contract law

OCCURRENCE OF CONDITION

An offer which expressly provides that it is to terminate on the occurrence of some condition cannot be accepted after that condition has occurred; and such a provision may also be implied.  For example, if an offer to buy goods is made after the offeror has examined them, it may be an implied term of the offer that they should at the time of acceptance be in substantially the same state as what they were when the offer was made.  Such an offer cannot be accepted after the goods have been seriously damaged.  

DEATH

Finally, an offer cannot be accepted after the death of either party, since the fact of death makes it impossible for them to reach agreement.  However it is possible for an offer to continue even after the death of the offeror, where the offeree accepts the offer without knowing of the offeror’s death.  In Dickinson v Dodds Mellish LJ, in an obiter dictum, expressed the opinion ‘that, if a man who makes an offer dies, the offer cannot be accepted after he is dead.’ The case of Bradbury v Morgan, however, it suggests that, in principle at least, this opinion does not represent the law.

However, if the offeree dies after an offer has been made; it seems sensible that the offer comes to an end.  In Reynolds v Atherton Warrington L.J. stated obiter that an offer “made to a living person who ceases to be a living person before the offer is accepted…is no longer an offer at all”.  

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Alf advertises that he requires a second-hand car for £2000.  He receives two letters in reply one from Bert and one from Colin.  After considering both letters, Alf writes to Bert accepting his offer.  He ignores the letter from Colin.  The day after he posted the letter to Bert, Alf receives a further letter from Bert withdrawing his (Bert’s) offer.  On the same day Alf receives a further letter from Colin stating that he has not heard from Alf, he assumes that his (Colin’s) offer has been accepted.  Advise the parties.

INTRODUCTION

Alf’s advert constitutes an invitation to treat.  In law, the main significance of an invitation to treat is that it is not an offer it is merely an invitation to make a deal. 

Bert and Colin both responded to the advert.  Their letters to Alf amount to an offer and became effective once Alf received the letters.  The acceptance of either of the offers would result in a legally enforceable contract to be formed.  Once Alf accepts either one of the offers, he will have entered into a contract.  

ACCEPTANCE

An acceptance is a final and unqualified acceptance of the terms of an offer.  Acceptance can be made either orally, in writing, or by conduct

The general rule is that an acceptance must be communicated to the offeror. Until and unless the acceptance is so communicated, no contract comes into existence.

The acceptance must be communicated by the offeree or someone authorised by the offeree. If someone accepts on behalf of the offeree, without authorisation, this will not be a valid acceptance.

The offeror cannot impose a contract on the offeree against his wishes by deeming that his silence should amount to an acceptance.  In Felthouse v Bindley it was held there was no contract because acceptance had not been communicated.  However, it has been suggested that this does not mean that silence can never amount to acceptance.  For example in Felthouse v Bindley  the offeror had relied on the offeror’s statement that he need not communicate his acceptance, the court could interpret that the need for acceptance had been waived by the offeror.

In the Hannah Blumenthal the House of Lords held that a contract to abandon a reference to arbitration could be concluded by the prolonged silence of both parties, but this is a rare example of silence amounting to acceptance.  

This would relate to Colin as he had written to Alf making an offer, but there had been no acceptance because Alf had not replied to his offer.  Even though it’s been said, it will assume that the offer has been accepted if there is no response.  If Alf does not respond it is most likely there would be no acceptance.  However, as a result of Hannah Blumenthal’s case and for the sake of certainty and finality Alf should write back and let Colin know whether his offer has been rejected or accepted.  

 

The acceptance has to be communicated to the offeror before it can result in a contract being formed.  Alf had decided to accept Bert’s offer, he wrote to him and sent the acceptance letter by post.  At this point a contract was formed between Alf and Bert, because Alf had sent the letter by post the postal rule took effect and therefore a contract was formed upon the posting of the acceptance letter.   

Postal rule is where acceptance by post has been requested or where it is an appropriate and reasonable means of communication between the parties, then acceptance is complete immediately the letter of acceptance is posted.

The contract comes in to existence at the moment that the acceptance was posted and not received.  (Adams v Lindsell) this rule only applies when, impliedly or explicitly, the parties have in contemplation post as a means of acceptance.  It excludes contracts involving land, letters incorrectly addressed and instantaneous modes of communication.  

Revocation of posted acceptance.

Can an offeree withdraw his acceptance, after it has been posted, by a later communication, which reaches the offeror before the acceptance? There is no clear authority in English law. The Scottish case of Dunmore v Alexander (1830) appears to permit such a revocation but it is an unclear decision. A strict application of the postal rule would not permit such withdrawal. This view is supported by decisions in New Zealand in Wenkheim v Arndt (1873) and South Africa in A-Z Bazaars v Ministry of Agriculture (1974). However, such an approach is regarded as inflexible.

This would therefore mean that despite sending a withdrawal letter, because Alf’s letter was posted before receipt of the withdrawal letter a contract had been formed.  Non-compliance with the contract by either Bert or Alf will therefore result in a breach.  

CONCLUSION

In conclusion, Alf has to write back to Colin if he wants to either accept or withdrawal Colin’s offer.  A contract has not been formed between Colin and Alf.  Colin should not assume that his offer has been accepted.  However, between Bert and Alf a contract had been formed because the postal rule came in to place but Bert had withdrawn his offer.

Word count: 1578

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BIBLIOGRAPHY

        

Essential Contract Law Marnah Suff

Law of Contract 5th Edition Laurence Koffman & Eliza Macdonald

An Outline of the Law of Contract 6th Edition G.H. Treitel

Law of Contract 11th Edition G.H. Treitel

 (03/12/2006)

Law of Contract 13th Edition, Cheshire, Fifoot & Furmston’s

www.Lexisnexis.com - Halsbury's Laws of England (21/11/2006, 02/01/2007)

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