Tutorial 6:

1) Self- quiz
Phrase True False
1 An agreement cannot occur unless there is an offer and acceptance
of that offer
2 An invitation to treat is an invitation to buy a bargain
3 Goods on display in a supermarket are being offered for sale
4 An acceptance is not valid unless the offeree knows about the offer
and has it in mind
5 An offer is rejected if the offeree tries to vary the conditions of the
offer
6 When instantaneous communication is used, a contract is made as
soon as the offer is sent
7 When parties communicate by fax, acceptance cannot occur until the
offeror has read the acceptance
8 An offeree who intends to accept an offer can accept through silence
9 A revocation is not valid unless it is received by the offeree
10 Under the postal rule an offer is accepted when an acceptance is
posted
11 A revocation by post is valid as soon as the letter is posted
12 An offer will lapse if it is not accepted within a specified or
reasonable period of time
13 An offer will lapse if the conditions of the offer are not satisfied
2) Typical cases in law reports of contract- Find out rules from the following cases
Byrne& Co v Van Tienhoven& Co (1880) 5 All ER 344
1st October Cardiff firm offered by letter to sell 1000 boxes of tinplates to New York firm
8th October Cardiff firm posted letter revoking their offer
10th October New York firm received the letter of offer
11th October New York firm telegraphed acceptance of the offer
15th October New York firm posted a letter confirming its telegraphed acceptance
20th October New York firm received letter of revocation from Cardiff firm
Did the acceptance occur?
Entores Ltd v Miles Far East Corp (1959) 2 QB 327
A London firm used a telex machine (an early version of a fax machine) to communicate its
offer to buy goods from a company in Amsterdam. The Amsterdam company accepted by
telex. Subsequently, when the parties fell into dispute, they disagreed as to where and when the
contract had been made and which law should apply. Your answers
Hyde v Wrench (1840) 3 Beav 334
1 June Wrench offered to sell estate to Hyde for £1200
2 June Hyde rejected the offer
6 June Wrench offered to sell for £1000
8 June Hyde replied, offering £ 950
27 June Wrench rejected
28th June Hyde attempted to accept the £1000 offer . Was Wrench bound to sell at £1000

Graded question
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1) On Friday 27th Nov. Buyer sends a telex to Seller offering to buy 1,000 tonnes of sugar
at the current market price. The telex is received in Seller’s offices after a short delay at 5 pm.
Since the telex operator has gone home for the weekend, Seller posts a letter in the last post on
Friday, accepting the offer. This reaches Buyer at 2.30 pm on Monday 30 th Nov. Meanwhile, at
9.30 am on 30th Nov. Buyer sends a further telex to Seller withdrawing his offer. This reaches
Seller and is read by him immediately at 9.45 am on 30 th Nov. Seller now seeks your advice.
Advise Seller. (Exam question by Institute of Chartered Secretaries and Administrators- UK)
2) Smart, a young sales representative employed by Speedy Ltd, a company
manufacturing computers, visits Wiley, a partner in Wiley and Fox, solicitors, with a view to
selling a new computer to the firm. In the course of conversation, Smart, being desperate to
make his first sale for several days, offers the machine at £300 less than the normal selling
price. Wiley says that he will consult Miss Dragon, the head of the computer department, and
let Smart have an answer by letter in a few days.
On returning to the area sales office Smart realizes that although he has authority to give
special prices he might have been unduly generous in his offer to Wiley. Accordingly he
consults Allick, the area sales manager, who is not prepared to sell the computer at the price at
which Smart has offered it. Smart rings Wiley immediately but is unable to speak to him or
any of the other partners in the firm – even Miss Dragon is not available. Smart therefore
writes a letter to Wiley revoking the offer and posts it immediately by first-class mail.
When Wiley arrives at his office on the following day he notices that among the incoming mail
is a franked envelope bearing the slogan ‘Speedy Ltd for your Computers’. It occurs to him
that the envelope might contain a retraction of the offer made by Smart and decides not to
open it immediately. Instead he dictates a letter to his secretary accepting the offer and tells her
to post it before lunch. After lunch Wiley, having ascertained that his secretary has posted his
letter, opens the letter from Smart and discovers that it is indeed a revocation of the offer made
the previous day. Nevertheless Wiley ring Allick, the area sales manager of Speedy Ltd, and
asks for delivery of the computer. Allick replies: ‘We cannot possibly sell at this price. Surely
you received our letter this morning?’ ‘Yes,’ say Wiley, ‘it came first delivery but I had already
posted my acceptance before I had a chance to open all my mail.’ Wiley intends to sue Speedy
for breach of contract. Will he succeed?
Which one of the following decisions is the court likely to make?

A. That Wiley accepted Smart’s offer when his secretary posted the letter of acceptance
and Speedy is bound to sell the machine at Smart’s price.
B. That Smart’s letter of revocation took effect after Wiley had had a reasonable time in
which to read it after delivery. Since such an opportunity occurred before Wiley
accepted, Speedy is not bound.
C. That Smart’s offer was withdrawn when the letter of revocation was delivered so that
Wiley’s acceptance was not effective and Speedy is not bound.
D. That Smart’s offer was withdrawn when the letter of revocation was posted so that
Wiley’s acceptance is ineffective and Speedy is not bound.
(Exam question by Institute of Law Executives- UK)

3) On 1 November Adder, an accountant, receives through the post at his office a large volume
entitled Tax Made Easy. Accompanying the volume is a note from the publishers, Messrs
Galley & Co, stating that the volume will greatly assist Adder in his work and that if he does
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not reply within seven days Messrs Galley & Co will assume that he wishes to purchase the
volume and they will expect to receive a remittance of £12.
Adder does not wish to purchase the book but forgets to reply to Galley & Co. At the end of
the month he receives an invoice for £12 from the publishers.
Is Adder obliged to pay for the book?
Which one of the following statements is correct?
A. Adder must pay for the book since he did not tell Galley & Co within seven days that he
did not want it.
B. Adder cannot be made to pay for the book but must return it to Galley & Co.
C. Adder must pay for the book because it is a business not a private transaction.
D. Adder cannot be made to pay for the book and need only make it available for Galley &
Co to repossess.
(Exam question by Association of Chartered Certifies Accountants- UK)