An offer can be made to any. If the offer is made to a specific person then, only that person can accept the offer. If the offer is made to a group of people then anyone from that group can accept the offer.
An acceptance may be defined as “A positive act by a person to whom an offer has been made which, if unconditional, brings a binding contract into effect (Fisher, 2004, P.67).
The initial point to consider is whether Chris’s advertisement is an offer or an invitation to treat. How to categorise it is dependent partly upon the precise wording of the letter, which although described as an “offer”, may realistically not constitute an offer at all. This is emphasised by Halson's example, which refers to a company offering its shares for sale to the public; "such offers are in fact treated as invitations to members of the public to themselves offer to buy the shares" (Halson, 2001, p122).
In this case, Chris places an advertisement in the magazine. It is necessary for him to announce his intention to sell his car to the public in return for respondents. Advertisement is an invitation for people to make offers to purchase, and is not an offer for sale. Applying the case of Pattridge Vs Crittenden, Chris had merely advertised in the magazine to sell his car and that advertisement only amounts to an invitation to treat. An invitation to treat is where the one (offeree) is inviting the other (offeror) to make an offer for him/her to accept. There are four types of invitation to treat, which is auction sales, advertisement, exhibition of goods for sale and an invitation for offeror.
Therefore, when Paul made an offer which is £10,000 on Monday is an offer in response to Chris advertisement. However, there is not any contract formed, as there is not any acceptance in Chris’s part. In the invitation for offeror has not specified whether he will accept the lowest or the highest tender. Chris is under no liability to accept Paul’s offer. Furthermore, Chris has promised to keep offer open until Friday. He has no obligation to do so (Routledge v Grant). Offer maybe revotes at any time before acceptance.
Revocation applies to the withdrawal of an offer. The general rule is that an offer can be revoked at any point before it is accepted. As illustrated in the case Payne v Cave.
In addition, Chris made a clear require that he requested a written acceptance from Paul. The method of communicating acceptance could be mental acceptance. This happens when the offeror prescribes a particular method of acceptance, it follows that, and the method prescribed should normally be followed. Thus if require written acceptance, than the offeror must comply with the terms of the offer.
Where acceptance consists in the performance of an act, as in Calill v Smoke Ball Co.Ltd, this may be sufficient acceptance since the offer does not contemplate that the offeree should notify the offeror orally by letter. The finder of a lost cat or any article, provided that it is returned, will be able to claim any reward offered, assuming in this case the finder knew of the reward beforehand. There are rules of acceptance such as: it must be unqualified in the sense that it must be absolute and must conform exactly to the terms of offer. Thus if the offeree is required to perform or the sum mentioned paid exactly; Case example: Neale v Merret. Acceptance is always subject to contract.
On the other hand, Paul phoned reply can not be considered to be acceptance for Chris’s offer. The advertisement indicated the bronze figure by Spelter for sale £12,000 ono. Ono offer means that, the price could be the same amount as shown in the advertisement or nearest offer. Therefore, his reply will most likely be regarded as a counter offer (Hyde v Wrench). Also relevant to the scenario are the rules concerning counter offers. A counter offer can be defined as, in order to create a binding agreement the offer and acceptance must match. The offeree must accept all the terms of the offer. If in their replay to an offer, the offeree introduces a new term or terms, or varies the terms of an offer, then that replay can not amount to an acceptance. Instead the replay is treated as an offer itself, a counter offer which the offeror is free to accept or reject. This was illustrated in the case of Tinn v Hoffman.
This then results in the original offer of Chris being destroyed. However, Chris rejected Paul new offer £10,000. Paul left a message of acceptance on Chris’s answer machine on Wednesday. The general law identified that acceptance must be communicated to the offeror, and it is only valid until this action has been done. In addition, The law on instantaneous form of communication as held in Entores v Miles Far East Corporation states that of an offer through an instantaneous form of communication such as telephone, fax, email etc, must have been received and bought to the knowledge of the offeror. Only then will an acceptance be valid. Therefore, Paul’s acceptance is only effective when heard by Chris and due to the phone malfunctioned, he never can be heard it. What is more, it is submitted there is no rule for existing the postal rule for telephone answering machines.
If a specific form of acceptance is required it must be in that form. One form of acceptance can take place before the offeror receives notification of it. This is known as the “Postal Rule”
Where use of post is the normal, anticipated method of acceptance is valid and the contract is formed when the letter is posted, not when it is received by the offeror. As illustrated in the case of Adams v Lindsall.
The rule can also be where the letter of acceptance is never received as shown in the case of Household Insurance Co v Grant.
On Wednesday, Roger phoned Chris and made an appointment to see the car, and at 10.00am on Thursday morning, he offered £11,000, Chris accepted it. It is well under his rights to accept a higher offer received from Roger. A contract has been formed as there as been an acceptance of Rogers' offeror. Once an offer is accepted, then there will be an agreement given that there are intention to create legal relations and consideration.
Therefore, when Chris sold his bronze to Roger and when Paul heard the new that Roger bought it. Paul has not accepted Chris’s offer. Equally, Chris has not revoted since revocation must be communicated (Byrne v Van Tieuhoven). Posting a letter is not a sufficient act of revocation (Fisher, 2004, P.65).
The revocation of the contract can be given to the offeree by any means including from a third party. In Dickenson v Dodds this was such the case, as a third party (an agent) had told the offeror that the offer of buying the offeree’s house was no longer open.
However, it is unlikely in this case that it would be held by the count as the information cause by an elderly person, an 8-year old boy, although may be it is possible. Communication from third party must come from a reliable source and it is up to the offeree to decide whether the source is trustworthy or not.
Therefore, Chris’s offer is still acceptance when Paul held the letter. Have to consider the general law, revocation must be the accepted, means of communication by both parties and the postal rule will apply in that a notice of revocation is only valid when it is received and not when it is posted” (Richards, P., 2002, P. 35,37). So with regards to the postal rule and acceptance, a contract will from Paul holds his letter (Adams v Lindsell). Equally, that Chris’s revocation is affected only when received by Paul (Byrne v Van Tienhoven). The postal rule may be quoted outer by country’s stimulation how security is used.
Chris’s statement may be have replied by Friday suggest that would be effective acceptance must receiver by him. On this interpretation, as Paul’s letter as acceptance arrived after Chris’s revocation. It is most unlikely a contract is concluded between Paul and Chris. Therefore, it is unlikely Paul would succeed in the action.
In conclusion, because of the advertisement of Chris is an invitation to treat, and it may be revote at anytime before acceptance. Due to the Paul’s communication channel failed (answer phone), his acceptance can not be heard by offeror. Therefore it is legal for Chris to accept a higher offer from Roger. Furthermore, revocation of contract transmitted by third person and postal rule are impossible to apply in the case, so based on the general law, revocation only valid when receive it. Paul’s acceptance letter received after the revocation, thus there is no contract made between Chris and Paul.
References
Fisher, C and Lovell, A. (2004) eds (2001) Business ethics and Values, London: Pearson Education.
Brown I and Chandler, Law of Contract Cracknell D.G, Obligations: Contract Law 3rd Edition Old Bailey Press
Halson R, (2001), Contact Law 2nd Edition, London: Longman.
Cases:
Cracknell, Obligations: Contract Law Page 8
Cracknell, Obligations: Contract Law Page 9.
Partridge v Crittenden (1968)
Carhill V Cabolic Smoke Ball Company Ltd (1893)
Adams v Lindsall (1818)
Household Fire & Carriage Accident Insurance Co v Grant (1879)
Cracknell, Obligations: Contract Law Page 24.
Tinn v Hoffman & Co (1873)
Hyde v Wrench (1840)
Payne v Cave (1784)
Byrne v Van Tienhoven (1880)
Neale v Merret (1930)
Routledge v Grant (1828)
