Agreement in English law

In English contract law, an agreement establishes the first stage in the existence of a
contract. The three main elements of contractual formation are whether there is (1) offer and
acceptance (agreement) (2) consideration (3) an intention to be legally bound.

One of the most famous cases on forming a contract is Carlill v Carbolic Smoke Ball
Company,[1] decided in nineteenth-century England. A medical firm advertised that its new
wonder drug, a smoke ball, would cure people's flu, and if it did not, buyers would receive
£100. When sued, Carbolic argued the ad was not to be taken as a serious, legally binding
offer. It was merely an invitation to treat, and a gimmick. But the court of appeal held that it
would appear to a reasonable man that Carbolic had made a serious offer. People had given
good "consideration" for it by going to the "distinct inconvenience" of using a faulty product.
"Read the advertisement how you will, and twist it about as you will," said Lindley LJ, "here
is a distinct promise expressed in language which is perfectly unmistakable".

Contents The Carbolic Smoke Ball offer

Offer
Invitations to treat
Offers generally
Auctions
Termination of offer
Revocation
Rejection
Lapse of time
Death
Counter offers
Acceptance
Acceptance by conduct
Prescribed method of acceptance
Knowledge and reliance on offer
Cross offers
Battle of the forms
Acceptance in case of tenders
Communication of acceptance
Necessity for communication
Waiver
Silence a condition of acceptance
Post or telegram
Telex
Revocation of Acceptance
Certainty and completeness
See also
Notes
External links

Offer
The most important feature of a contract is that one party makes an offer for a bargain that another accepts. This can be called a
'concurrence of wills' or a 'meeting of the minds' of two or more parties. There must be evidence that the parties had each from
an objective perspective engaged in conduct manifesting their assent, and a contract will be formed when the parties have met
such a requirement.[2] An objective perspective means that it is only necessary that somebody gives the impression of offering or
accepting contractual terms in the eyes of a reasonable person, not that they actually did want to contract.[3]

Invitations to treat
Where a product in large quantities is advertised for in a newspaper or on a poster, it is generally regarded as an offer, however if
the person who is to buy the advertised product is of importance, i.e. his personality etc., when buying e.g. land, it is merely an
invitation to treat. In Carbolic Smoke Ball, the major difference was that a reward was included in the advertisement which is a
general exception to the rule and is then treated as an offer. Whether something is classified as an offer or an invitation to treat
depends on the type of agreement being made and the nature of the sale. In retail situations an item being present is normally
considered an invitation to treat; this was established for items on display in shop windows in Fisher v Bell [1961] 1 QB 394 and
for items on shelves in Pharmaceutical Society of Great Britain v Boots Cash Chemists (Southern) Ltd [1953] 1 QB 401.

Retail agreements can also be considered invitations to treat if there is simply not enough information in the initial statement for
it to constitute an offer.[4] In Partridge v Crittenden [1968] 1 WLR 1204 the defendant had placed an advertisement indicating
that he had certain birds for sale, giving a price but no information about quantities. He was arrested under the Protection of
Birds Act 1954 for 'offering such birds for sale'; it was ruled that since the advertisement did not specify the number of birds he
had it could not constitute an offer; if it did he could have been legally bound to provide more birds than he possessed.[4] The
same principle was applied for catalogues in Grainger v Gough [1896] AC 325, when it was ruled that posting catalogues of items
for sale to people did not constitute an offer since there was insufficient detail.[4]

Chapelton v Barry UDC

Spencer v Harding (1870) LR 5 CP 561
Harvey v Facey [1893] AC 552

Offers generally
Carlill v Carbolic Smoke Ball Co. [1893] 1 QB 256

Auctions
Warlow v Harrison (1859) 1 E & E 309; 120 ER 925
Harris v Nickerson
Payne v Cave
Barry v Davies (t/a Heathcote Ball & Co) [2001] 1 All ER 944
Sale of Goods Act 1979, s 57(2)

Termination of offer

Revocation
Routledge v Grant (1828) 4 Bing 653; 130 ER 920
Byrne v Van Tienhoven (1880) 5 CPD 344
Dickinson v Dodds [1876] 2 Ch D 463
Errington v Errington [1952] 1 KB 290

Rejection
An offer can be rejected by the offeree(s). The conduct of an offeree(s) has led to the non-existence of the offer. See

Hyde v Wrench (1840) 3 Bea 334

Lapse of time
When an offer is stated to be open for a specific length of time, the offer automatically terminates when it exceeds the time limit.
See:

Ramsgate Victoria Hotel v Montefiore (1866) LR 1 11 Ex 109

Manchester Diocesan Council for Education v Commercial Investments Ltd

Death
In Bradbury et al. v Morgan et al. (1862),[5] the court ruled that a death does not in general operate to revoke a contract,
although in exceptional cases it will do so.[6]

Counter offers
Hyde v Wrench (1840) 3 Bea 334
 Stevenson, Jacques & Co v McLean (1880) 5 QBD 346

Acceptance

Acceptance by conduct
Brogden v Metropolitan Railway Co (1877) 2 App Cas 666

Prescribed method of acceptance

Manchester Diocesan Council for Education v Commercial Investments Ltd [1969] 3 All ER 1593

Knowledge and reliance on offer

Williams v Carwardine (1833) 5 C & P 566; 172 ER 1101
Gibbons v Proctor
R v Clarke (1927) 40 CLR 227

Cross offers
A writes to B offering to sell certain property at a stated price. B writes to A offering to buy the same property at the same price.
The letters cross in the post. Is there (a) an offer and acceptance, (b) a contract?

In this case, It is assumed that "where offers cross there was no binding contract". Because B's acceptance was not communicated
to A. Therefore, there was no contract what so ever.

Tinn v Hoffman (1873) 29 LT 271

Battle of the forms

Butler Machine Tool Co Ltd v Ex-cello Cpn (England) Ltd [1979] 1 WLR 401

Acceptance in case of tenders

Harvela Investments Ltd v Royal Trust Co of Canada [1986] AC 207
Blackpool & Fylde Aero Club v Blackpool Borough Council [1990] 1 WLR 1195

Communication of acceptance

Necessity for communication

Waiver
Carlill v Carbolic Smoke Ball Co

Silence a condition of acceptance

Felthouse v Bindley (1862) 11 CBNS 869
Consumer Protection (Distance Selling) Regulations 2000 (SI 2000/2334) Reg 24

Post or telegram
Adams v Lindsell [1818] EWHC KB J59
Henthorn v Fraser [1892] 2 Ch 27
Holwell Securities Ltd v. Hughes [1974] 1 WLR 155

Telex
Entores Ltd v Miles Far East Corporation [1955] 2 QB 327
Brinkibon Ltd v. Stahag Stahl mbH [1983] 2 AC 34
The Brimnes [1975] QB 929
Revocation of Acceptance
Revocation can be made by the offeror only before acceptance is made. Also the revocation must be communicated to the
offeree(s).Unless and until the revocation is communicated, it is ineffective. See:

Byrne v Van Tienhoven (1880) 5 CPD 344.

Hudson ‘Retraction of Letters of Acceptance’ (1966) 82 Law Quarterly Review 169

Certainty and completeness

If the terms of the contract are uncertain or incomplete, the parties cannot have reached an agreement in the eyes of the law.[7]
An agreement to agree does not constitute a contract, and an inability to agree on key issues, which may include such things as
price or safety, may cause the entire contract to fail. However, a court will attempt to give effect to commercial contracts where
possible, by construing a reasonable construction of the contract (Hillas and Co Ltd v Arcos Ltd[8]).

Courts may also look to external standards, which are either mentioned explicitly in the contract[9] or implied by common
practice in a certain field.[10] In addition, the court may also imply a term; if price is excluded, the court may imply a reasonable
price, with the exception of land, and second-hand goods, which are unique.

If there are uncertain or incomplete clauses in the contract, and all options in resolving its true meaning have failed, it may be
possible to sever and void just those affected clauses if the contract includes a severability clause. The test of whether a clause is
severable is an objective test—whether a reasonable person would see the contract standing even without the clauses.

Sale of Goods Act 1979 ss 8(2) 9

See also
English tort law
Consideration in English law
Powell v Lee (1908) 99 LT 284

Notes
1. Carlill v Carbolic Smoke Ball Company [1893] 2 QB 256
2. e.g. Lord Steyn, Contract Law: Fulfilling the Reasonable Expectations of Honest Men (1997) 113 LQR 433; c.f. § 133 BGB in
Germany, where "the actual will of the contracting party, not the literal sense of words, is to be determined"
3. Smith v Hughes
4. Poole (2004) p.40
5. 1 H & C 249; 158 ER 877
6. All Answers Ltd., Bradbury v Morgan (1862) 158 ER 877 (https://www.lawteacher.net/cases/bradbury-v-morgan.php),
accessed 23 April 2018
7. Fry v Barnes (1953) 2 DLR 817 (BCSC)
8. (1932) 147 LT 503
9. Whitlock v Brew (1968) 118 CLR 445
10. Three Rivers Trading Co Ltd v Gwinear & District Farmers Ltd (1967) 111 Sol J 831

External links
Retrieved from "https://en.wikipedia.org/w/index.php?title=Agreement_in_English_law&oldid=922315034"

This page was last edited on 21 October 2019, at 10:35 (UTC).

Text is available under the Creative Commons Attribution-ShareAlike License; additional terms may apply. By using this site, you agree to the Terms of
Use and Privacy Policy. Wikipedia® is a registered trademark of the Wikimedia Foundation, Inc., a non-profit organization.