agrrement offer and acceptance

        According to the facts it appears that Tariq would be eligible to receive the ticket as he has accepted and fulfilled all the requirements of the offer. He spent over £200, completed the slogan and handed the recite and the slogan in before the offer was revoked.

Rubina did not see the advertisement until after she had spent £200 thus raising the question of whether an offer can be accepted by someone who does not know about it. It is generally thought that a person cannot accept an offer of which they are unaware, because in order to create a binding contract the parties must reach agreement. If their wishes merely happen to coincide that may be very convenient for both but it does not constitute a contract and cannot legally bind them. The cases on this matter are inconclusive but the fact that Rubina does not know about the offer until after she has spent £200 would indicate that she would not be eligible to receive the ticket. Clearly an offer cannot take effect until it has been received by the offeree so they cannot accept something of which they are unaware, In R v Clarke, anybody who gave information on a murder case would either get money or a pardon. Claimant saw the offer, gave information and got a pardon he later wanted the money as well. At the time he was only thinking about the pardon and the offer of the money was like it had not been communicated to him because he was acting as though he was unaware of the offer and he was not entitled to the money. If Rubina spent a further £200 on the 4th of October when she found out about the offer then she would have had a contract.

By the time Jane hands in her recites and slogan the offer by Sports 4 All had already been revoked. Revocation is a means by which the offeror can terminate the offer by withdrawing the offer before acceptance this happened in Payne v Cave. Jane is still entitled to receive the ticket offered by Sports 4 All because an offer to enter in to a unilateral contract cannot be revoked once the offeree has commenced performance (revocation of unilateral offers can lead to injustice and abuse). Withdrawal of an offer is only lawful anytime up to acceptance. Since Jane has already accepted the offer the revocation did not apply to her. In Errington v Errington a father bought a house for his son and daughter in law to live in, promising that, when they had paid of the mortgage, he would transfer legal title to them. He died and other family members sought possession but failed. The court held that the fathers promise could not be withdrawn while the couple kept up the mortgage repayments, after which the house would be legally theirs. There was a unilateral contract where acceptance and performance were one and the same. Lord Denning explained ‘the fathers promise was a unilateral contract...the house in return for...paying the instalments. It could not be revoked...once the couple entered on performance...but it would cease to bind him if they left incomplete and unperformed, which they have not done. This is the same principle that applies to rewards and thus for Jane.   It is a question of fact whether Jane has done enough to amount to starting to perform the act of acceptance. She has because she had spent £150 and also completed the slogan before 5th October which I believe the courts would justify as a substantial amount of performance.

In Tom’s case the issues centres on whether there has been effective communication of revocation. In order for revocation to be effective it has to be communicated but not necessarily by the offeror. However there are exceptions in the case of unilateral contracts. The communication of withdrawal must be made by a method which reaches substantially the same audience as the original offer (Shuey v United State). So even though the revocation was not communicated to everyone it would still be effective.  Again this will be a question of fact whether the notices on the recites satisfy this requirement, when the original offer was made by an advertisement on the website. Since Robin was informed about the revocation of Sports 4 Alls offer by someone who works for the company the revocation is effective. Dickinson v Dodds makes it clear that that information from a third party can amount to a revocation, and if this is the case, the offer ceases to be available. However in Dickinson’s case the message from the third party was such that the revocation was as clear as if the offeror had said it himself, if for any reason it was not the case here (if the worker was known t be untrustworthy, for example), there would be no revocation, and the offer would still be available.  If Toms friend had informed him about the revocation and he handed the slogan and recites not knowing the offer was revoked there would still be no contract despite the fact that he did not see the revocation notices.

In the case with Dean he does not have a contract since he failed to abide by the terms off the offer. The terms of the offer required recites of over £200 whereas he handed only £200 worth of recites. According to the facts it appears that Dean did not personally spend the money, his mum did it appears from the facts that only one person was to fulfil the terms of the offer. Dean failed to accept all the terms of the offer unconditionally resulting in no acceptance. If a condition of the offer fails there can be no offer, Financings Ltd v Stimson.

In conclusion everyone apart from Jane and Tariq does not have a contract with Sports 4 All. There was a unilateral offer and acceptance was by conduct. Revocation was communicated effectively and anyone attempting to apply after the closing date would not have a contract as a result of lapse of time.

In order to have a legally binding contract consideration must be present otherwise there will be no contract. Consideration has been defined as either a detriment or a benefit to the promisor. In order for consideration to exist certain requirements need to be met, consideration needs to be sufficient, part payment of debt is not.  According to the rule in Pinnel case Sports 4 All may have a claim for insisting on being paid the full amount by the golf club. At common law the old case of Pinnel states that the creditor is not bound by his promise. Pinnels case was confirmed in Foakes v Beer, in this case Foakes owed money to Beer. Beer agreed to take no further action if foakes paid an initial sum and then paid the rest in instalments, Foakes made the payments as agreed and Beer sued Foakes for the interest previously waived and succeeded. The promise to pay a debt was not regarded as sufficient consideration as there was no additional benefit moving from Foakes to Beer that was not already owed to her. In R v Selectmove,a company that owed tax to the Inland Revenue offered to pay the debt in instalments. It was told that it would be contacted by the IRC if this was unsatisfactory and began to pay off its debt by instalments. The IRC then insisted on all arrears of tax being paid immediately or it would begin winding-up procedures against the company. The company unsuccessfully argued on the basis of William v Roffey that its promise to carry out an existing obligation was good consideration for the agreement to pay by instalments because the IRC got the benefit of all the money being paid. The Court distinguished this case since it involved provision of goods and services and not payment of an existing debt so the precedent in Foakes v Beer was applied and the IRC was not bound by the agreement to accept payment by instalments.

There are limitations to the rule in Pinnels and the golf club  may argue Prommisory estoppel in their defence. Prommisory estoppel is an equitable principle and its general meaning is an impediment or bar to a right of action arising from ones own act. Promissory estoppel is one form of estoppel that prevents a person going back on a promise of future action. It may be used to enforce promises which would otherwise fail for the lack of consideration as in our case. The case of Hughes v Metropolitan Railway was one of the first cases in which the doctrine was applied. The doctrine was later heard of in Central London Property Trust v High Trees House  but where from 1937 the defendants leased a block of flats from the claimant to sub-let to tenants. During the war the defendant was unable to pay the rent. The claimant agreed to accept half rent, which the defendant then paid. By 1945 the flats were all let and the claimant wanted the rent returned to its former level and sued for the last two quarters. The decision is pure application of Pinnel’s Rule. Lord Denning said in obiter that if they had tried to sue for the extra rent for the whole of the war period promissory estoppel would have prevented them on going back on the promise on which the defendants had relied.

Certain Conditions need to be fulfilled before the doctrine of promissory estoppels can apply.

There must already be a contractual relationship between the parties before promissory estoppels can be raised. No new rights are created, the doctrine operates by only way of defence and not as a cause of action. This can be seen in Combe v Combe.

There must be a promise, either by words or by conduct not to enforce a person’s full legal rights and that its effect must be clear and unambiguous. This was shown in Woodhouse Israel Cocoa v Nigerian Produce Marketing .

  Legal rights suspended rather the extinguished. This was however not the case in Ajayi v Briscoe where there was no evidence that the defendant had reorganised his business and therefore there had been no alteration of his position.

Promisee must have acted to his detriment – The promisee must have either acted on the promise of the promisor, or at least altered his position in reliance on the promise. The tenant suffered a detriment in the Hughes case.

The promisee must have acted equitably – Illustrations of such situations would be if the promisee cannot be restored to the position held before they acted in reliance on the promise, or if the party claiming promissory estoppel in such a way that it would be inequitable to allow them to take advantage of it. The latter was the case in D & C Builder’s v Rees, builders were owed for work they had done for the Reeses. They waited several months for the payment but when they were in danger of going out of business, they accepted an offer by the Reeses to pay £300 in full satisfaction of the debt. They then sued for the balance and succeeded. Because of Pinnels Rule, they were not bound by the agreement to accept less. Lord Denning identified that this was extracted from them under pressure. In this case it could be argued that Sports 4 All acted unfairly knowing that Sports 4 All were in financial difficulty and desperate for cash. The golf club could argue that they relied on Sports 4 Alls promise and thus should not pay the remaining debt.  In Selectmove, they tried to rely on equitable estoppels to prevent the Inland Revenue reneging on an agreement for payment of tax by instalments. This argument was rejected.  

Despite the Golf Clubs claim in estoppel it appears that Sports 4 All will most likely be successful in their claiming the full amount of debt owed as a result of the Pinnels rule and also because the Rees’s case is extremely similar to Sports 4 Alls and in that case they recoverd the full amount owing.  The Golf Clubs claim in estoppels will probably fail due to them not acting equitably.

To create a binding contract the terms of the agreement must be certain, some essential element need not be omitted from the agreement nor should the terms be vague. If this is not complied with there will be no contract. This principle is reiterated in a number of cases. In Scammell v Ouston, placed an order for a truck ‘on usual hire purchase terms’, was held too vague as there were a number of possible hire purchase agreements. The court ruled that no contract had come into existence. In Loftus v Roberts, an actress was engaged for a provincial tour. The contractual agreement provided that if the play came to London the actress would be engaged at a salary "to be mutually arranged between us." Held that there was no contract because the statement was too vague. In May and Butch v R it was held that a contract may be defeated if there is uncertainty in a fundamental term, and no means of resolving it. In Guthing v Lynn a contract for the sale and purchase of a horse was held unenforceable because the defendants promise to pay an additional £5 ‘if the horse is luck’ was too vague as there was no way for the court to decide what ‘lucky’ meant.

However the courts do not wish to bee seen as destroyers of bargains and have use the following techniques to ‘save’ an agreement;

Allowing reliance on contractual provisions to resolve uncertainties, Foley v Classique Coaches, where although the parties themselves had not agreed the terms, they nevertheless agreed on a form of proceeding whereby the terms could be determined, as by conferring on a court of law or an arbitrator the power to fill in a term or gap in their agreement.  

Previous course of dealings as in Hillas v Arcos the courts were able to determine the meaning of the option clause by reference to the previous course of dealings of the parties in the contract of which the optional clause was part and parcel.

Imply terms-the officious bystander test. In Foley v Classique Coaches the courts implied a term that the petrol supplied should be of reasonable quality and sold at a reasonable price.

In situations when performance has commenced but the contract is uncertain with vague terms the courts will be more likely to enforce the contract and will enforce an agreement to agree a price in a long term contract where one was initially agreed  Mamidoil Jetoil Greek Petroleum v Okta Crude Oil Refinery, the contract provided that it ‘shall be valid for 10 years’ but specified the price only for the first two years, and did not set out any mechanism for determining the price for the remaining period. The court held that the contract was nevertheless valid for the full ten-year period and that a term should be implied into the contract that the price should be ‘a reasonable one’, to be determined in arbitrartion.

Even where there has been performance the courts may be reluctant to find a contract as in Baird

Textile Holding v Marks and Spencer. Baird had supplied clothes to Marks & Spencer for thirty years. All of a sudden, M&S said they were cancelling their order. Baird sued M&S on the grounds that they should have been given reasonable notice. The problem was, there was no  under which such a term could be said to have arisen. Baird argued that a contract should be implied through their course of dealings. The judge found there was no contract all there was was a long term business relationship but this cannot be extended any further into a contractual relationship. It was also alleged that the representation was considered to be no more then a bare assurance and insufficiently certain. An agreement confirmed by a handshake will not necessarily mean that a binding contract has been concluded particularly if there was insufficient certainty of terms to found that contract as, amongst other things, the duration of the period of occupation had not been fixed was so  in McNicholas Construction v. Endemol 

In British Steel v Cleveland Bridge and Engineeringthe Court concluded that there was no binding contract between the parties. There was simply a legal obligation upon Cleveland to pay to British Steel on quantum meruit basis for the work they had carried out. The case indicates that the courts still retain substantial discretion to find for no contract despite the performance of the contract where the terms are uncertain.

The question as to whether a contract is enforceable or unenforceable largely revolves around the level of vagueness, ambiguity or incompleteness in the contract for it is this which combines with the uncertainty of the willingness of the judge to save or sacrifice the contract creates substantial uncertainty for the parties. With this level of overall uncertainty it is impossible to draw up precise rules since each case resolves very much on its own facts.  

Looking at the cases on certainty it would be reasonable to conclude in line with the statement that the “legal principles regarding certainty are extremely vague.” In general it appears that where the contract is uncertain but has yet to be performed generally the vague terms will render the contract unenforceable and where the contract is uncertain but performance has commenced vague terms are more likely to be enforced by the courts. Although the law relating the latter is inconsistent because in the Mamidoil case the contract was enforced however in Baird where performance was ongoing for 30 years a contract was not declared. 

Bibliography

McKendrick, E. (2004). Contract Law - Text, Cases and Materials. Oxford: University Press        

Richard, P. (2007). Law of Contract. Pearson Longman

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