Question 1 May 2007 Zone A

On Monday, Andrew advertised in a local newspaper, the „Mudgeborough Gazette‟, that

he would pay a reward of £10,000 to the person who found his collie dog, Buddy.
Andrew had lost Buddy when they were rounding up sheep on a nearby hillside. On
Wednesday, Charles bought a tracking device costing £500 to attempt to locate Buddy.
On Thursday, Darwin, a shepherd, found Buddy rounding up his sheep. Also on
Thursday, Andrew placed a notice in the Mudgeborough grocery shop stating that the
reward could no longer be claimed. On Friday, Darwin brought Buddy into
Mudgeborough. He read the advertisement in the Gazette and brought Buddy to
Andrew. Andrew, while delighted with the return of Buddy, refused to pay Darwin
anything.

Advise Andrew. To what extent, if any, would your answer differ if Darwin was the local
dog catcher?

Answer Guidelines

 Andrew needs an advice pertaining whether he has to pay Darwin or Charles

£10,000 as he advertised.
 Charles and Darwin will argue that Andrew breached the contract as what he
stated in the advertisement.
 For a valid contract, as per Lord Wilberforce in the case of Eurymedon, there are
4 requirements to be satisfied:
1) Intention to create legal relationship
2) Agreement
3) Consideration
4) No vitiating factors.
 Agreement is a promise or set of promises which is binding in law which consist
of Offer and Acceptance and which give rise to consensus ad idem which means
meeting of mind
 Offer – Expression of willingness to be bound on the specified terms of the
contract c/f (Prof Treitel)
 Invitation to Treat (ITT) - Expression of willingness to negotiate with an intention
to bind in contract at later stage. (Prof Treitel)
Offer

 Gibson v Manchester City Council

Defendant wrote a letter to Claimant stating that the council “may be prepared to
sell the house to you at the purchase price of £2,725 less 20% = £2,180 (freehold)”. The
House of Lords held that: lacks the force of an offer owing to the presence of the
word “may” which is merely precatory in nature. It was at most an invitation to
treat.
 Storer v Manchester City Council (1974),

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 The Court of Appeal found that there was a binding contract. The Council had
sent Storer a communication that they intended would be binding upon his
acceptance. All Storer had to do to bind himself to the later sale was to sign the
document and return it.
 On the fact, one needs to refer to stereotypical situation: Advertisement
 Advertisement divided into two:
1) Bilateral Advertisement – Promise requires for a promise back
General Rule: ITT (Pattridge v Crittendon)
Exception: Offer (contrary intention is proven) (Bigg Boyd v Gibbins)
2) Unilateral Advertisement – Promise in return for an action
Rule: Offer to the whole world (Carlill v Carbolic Smoke Ball
Company)

Status of Andrew‟s Advertisement.

 On the fact, Andrew‟s advertisement is a Unilateral Advertisement which requires

a promise for a promise back.
 Andrew placed an advertisement which reads:
“He would pay a reward of £10,000 to the person who found his collie dog, Buddy”
 Carlill v Carbolic Smoke Ball Company
The Carbolic Smoke Ball company displayed an advertisement saying that £100
would be paid to anyone who could, inter alia, use their smoke ball product for 2
weeks and then contract influenza. The offer stated that £1000 had been
deposited in a bank, and the address of that bank was given. Mrs Carlill followed
the instructions exactly, then contracted influenza. The Carbolic Smoke Ball
company refused to pay Mrs Carlill.
Held:
 The £1000 deposit showed that the advert was more than a mere puff.
 An offer can be made to the world at large, but a contract would only be
made with those who performed the conditions of the offer.
 The Carbolic Smoke Ball Co could not expect to be notified of acceptance
of the offer, the performance of the conditions constituted acceptance.
 Consideration was provided by the sale of the smoke ball, even if not
directly from the defendant company
 Soulsbury v Soulsbury (2007)
Following the end of a 20-year marriage the court made a periodical payments
order in the wife's favour. Some years later, the wife agreed to waive her
entitlement to the periodical payments on the basis of the husband's promise to
leave the wife £100,000 in his will. The agreement between husband and wife
was not put before the court, and had therefore not been approved. Nonetheless,
the husband changed his will according to the terms of the agreement, and
stopped making the periodical payments, while the wife made no attempt to
recover such payments via the courts. The husband then, having become very ill,
remarried, which had the effect of revoking his will. The husband died on the

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 evening of the wedding day. The second wife refused to make any payment to
the first wife on the basis that the agreement was unenforceable.
Held: The agreement was perfectly valid and enforceable, as a classic unilateral
contract.
 Lord Justice Longmore at para 49:
“This is a classic Unilateral Contract of the Carlill v Carbolic Smoke Ball Company or the „walk to
the York‟ kind. Once the promise acts on the promise by inhaling the smoke ball, by starting the
walk to York or [as here] by not suing for the maintenance to which she was entitled, the promisor
cannot withdraw or revoke his offer. But there is no obligation on the promisee to continue to
inhale, to walk the whole way to York or to refrain from suing. It is just that if she inhales no more,
gives up the walk to York or does sue for her maintenance, she is not entitled to claim the
promised sum”
 By analyzing above cases, it is clear that Andrew‟s advertisement is a unilateral
contract and as such Andrew is the offeror.

Acceptance

 Acceptance is an unconditional and unqualified assent to all the terms of the

contract. (Hyde v Wrench)
 Acceptance c/f Counter offer (Mirror image of an offer - Terminate the earlier
offer) c/f Mere Inquiry (Request for more information; Stevenson v Mcclean)
 Valid acceptance has to be communicated. Exception:
1) Silence
2) Postal Rule
3) Acceptance by conduct
4) Unilateral Contract
Unilateral contract will be accepted by performing the stipulated act
(Luxar v Cooper)
 Stipulated Act: Finding and Returning Collie, the Dog.

Charles
 Charles bought a tracking device costing £500 to attempt to locate Buddy.
 Buying tracking device to attempt to find the dog is not the stipulated act.
 As such Charles has not performed the stipulated act and consequently has not
accepted the offer.
Darwin
 Darwin found the dog and returned the Dog to Andrew.
 As such Prima Facie, Darwin did the stipulated act and accepted the offer.
 However, problem may arise as to acceptance in ignorance of the offer and
revocation of offer by Andrew.

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Acceptance in Ignorance of Offer
 Darwin located the dog first before knowing about the advertisement.
 R v Clarke (1927) (Australian High Court)
A reward has been offered for anyone giving information which led to the
conviction of those responsible for the murders of policemen. Clarke gave
information which led to such arrest and conviction. However, his claim to the
reward was resisted. Clarke's motive and intention in giving the evidence was to
protect himself and to clear himself of the charge of murder. Only after arrest,
conviction and appeal by the others, did Clarke think of claiming the reward
Held:
 Clarke did not act "in reliance upon the offer or with the intention of entering into any
contract" - Although clearly, the convictions would not have come about
without his evidence.
 Isaacs ACJ points out in his judgment the difficult case of Gibbons v
Proctor (1891) where, by contrast, a policeman was allowed to recover a
reward, although he did not know of the existence of the reward when he
sent off the information. He points out that in Anson on Contracts it was
stated that that decision was wrong, and that he (Isaacs) thought it was
too.
 Gibbons v Proctor (1891)
Plaintiff (P), a police officer, brought action against Defendant (D) for £25 being
D's offer of reward “for anybody who provides information leading to the
conviction of a person who criminally assaulted a young girl”. Offer was made in
the afternoon, P obtained the information in the morning of same day (May 29).
At the time P gave the information to a fellow police officer he was unaware of
the offer of the reward. P had also told a 3rd party (Coffin) who told a 4th party, a
superior officer (Penn), to take the information to the relevant authority. When
Penn got the information and passed it onto the relevant authority, Penn was
already aware of the reward being offered.

Held: When a party has knowledge of a reward and act on behalf of an individual
that meets the necessary conditions of the reward but have no knowledge of a
reward, the latter individual can claim the reward being offered

 On the fact, Gibbons v Proctor (1891) was an UK case. However, R v Clarke was
an Australian case. By following precedent, one should follow Gibbons v Proctor
(1891).
 However, Gibbons v Proctor was criticized and was even declared by Professor
Anson as per incuriam.

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  As such by following R v Clarke, Darwin may have difficulties in claiming the
reward since he was not aware of the reward when he found the dog.
 As such he accepted the offer by performing the stipulated act in ignorance of the
offer.
Revocation
 On Thursday, Andrew placed a notice in the Mudgeborough grocery shop stating
that the reward could no longer be claimed.
 On Friday, Darwin brought Buddy into Mudgeborough.
 General Rule: Offer can be revoked if it satisfies 2 requirements: (Byrne & Co v
Van Tienhoven & Co (1880)
1. Must be done before acceptance
2. Must be made in the same/better mode of communication
 On the fact, the offer was revoked 1 day earlier than the acceptance since
Darwin brought the dog to Mudgeborough on Friday but the offer was revoked on
Thursday.
 However, Andrew made the advertisement in Mudgeborough Local Gazette
newspaper but revoked it by placing a notice in the Mudgeborough grocery shop.
 Obviously the notice would not cover the same audience as the newspaper.
 However unilateral offer cannot be revoked if the offeree already embarked into
performance. (Errington v Errington & Woods)(1952)
 (Errington v Errington & Woods)(1952)
In 1930, a father bought a house for his son and daughter-in-law (Wood) to live
in, telling her that the down-payment was a gift, but they were expected to pay
the mortgage and that "the house will be your property when the mortgage is
paid". He also said that when he retired he would put the house in their names.
Wood paid mortgage instalments regularly for some time, but when they found
them too burdensome the father agreed to make those payments as well. The
father died leaving his estate to his wife (Errington). After the father's death,
Wood split from Errington's son. Errington sued for possession of the house.

Held: Denning, for a unanimous court, held there was no express promise by the
son and daughter-in-law to pay the installments, and the court cannot imply those
terms. He characterizes the father's promise as a unilateral contract; the
performative act paying for the mortgage, and thus it would only be revocable if
the couple did not make the payments. Once performance has started the offeror
cannot revoke the offer.
 McGovney (1914) 27 Harv L Rev, 644, 659,
Suggested that there are two separate offers in the unilateral offeror‟s statement- namely an
express offer to pay on performance of the act, and an implied offer not to revoke once the
offeree starts to perform. This implied offer is accepted by beginning performance and if the
offeror were to attempt to revoke, he would be liable for breach of this promise. The problem with
this view is that it would not prevent revocation, but would mean only that damages would be

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 payable for breach of the implied offer not to revoke. Errington, however appears to be based on
the view that revocation is not possible once the offeree has started to perform.

 Pollock on Contract
In unilateral contract performance of the act requested is both acceptance and the consideration.
Acceptance is stated to occur when the offeree starts to performso that revocation is no longer
possible, but the consideration is the completion of the act and, until that time, no reward is
payable. Pollock‟s definition was accepted in Schweppe v Harper (2008).
 On the fact, by following the abovementioned cases, the revocation is not valid
since Darwin already embarked into performance.

Variation
 If Darwin is a local dog catcher, the act of him founding dog more likely to be
performance of existing duty imposed by law. (Collins v Godefroy)
 However if he performed his duty over and above, he may deserved the award.
(Glasbrook Bros v Glamorgan County County Council (1925).

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May 2004 Zone B Question 1

On Monday, Arnold placed an advertisement in „The Daily Much‟ which read „£10,000
Reward – for the safe return of Bessy, a prize winning Holstein cow‟. A description of
Bessy was given which included the fact that she was wearing a collar bearing her
name and that she had left Arnold‟s field with her sister cow, Clara. On Tuesday Daniel,
having read the advertisement, set off to the countryside to search for Bessy and Clara.
Daniel spent £100 on his railway ticket and £250 on a week‟s accommodation. On
Wednesday, Edwin, a neighbour of Arnold‟s, found Bessy and wrote to Arnold that
„£10,000 is not nearly a sufficient reward for a cow of this value – would you pay
£15,000?‟. Later that day, Bessy broke out of Edwin‟s barn. Frank found her on
Thursday and took her back to his farm. On Friday, Daniel found Clara and returned her
to Arnold. Arnold refused to pay Daniel anything and decided to cancel his reward
advertisement. He placed a small note on the door of the village shop announcing that
no moneys were payable for the return of Bessy. Frank, noticing Bessy‟s address on
her collar took her to Arnold on Saturday. As Arnold was not in, he left her in Arnold‟s
field and returned home. Edwin, noticing Frank‟s actions left a note at Arnold‟s house
claiming the reward.
Advise Arnold.

Answer Guideline

 Arnold needs an advice pertaining whether he has to pay Daniel, Edwin and
Frank £10,000 as he advertised.
 Daniel, Edwin and Frank will argue that Anrnold breached the contract as what
he stated in the advertisement.
 For a valid contract, as per Lord Wilberforce in the case of Eurymedon, there are
4 requirements to be satisfied:
1) Intention to create legal relationship
2) Agreement
3) Consideration
4) No vitiating factors.
 Agreement is a promise or set of promises which is binding in law which consist
of Offer and Acceptance and which give rise to consensus ad idem which means
meeting of mind
 Offer – Expression of willingness to be bound on the specified terms of the
contract c/f (Prof Treitel)
 Invitation to Treat (ITT) - Expression of willingness to negotiate with an intention
to bind in contract at later stage. (Prof Treitel)
Offer

 Gibson v Manchester City Council

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 Defendant wrote a letter to Claimant stating that the council “may be prepared to
sell the house to you at the purchase price of £2,725 less 20% = £2,180 (freehold)”. The
House of Lords held that: lacks the force of an offer owing to the presence of the
word “may” which is merely precatory in nature. It was at most an invitation to
treat.
 Storer v Manchester City Council (1974),
The Court of Appeal found that there was a binding contract. The Council had
sent Storer a communication that they intended would be binding upon his
acceptance. All Storer had to do to bind himself to the later sale was to sign the
document and return it.
 On the fact, one needs to refer to stereotypical situation: Advertisement
 Advertisement divided into two:
1) Bilateral Advertisement – Promise requires for a promise back
General Rule: ITT (Pattridge v Crittendon)
Exception: Offer (contrary intention is proven) (Bigg Boyd v Gibbins)
2) Unilateral Advertisement – Promise in return for an action
Rule: Offer to the whole world (Carlill v Carbolic Smoke Ball
Company)

Status of Arnold‟s Advertisement.

 On the fact, Andrew‟s advertisement is a Unilateral Advertisement which requires

a promise for a promise back.
 Arnold placed an advertisement which reads:
„£10,000 Reward – for the safe return of Bessy, a prize winning Holstein cow‟. A description of
Bessy was given which included the fact that she was wearing a collar bearing her name and that
she had left Arnold‟s field with her sister cow, Clara
 Carlill v Carbolic Smoke Ball Company
The Carbolic Smoke Ball company displayed an advertisement saying that £100
would be paid to anyone who could, inter alia, use their smoke ball product for 2
weeks and then contract influenza. The offer stated that £1000 had been
deposited in a bank, and the address of that bank was given. Mrs Carlill followed
the instructions exactly, then contracted influenza. The Carbolic Smoke Ball
company refused to pay Mrs Carlill.
Held:
 The £1000 deposit showed that the advert was more than a mere puff.
 An offer can be made to the world at large, but a contract would only be
made with those who performed the conditions of the offer.
 The Carbolic Smoke Ball Co could not expect to be notified of acceptance
of the offer, the performance of the conditions constituted acceptance.
 Consideration was provided by the sale of the smoke ball, even if not
directly from the defendant company
 By referring to the above case, it is clear that Arnold made a Unilateral offer
which requires a promise for a promise back.

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Acceptance

 Acceptance is an unconditional and unqualified assent to all the terms of the

contract. (Hyde v Wrench)
 Acceptance c/f Counter offer (Mirror image of an offer - Terminate the earlier
offer) c/f Mere Inquiry (Request for more information; Stevenson v Mcclean)
 Valid acceptance has to be communicated. Exception:
1) Silence
2) Postal Rule
3) Acceptance by conduct
4) Unilateral Contract
Unilateral contract will be accepted by performing the stipulated act
(Luxar v Cooper)
 Stipulated Act: Finding and Returning Bessy (Safe return of Bessy)

Daniel
 On Tuesday Daniel, having read the advertisement, set off to the countryside to
search for Bessy and Clara.
 Daniel spent £100 on his railway ticket and £250 on a week‟s accommodation.
 However, Daniel has not performed the stipulated act which is to find and return
Bessy. Finding Clara instead was not the term of the offer.
 As such by following Luxar v Cooper, Arnold need not to reward Daniel since he
has not performed the stipulated act.

Edwin
 On Wednesday, Edwin, a neighbour of Arnold‟s, found Bessy and wrote to
Arnold that „£10,000 is not nearly a sufficient reward for a cow of this value – would you
pay £15,000?‟.
 Later that day, Bessy broke out of Edwin‟s barn.
 On the fact, the stipulated act is to find and return the cow. However Edwin made
a counter offer for 15 000 pounds.
 Counter offer is a mirror image of an offer and it has the effect of terminating the
earlier offer.
 Hyde v Wrench (1840)
The defendant offered to sell a farm to the claimant for £1,000. The claimant in
reply offered £950 which the defendant refused. The claimant then sought to
accept the original offer of £1,000. The defendant refused to sell to the claimant
and the claimant brought an action for specific performance.

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 Held:
There was no contract. Where a counter offer is made this destroys the original
offer so that it is no longer open to the offeree to accept.
 Butler Machine Tool Co Ltd v Ex-Cell-O Corporation (England) Ltd (1979)
Lord Denning MR preferred the view that the documents were to be considered as a whole, and
the important factor was finding the decisive document; on the other hand, Lawton and
Bridge LJJ preferred traditional offer-acceptance analysis, and considered that the last counter-
offer prior to the beginning of performance voided all preceding offers. The absence of any
additional counter-offer or refusal by the other party is understood as an implied acceptance.
 Since Edwin counter offered the price to 15 000 pounds, the earlier offer of 10
000 pounds will be terminated.
 In any possibility, Bessy has broken out of his farm and as such Arnold need not
to give the 10 000 pounds as promised even if Edwin never countered the offer.
 There will be an issue as to Intention to create legal relationship since Edwin is
the neighbor of Arnold.
 General rule: Domestic/Social relationship – No ITCLR
 The presumption can be rebutted. Edwin must adduce sufficient evidence to
rebut the presumption.

Frank
 Frank found her on Thursday and took her back to his farm.
 He returned Bessy on Saturday (left it in the farm since Arnold wasn‟t around)
 Prima facie, Frank did the stipulated act and as such Arnold needs to give him
the 10 000 pounds as what he promised.
 However, there is an issue as to revocation that need to be addressed.

Revocation
 Arnold placed a small note on the door of the village shop announcing that no
moneys were payable for the return of Bessy.
 General Rule: Offer can be revoked if it satisfies 2 requirements: (Byrne & Co v
Van Tienhoven & Co (1880)
1. Must be done before acceptance
2. Must be made in the same/better mode of communication
 On the fact, the revocation was made on Thursday and Frank returned Bessy on
Saturday.
 As such the revocation was made before the acceptance.
 However the advertisement was made in Daily Much newspaper but the
revocation was communicated via a small note on the door of the village shop.
 Obviously newspaper advertisement would cover large audience than those who
reads it at the door of the village shop.

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 Shuey v USA (1875)
Following President Lincoln's assassination, the Secretary of War issued and
published a $25,000 reward "for the apprehension of John H. Surratt, one of
Booth's accomplices." Plaintiff aided in capture of Surratt. The reward had been
withdrawn (several months prior to Surratt's capture) in the newspaper. The U.S.
paid $10,000 for Plaintiff's assistance in capturing and identifying Surratt.
Held:
 Notice of revocation was communicated in same method as notice of
offer. Revocation received same notoriety as offer, hence it was validly
communicated.
 Offer was revoked before acceptance and/or anyone acted on it (a.k.a.
offeree had not begun „part-performance‟ before the offer was revoked).
 Though plaintiff was genuinely ignorant of revocation, it is immaterial
 However unilateral offer cannot be revoked if the offeree already embarked into
performance. (Daulia v Four Mills Bank)(1978)
 Daulia v Four Mills Bank (1978)
The claimant wished to purchase a house from the defendant. The defendant
promised that if the claimant sorted out a bankers draft, he would complete the
contract for sale. The claimant completed the banker‟s draft, but the defendant
refused to complete the contract.
Held: A unilateral contract did exist. Goff LJ stated obiter on the issue of revocation of a
unilateral offer:
"Whilst I think the true view of a unilateral contract must in general be that the offeror is entitled to
require full performance of the condition which he has imposed and short of that he is not bound,
that must be subject to one important qualification, which stems from the fact that there must be
an implied obligation on the part of the offeror not to prevent the condition becoming satisfied,
which obligation it seems to me must arise as soon as the offeree starts to perform. Until then the
offeror can revoke the whole thing, but once the offeree has embarked on performance it is too
late for the offeror to revoke his offer."
 On the fact, by following the above case, once Frank already embarked into
performance, it is unlikely the court will allow Arnold to revoke the offer.

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Question 1 2008 ZONE A

Zara placed an advertisement in the local newspaper: “Four „Burmese‟ kittens for sale.
£300 each, lovely pets.” Xavier went to see the kittens and asked Zara to reserve the
smallest one for him and said that he would return in three weeks to collect the kitten.
Later that day, Zara told her husband that Xavier was to have the smallest kitten in the
litter. Xavier never returned.
Vic telephoned Zara about the kittens. After enquiring about the breed, he said, „I‟ll think
about it‟. The next day, Vic wrote Zara, „I‟ve decided that I‟ll have the oldest one from
the litter.‟ Before the letter was delivered, Vic sent an email to Zara stating that he was
not interested after all. Because of a problem with Zara‟s server, she did not receive the
email until after the letter had arrived.
Yvonne sent an email to Zara stating „£300 is very expensive for a young Burmese. Will
you accept £200?‟ When Zara replied by email that she would not, Yvonne posted a
letter which read „I accept your offer to sell a Burmese kitten at £300.‟
Walter paid Zara £300 and took one of the kittens. Two weeks later he complained to
Zara that the kitten was in the habit of chewing the furniture. Zara said „Never mind, he
will grow out of it.‟ When Walter took the kitten to the vet to see if the habit could be
broken, the vet informed him that the kitten was not a purebred Burmese but a much
less valuable cross-breed. Walter demands the return of his money from Zara and
compensation for the damage to his furniture.

Advise Zara.

Answer Guideline
 Zara needs an advice pertaining the compellability to sell the kitten to Xavier, Vic,
Yvonne and Walter.
 She will be only compelled to sell the kittens to any of them if there is a valid
contract between any/all of them with Zara.
 Lord Wilberforce in the case of Eurymedon:
1) Intention to create legal relationship (ITCLR)
2) Agreement
3) Consideration
4) No vitiating factors
 On the fact, X, V, Y and W has to prove the existence of contract by following the
above requirements.
 Agreement: Promise or set of promises which is binding in law which consist of
offer and acceptance and which give rise to consensus ad idem which means
meeting of mind.
 Offer – Expression of willingness to be bound c/f (Prof Treitel)
 ITT - Expression of willingness to negotiate. (Prof Treitel)
 Two ways to decide offer:

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 1) Words (Imperative or Precatory) (Gibson v Manchester City Council;
Storer v Manchester City Council)
2) Stereotypical situations
 On the fact, one may look at the stereotypical situation which in advertisement.
 Advertisement divided into two:
1) Unilateral advertisement - Promise requires for an action
Rule: Offer to the entire world (Carlill v Carbolic Smoke Ball Company)
2) Bilateral advertisement: Promise requires for a promise back
General rule: Invitation to treat (Pattridge v Crittendon)
Exception: Offer (Unless contrary intention is proven) (Bigg v Boyd
Gibbins)

Status of the advertisement

 On the fact, Zara made an advertisement in the local newspaper:
“Four „Burmese‟ kittens for sale. £300 each, lovely pets.”
 Scammel v Ouston – If the terms are precise and clear, it will amount to an offer
 Havey v Facey – Price is not an indicative factor to decide an offer
 Cliffton v Palumbo – If the magnitude of the transaction is large, more information
is needed before construing a statement as an offer.
 On the fact: Zara named the kitten‟s breed (Burmese Kittens), She names the
price and she named the characteristic of the kittens (lovely).
 Since this is a bilateral advertisement, this will be more likely to be construed as
an ITT.

Xavier
 Xavier went to see the kittens and reserved the smallest for him.
 He said he will return in three weeks‟ time and he never returned.
 On the fact, Xavier‟s words are precise and clear (Scammel v Ouston)
 Since he asked Zara to reserve the smallest or him, it is an indicative word/
imperative word to bind into a contract.
 Therefore, Xavier made a valid offer and he is an offerror
 However, Xavier said he will return within three weeks. An offer cannot be open
forever and to secure the promise to reserve, Xavier should have given
consideration.
 In the absence of consideration, it will be very difficult to bind Xavier and Zara
into the contract (Lush J, Currie v Misa)
Vic
 Vic called Zara and enquired about the kittens and said “I‟ll think about it”
 This is an ITT (Invitation to treat) since he used a precatory word to express his
intention. (Gibson v Manchester City Council)
 When he sent a letter to Zara, he said „I‟ve decided that I‟ll have the oldest one
from the litter.”
 The word of the letter is sufficiently certain and precise to give rise to an offer.
(Storer v Manchester City Council)

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  It should be noted at this point that, Postal Rule is not applicable to offer letters
and as such only actual communication suffice. (R v Clarke)
 However he revoked the offer by sending an email.
 Revocation
For the revocation to be valid: (Byrne v Van Tien Hoven)
1) It must be done prior to acceptance
2) It must be done in the same or better mode of communication
On the fact, the revocation was communicated before acceptance
since Zara yet to accept the offer.
Question: Email compared to letter could be construed as a same or
better communication?
It could be argued that email is the better mode of telecommunication
even Zara only managed to read the email after the letter arrived.
Drawing an analogy from Lord Denning in the case of
Communication of an acceptance in Entores v Miles Far East
1) If a face to face oral acceptance is drowned out by a noisy
aircraft flying overhead the offeree must repeat his acceptance
once the aircraft has passed.
2) If the telephone goes „dead‟ before the acceptance is
completed, the offeree must telephone back to complete the
acceptance
3) If the offeror does not catch the clear audible words of an
acceptance or the printer receiving a telex runs out of ink, but
the offeror does not borther to ask the message to be repeated,
it‟s the offeror‟s fault that he did not get the acceptance and he
will be bound.
Where neither party is blameworthy, the rule requiring actual
communication of acceptance in favours of the offeror.
“ Lord Denning said that if „the offeror without any fault on his part
does not receive the message of acceptance yet the sender of it
reasonable believes it has got home when it has not-then I think there
is no contract.”
As such the burden if on Vic to communication the revocation and
since he communicated it, there will be a valid revocation
In the absence of acceptance by Zara before the revocation of Vic, Vic
is not bound to buy the kittens and Zara is not bound to accept it.

Yvonne
 Yvonne stated that 300 pounds is expansive and she would like to have that
kitten for 200 pounds.
 It should be noted that Zara‟s initial advertisement is an ITT and as such Yvonne
is making an offer to buy the kitten for 200 pounds
 However, Zara said she is not accepting the offer for 200 pounds. At this point
there is no contract between them.

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  Yvonne again made a statement to buy the kittens for the stated 300 pounds in
the advertisement. The status of the statement of Yvonne is another fresh new
offer since the earlier offer was rejected outright.
 Even though Yvonne posted a letter stating „I accept your offer to sell a Burmese
kitten at £300.‟, the letter is still considered to be an offer letter and Postal Rule is
not applicable accordingly.

Walter
 Walter paid 300 pounds and took the kitten. It should be noted that this will be
considered as an acceptance by conduct.
 An acceptance has to be (Hyde v Wrench)
1) Unconditional c/f Counter Offer c/f Mere Inquiry
2) Unqualified
 Since Walter accepted it unconditionally, he is an offeree and therefore Zara
bound to sell the kittens to him.

The rest of the answer discussing misrepresentation and past

consideration was intentionally omitted

Question 1 May 2003 Zone A

Alexander has four pet white rats which have been trained to dance together as a
group. They escape from their cage. Alexander places an advertisement in the local
newspaper describing the rats and promises to pay £1000 for each rat to anyone who
returns him.
Beatrice, Alexander's neighbor, finds one of the rats. She keeps it warm and well fed in
a shoe box over-night and then takes it to Alexander's house. Before she can reach the
house, the rat escapes from the shoe box, runs away from her, and then wriggles
through a hole back into Alexander‟s house.
Charles searches diligently for the rats for two days. He spends £10 on bus fare
travelling to different parts of the city. When he finds one of the rats, he takes it home
with him and does not immediately return it.
David finds another rat. Unfortunately, it has been savaged by a fox and is now dead.
David takes the corpse to Alexander, who refuses to pay him anything.
Ethel, Alexander's sister, finds another rat in her room. She gives the rat to Alexander,
who refuses to pay her anything.
Alexander decides that, as one of the rats is dead, there is no point in resembling them
as a dancing group. Accordingly, he places leaflets about the city cancelling the promise
of a reward.
Charles does not see the leaflets and returns the rat he found to Alexander later that
day. Alexander refuses to pay him anything. Advise Alexander.

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Answer Guideline

 Alexander needs an advice pertaining his liabilities to Beatrice, Charles, David

and Ethel.
 B, C, D and E will argue that Alexander breached the contract as what he stated
in is advertisement.
 For a valid contract, as per Lord Wilberforce in the case of Eurymedon, there are
4 requirements to be satisfied:
1) Intention to create legal relationship
2) Agreement
3) Consideration
4) No vitiating factors.
 Agreement is a promise or set of promises which is binding in law which consist
of Offer and Acceptance and which give rise to consensus ad idem which means
meeting of mind
 Offer – Expression of willingness to be bound on the specified terms of the
contract c/f (Prof Treitel)
 Invitation to Treat (ITT) - Expression of willingness to negotiate with an intention
to bind in contract at later stage. (Prof Treitel)

Offer

 Gibson v Manchester City Council

Defendant wrote a letter to Claimant stating that the council “may be prepared to
sell the house to you at the purchase price of £2,725 less 20% = £2,180 (freehold)”. The
House of Lords held that: lacks the force of an offer owing to the presence of the
word “may” which is merely precatory in nature. It was at most an invitation to
treat.
 Storer v Manchester City Council (1974),
The Court of Appeal found that there was a binding contract. The Council had
sent Storer a communication that they intended would be binding upon his
acceptance. All Storer had to do to bind himself to the later sale was to sign the
document and return it.
 On the fact, one needs to refer to stereotypical situation: Advertisement
 Advertisement divided into two:
3) Bilateral Advertisement – Promise requires for a promise back
General Rule: ITT (Pattridge v Crittendon)
Exception: Offer (contrary intention is proven) (Bigg Boyd v Gibbins)
4) Unilateral Advertisement – Promise in return for an action
Rule: Offer to the whole world (Carlill v Carbolic Smoke Ball
Company)

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Status of Alexander‟s advertisement

 On the fact: Unilateral advertisement

Alexander places an advertisement in the local newspaper describing the rats and promises to
pay £1000 for each rat to anyone who returns him.
 Carlill v Carbolic Smoke ball company
The Defendant, the Carbolic Smoke Ball Company of London (Defendant),
placed an advertisement in several newspapers on November 13, 1891,
stating that its product, “The Carbolic Smoke Ball”, when used three times
daily, for two weeks, would prevent colds and influenza.
The makers of the smoke ball additionally offered a 100£ reward to
anyone who caught influenza using their product, guaranteeing this
reward by stating in their advertisement that they had deposited 1000£ in
the bank as a show of their sincerity.
The Plaintiff, Lilli Carlill (Plaintiff), bought a smoke ball and used it as
directed. Several weeks after she began using the smoke ball, Plaintiff
caught the flu.
Defendant‟s Appeal was dismissed; Plaintiff was entitled to recover 100£.
Unilateral advertisements were stated to be an advertisement to the whole
world.
 On the fact, by following the above case, Alexander‟s advertisement is a
unilateral offer and therefore he is the offerror.
Acceptance

 Acceptance is an unconditional and unqualified assent to all the terms of the

contract. (Hyde v Wrench)
 Acceptance c/f Counter offer (Mirror image of an offer - Terminate the earlier
offer) c/f Mere Inquiry (Request for more information; Stevenson v Mcclean)
 Valid acceptance has to be communicated. Exception:
5) Silence
6) Postal Rule
7) Acceptance by conduct
8) Unilateral Contract
Unilateral contract will be accepted by performing the stipulated act
(Luxar v Cooper)
 Stipulated Act: Finding and Returning the Rat

Beatrice

 Has she performed the stipulated act?

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  She kept it warm and well fed. Before she reaches Alexander‟s House, the rat
escapes and entered into Alexander‟s house
 Beatrice has not performed the stipulated act.
Charles

 Charles searches diligently for the rats for two days. He spends £10 on bus fare
travelling to different parts of the city.
 When he finds one of the rats, he takes it home with him and does not
immediately return it.
 However, by the time he returns it, Alexander has already placed a leaflet to
revoke back the offer.
 Revocation:
1) Must be made before acceptance
2) Must be communicated in a same or better mode of communication
(Byrne v Van Tien Hoven; Shuey v USA)
 Once the offeree embarked into performance, it is unfair for the offerror to revoke
it (Erringtonv Errington Woods; Daulia v Four Mills Bank)
 On the fact:
1) The Revocation made before acceptance
2) Advertisement made in the local newspaper; Revocation made by placing
leaflet about the city
3) It will be also unfair for Alexander to revoke the offer since Charles has
already embarked into performance.
David

 The rat was dead savaged by a fox

 Does Alexander obliged to give 1000 for dead rat?
 A has not stipulated as to whether the rats should be alive or not.
 This would suggest that by returning a dead rat, D has performed the act of
acceptance. However, the fact had indicated that A trained the rats to dance
together as a group and it could be implied that the rats are to be alive.
 Therefore, D did not accept the offer according to A‟s term.
Ethel

 Ethel performed the stipulated act: Finding and returning the rat
 Issues: Intention to create legal relationship- Brother/Sister relationship
(Balfour v Balfour; Merritt v Merritt)
 General rule: Domestic relationship – No ITCLR
 The presumption can be rebutted. Ethel must adduce sufficient evidence to rebut
the presumption.

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