consideration is the price in return for the promisor s promise / quid pro quo. Without consideration = no contract, only a promise or a gift. Frustrated contract but found consideration was present (farmed land, built house and road).three possible outcomes in cases of promise/offer to transfer property: i) promise to transfer subject to occurrence of an event or condition = unenforceable ii) promise to transfer after which promisor allows promisee to act to his detriment in reliance of promise. Equity may prevent promisor from insisting rights and enforcement. iii) Promise contains express or implied request by the promisor to perform act/fulfil condition (Carlill) Dunlop Pneumatic Tyre Co Ltd v Selfridge & Co Ltd fundamental except for deeds promise can be enforced only if consideration have moved from the promisee (but not necessarily to the promisor). Doctrines of privity, consideration and agency applied. 1. MUST BE BARGAINED FOR Must be established that reciprocal act/promise is given at the request of the promisor and in reliance upon the promisor s promise. Bilateral = reliance clear, Unilateral = reliance unclear.

5 Australian Woollen Mills Pty Ltd v The Commonwealth (99) buying wool condition precedent to entitlement or gift, no offer/request/invitation to buy wool (opposed to Carlill where there was an invitation to use product and inconvenience caused). R v Clarke 2. ONLY A PARTY PROVIDING CONSIDERATION CAN ENFORCE THE PROMISE Dunlop Pneumatic Tyre Co Ltd v Selfridge & Co Ltd Coulls v Bagot s Executor & Trustee Co Ltd privity where a promise is made to joint promisees then either promisee can enforce even though consideration only moved from one (Windeyer J dissenting) held Mrs Coulls not party to contract and cannot enforce. 3. PAST CONSIDERATION IS NOT CONSIDERATION Eastwood v Kenyon - promise to pay for past act of paying for new wife s education Roscorla v Thomas after sale promised horse free from vice = no consideration for new promise Pao On v Lau Yiu Long exception act done before promise to pay (executed consideration) can sometimes be consideration for a promise and legally recoverable. Re Casey s Patents v Casey - A past service raises an implication at the time it was rendered, that it was to be paid for (Bowen LJ) 4. CONSIDERATION CANNOT BE ILLUSORY British Empire Films Pty Ltd v Oxford Theatres Pty Ltd consideration cannot be in the form of a promise that the promisor has a discretion or option to perform (unless goes to discretion as to manner of performance) Placer Development Limited v Commonwealth a promise to pay an unspecified sum that is discretionary is not enforceable consideration vague and illusory 5. CONSIDERATION NEED NOT BE ADEQUATE MUST BE SUFFICIENT Woolworths Ltd v Kelly Must be sufficient but need not be adequate Wolfe v Permanent Custodians Limited peppercorn principle can be as insignificant as pcorn Chappel & Co Ltd v Nestle & Co Ltd chocolate wrappers as consideration Thomas v Thomas - 1 sufficient consideration Wigan v Edwards consideration must not be in the form of a promise to perform an existing contractual duty Stilk v Myrick consideration cannot be in the form of an act that the promisor was already contractually obliged to perform no fresh consideration provided for promise of extra wages. The practical benefit decisions are at odds with this ruling. PRACTICAL BENEFIT Williams v Roffey Bros & Nicholls (Contractors) Ltd Roffey subcontracted renovation to Williams promised increased payment to assist Williams who did not finish Roffey suffered

OFFER 3 ACCEPTANCE.5 CONSIDERATION.6 PROMISSORY ESTOPPEL. 7 INTENTION.7 CERTAINTY/COMPLETENESS. 9 CAPACITY. 11 PRIVITY. 12 FORMALITIES.

OFFER 3 ACCEPTANCE.5 CONSIDERATION.6 PROMISSORY ESTOPPEL. 7 INTENTION.7 CERTAINTY/COMPLETENESS. 9 CAPACITY. 11 PRIVITY. 12 FORMALITIES. CONTRACTS OFFER 3 ACCEPTANCE.....5 CONSIDERATION...6 PROMISSORY ESTOPPEL.... 7 INTENTION..7 CERTAINTY/COMPLETENESS... 9 CAPACITY.. 11 PRIVITY.. 12 FORMALITIES. 13 ILLEGALITY. 14 TERMS.... 16 CONSTRUCTION.....19