Carhill v Carbolic Smoke Ball Company (1893) -

Terminology How the law Effect

Held:
treats them
It was an offer that was made to the world at
Void (Void ab Null, never Due to some large.
initio) existed serious flaw
“Contract is made with that limited portion of the
Voidable Valid when Affected party public who come forward and perform condition
made initially. can choose to on faith of advertisement.”
affirm/avoid
Affected party contract 2. CERTAINTY & COMPLETENESS OF TERMS
has the right to x Incomplete / Conditional / Vague terms = no
not go through enforceable contract
it.
Eg: “Subject to contract”, “T&C will be agreed
Unenforceable Valid and Court will not upon later”
legally binding. enforce it for
some reason INTENTION TO BE BOUND UPON ACCEPTANCE

1. Offers distinguished from statement of info

OFFER:
Issue: Is there a valid offer? Issue: Was it an offer or a statement of
information?
Gay Choon Ing v Loh Sze Ti Terence Peter (2009):
“An offer must consist of definite promise to be Harvey V Facey (1893) – Held:
bound, provided that certain specified terms are Harvey was requesting for information.
accepted
Facey’s response was a statement providing
information.
1. Must be validly communicated to the offeree
Does not constitute to accepting the offer.
2. Certainty and completeness of terms
2. Offers distinguished by mere puff
UNILATERAL VS. BILATERAL
Contract The Requirements: Issue: Was the statement an offer or a mere puff?
type: promise:
Carhill v Carbolic Smoke Ball Co (1893) – Held:
Unilateral An act for a Promise return for Deposit of 1,000 was an indication of a serious
promise the act may choose offer.
not to act (not
obliged) Carbolic expressed willingness to be bound upon
acceptance.
Bilateral A promise Requires two parties
for a to form a contract 3. Offers distinguished from invitations to treat
promise Willingness to enter negotiations with other party
without intentions to be bound.
1. COMMUNICATED TO THE OFFEREE
DEFINITION OF INVITATION TO TREAT (ITT):
x Not communicated/accept offer without
1. No intention by ‘offeror’ to be bound
knowledge
2. An attempt to induce/invite offers, NOT an
offer itself
Issue: Was there a valid unilateral offer to the
3. Person made ITT can accept/reject the offer
world?
1. Display of Goods For Sale
Issue: Is item considered an offer of sale or
invitation to treat? – Invitation to treat
Fisher v Bell (1960) – Held:
Display of item was an invitation to treat, not an
offer.
Pharmaceutical Society of Great Britain – Held:
Customer makes an offer to buy at the cash desk
& sale is completed when cashier accepted the
offer.
Display of item of goods was an invitation to
treat.
2. Advertisements
Invitation to treat unless there’s an intent to be
bound
Issue: Whether advertisement was construed as an
offer of sale or invitation to treat?
Patridge v Crittenden (1968) – Held:
Display of item was an invitation to treat, not an
offer.
Chwee Kin Keong v Digilandmall.com Pte Ltd
(2004) – Held:
Original advertisement = an invitation to treat
CKK orders = offer to Digilandmall.com
Digilandmall.com’s auto response = acceptance.
There was a contract.
3. Auction Sales:
An invitation of treat
57(2), Sales of Goods Act
“A sale of auction is complete when auctioneer
announces its completion by fall of hammer, or in
customary manner; until announcement is made,
any bidder may retract his bid.”
4. Tenders
An invitation of treat
Issue: Whether it was bound to accept the highest
offer?
EXCEPTION
Havela Investments Ltd v Royal Trust of Canada
(1986) – Held:
Invitation was for a “fixed bidding sale”
RTC obliged to accept highest valid bid as
referential bid was not allowed.
Invitation to tender was a contractual offer.
TERMINATION OF OFFER:
Automatic Termination
1. Failure of a condition
Offer may be subject to conditions which may be
stated expressly by offeror/implied by courts
from circumstances of the case.
*If conditions are not satisfied = offer capable of
not being accepted.
Whether plaintiff had accepted the defendant’s
offer & is there a valid contract?
Financings Ltd v Stinson (1962) – Held:
Offer contained an implied condition that the car
remains substantially in same state until
acceptance.
No existing contract as car was not in the same
state.
2. Lapse of Time
Issue: Whether offer is capable of acceptance
despite not withdrawn formally?
When a time limit is not specified, it will lapse
after a period of time:
Ramsgate Victoria Hotel v Montefiore (1886) -
Held:
Offer was not accepted within reasonable time (5
months) – no longer valid.
When a time limit is specified, offer will lapse if
not accepted within that period of time:
Dickinson v Dodds (1876) - Held:
Offer expressly stated to last for a fixed time
cannot be accepted after that time.
3. Death
When offeror dies, the offer is terminated if the
offeree knows. It will not be terminated if the
offeree has no notice of it.
Termination by the offeror
1. Revocation/Withdrawal
Offeror can revoke offer before offeree accepts.
1. Must be communicated to the offeree before
offer is accepted
2. Regardless how it is communicated as long as
offeree is notified.
Issue: Whether withdrawal of offer is valid?
Bryne v Van Tienhoven (1880) - Held:
Ineffective withdrawal as contract had concluded
between 2 parties earlier when plaintiff
communicated acceptance.
Withdrawal not valid.
2. Communicated by third party to the offeree
Issue: Whether acceptance of offer is valid?
Dickinson v Dodds (1876) - Held:
Withdrawal was communicated to the plaintiff
through a reliable third party.
Withdrawal by defendant is valid.
3. Replaced by subsequent offer
Revocation of initial offer, second offer must state
it supersedes initial offer.
TERMINATION BY THE OFFEREE
1. Counter-offer
Offer is terminated.
Issue: Whether offer is valid after counter-offer?
Hyde v Wrench (1840) - Held:
When a counter-offer is made, it
rejects/supersedes & destroys the original offer.
Offer from defendant no longer valid following
counter-offer.
Issue: Whether is it an inquiry or a counter-offer?
Stevenson v McLean (1880) - Held:
Stevenson query was merely a request for more
information and not a rejection by way of
counter-offer.
3. Rejection
ACCEPTANCE:
Gay Choon Ing v loh Sze Ti Terence Peter (2009):
“An acceptance is a final and unqualified
expression of assent to the terms of an offer.”
Brings a contract into existence whilst making both
parties legally bound.
Neither party can get out of contract or vary its
contents unilaterally.
ACCEPTANCE MUST RESPOND TO THE OFFER
1. Cannot be made in ignorance of offer
An offer cannot be accepted without knowledge.
Issue: Whether acceptance of offer is valid despite
no knowledge of offer?
R v Clarke (1927) - Held:
Could not claim the reward as he was ignorant of
offer when accepted.
2. Cross-offers
When 2 parties send offers to each other in
identical terms at the same time, it will result in no
contract.
Issue: Whether cross-offer constituted a valid
contract?
Tinn v Hoffmann & Co (1873) - Held:
Cross offers were made simultaneously without
knowledge of one another, resulting in no
acceptance responded.
No contract.
ACCEPTANCE MUST BE COMMUNICATED TO THE
OFFEROR
Before binding contract exists, acceptance must be
communicated to the offeror.
It is validly communicated when it is brought to
the notice of the offeror.
Mental assent is insufficient
Must be received by offeror: Postal Acceptance
Rule
1. Silence
Cannot be mode of acceptance UNLESS
Offeree tells offeror in advance that silence = valid
acceptance.
x Offeror tells offeree that silence = acceptance
Issue: Whether silence is accepted as an offer?
Felthouse v Bindley (1862) - Held:
Silence is not a mode of acceptance.
No contract was formed.
2. Conduct
Issue: Whether counter-offer was accepted
through conduct?
Brogden v Metropolitan Railway (1877) - Held:
Amended draft contract = counter-offer
Carried out duties = acceptance
Valid contract.
3. Accepted by specified form
Offeror prescribes offer can only be accepted in
specified way, not bound unless acceptance is
made that way.
*Offeror may waive the requirements of
acceptance
4. Must be received by offeror (instantaneous
communication)
Modes of instantaneous communication: Face-to-
face negotiations, telephone, fax
Issue: Whether acceptance must be received by
offeror?
Entores v Miles Far East Corp (1955) - Held:
A contract is made by instantaneous
communication.
It can only be complete when the acceptance is
received by the offeror.
*EXCEPTION: POSTAL ACCEPTANCE RULE
Acceptance takes place when the letter of
acceptance is posted, does not matter whether
letter reaches.
Conditions:
1. Only where postal acceptance is expressly/
impliedly authorised
2. Letter of acceptance is properly stamped and
addressed.
Issue: Whether acceptance took place based on
Postal Acceptance Rule?
Adam v Lindell (1818)
Household Fire & Carriage Accident Insurance Co v
Grant (1879)
Held: Contract concluded when letter of
acceptance is posted.
FINAL AND UNQUALIFIED ACCEPTANCE:
Must agree to all terms contained in offer. Any
attempt of new terms = counter-offer.
Battle of Forms
Counter-offers made constantly where each
counter-offer destroys original offer & makes up
new offer.
*Ultimately forms contract on who fires the last
shot
Butter Machine Tool Co v Ex-Cell-O Corp (1977) -
Held:
Endless exchange resulting no contract.
Looking through documents passing between
them to determine if there was any agreement
despite differences
ELECTRONIC TRANSACTIONS ACT:
S(11):
Offer and acceptance can be made electronically
S(13):
Message from automated system = message from
the person
Time of dispatch = time it leaves information
system OR time it is received
S(14):
Invitation to make offers unless intention to be
bound
S(16):
Errors in electronic communications – right to
withdraw if system doesn’t allow opportunity to
correct it – early notification and not received
material benefit