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RMIT Classification: Trusted


Week 2 AGREEMENT
RMIT Classification: Trusted

IRAC for Problem Solving


IRAC
What are the ISSUE(s) – identify the material facts and issues,
RULES (research/identify the law and authority, normally cases and statutes),
APPLY the law (rules) and
reach a (tentative) CONCLUSION.
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Four Elements
Agreement
Consideration
Intention to create Legal Relations
Certainty
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Nature of Agreement
The formation of a contract requires a ‘consensus ad idem’, i.e. a meeting of the minds
regarding the subject matter involved
Agreement is based on a voluntary assumption of rights and obligations (classical
contract theory)
In determining whether an agreement has been reached, courts use an objective test,
based on the reasonable person’s assessment of the facts. Secret mental reservations
are ignored (Carlill v Carbolic Smokeball / Taylor v Johnson)
Traditional doctrine of agreement based on OFFER by one party and its correspondent
ACCEPTANCE by another (offer + acceptance = agreement)
(can also be demonstrated without offer & acceptance)
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Bilateral and unilateral contracts


• Bilateral Contract:
– Each party has rights and obligations and needs to perform
• Unilateral contract:
– 2 parties to the contract (“A” and “B”)
– Only 1 promise is made by A (e.g. A (offeror) promises to pay $100 to B if B finds A’s lost
puppy). (Offeree ( B ) has no obligation to do anything )
– But if B performs the stipulated task, it means B accepts A’s offer. Contract is formed at
time B performs what A asks.
– Once the contract is made, A is bound ie under obligations and B has rights and nothing
more to do
– THAT’S WHY- called “unilateral”- one party (B) has performed obligation BY the time of
formation=ONLY ONE PARTY IS EVER UNDER AN OBLIGATION (A)
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Offer
Identifying an offer ‘in the wild”
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Nature of Offer
An offer is the indication by one In deciding whether an offer has been made,
person (offeror) to another courts employ an objective test (Carlill v
(offeree) of his or her willingness Carbolic Smoke Ball)
to enter into a contract with that Offeror’s intention is irrelevant
person on certain terms Intention ascertained from point of view of
Although an offer cannot in itself reasonable person in offeree’s position (Toll v
Alphapharm)
give rise to contract, it creates in
Offer may be made to an individual, group or
the offeree a power subsequently world at large
to create a contract by accepting Offer provides all the information required so
the offer (unless the offer has that the terms can be identified when the offer
been withdrawn or terminated) is accepted.
RMIT Classification: Trusted

Gibson v Manchester City Council [1979] 1 WLR 294


House of Lords – Appeal from the Court of Appeal
Facts:
• In 1970 Manchester City Council (“MCC”) adopted a policy of selling council houses to its
tenants. Mr. Gibson was one such tenant.
• Gibson applied to MCC for details of his house price and mortgage terms. On 10 February
1971, MCC wrote to Gibson stating:
– [MCC] may be prepared to sell the house to you at a price of £2,180...
– If you would like to make formal application to buy your Council house please complete the
enclosed application form and return it ...
• Gibson completed the application form, headed “Application to buy a council house”, except for
the purchase price. The form concluded with the words “I now wish to purchase my Council
house...”.
• Gibson returned the application form to Council on 5 March 1971.
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The issue: Is there a contract ?


Before formal contracts were prepared, elections resulted in a change in control of the MCC.
The new MCC discontinued the policy of selling council houses to tenants and refused to
process Gibson’s application.
Gibson argued there was already a binding contract.
Letter of 10 February was MCC’s offer to sell.
Gibson’s return of application on 5 March was his acceptance.
Therefore, binding contract formed.
Issue: The question is whether in the correspondence between the parties there can be found a
legally enforceable contract for the sale of the house in which Gibson resided
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What did the court do?


Applied “well settled and elementary principles of English law” [i.e. the “conventional
approach” to ascertaining whether there was a contract]:
1. looking at the handful of documents relied upon as constituting the contract; and
2. seeing whether upon their true construction there is a contractual offer by MCC & there
is acceptance by Gibson
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The key is the council’s letter
Dear Sir,

Purchase of council house


Your Reference Number 82463 03

I refer to your request for details of the cost of buying your council house. The corporation may be prepared to
sell the house to you at the purchase price of £2,725 less 20 per cent = £2,180 (freehold) …

Maximum mortgage the corporation may grant: £2,177 repayable over 20 years.
Annual fire insurance premium: £2.45 Monthly repayment charge, calculated by: (i) flat rate repayment method £19.02

If you wish to pay off some of the purchase price at the start and therefore require a mortgage for less than the
amount quoted above, the monthly instalment will change; in these circumstances, I will supply new figures on
request. The above repayment figures apply so long as the interest rate charged on home loans is 8.5 per cent. The
interest rate will be subject to variation by the corporation after giving not less than three months’ written
notice, and if it changes, there will be an adjustment to the monthly instalment payable. This letter should not be
regarded as firm offer of a mortgage.

If you would like to make formal application to buy your council house, please complete the enclosed application
form and return it to me as soon as possible .
Yours faithfully,

(Sgd)
H R PAGE
CITY TREASURER …
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Conclusions
Held: The words “may be prepared to sell” and “if you would like to make a
formal application to buy...” in MCC’s letter make it impossible to construe
this letter as a contractual offer. The letter and application form simply set
out the financial terms on which MCC may be prepared to consider a sale
and purchase in due course. Accordingly, there is no contract.
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Distinguishing an offer from other


conduct
When is something that looks like it might be an offer, not an offer?
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Why do we need to distinguish?


Disputes as to existence of agreement often turn on whether an offer
was made
Need to distinguish offer from:
• Mere puff (we saw this argument in Carlill v Carbolic Smokeball)
• Invitations to treat
• Supply of information
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Supply of information and Puff


• Supply of information: An offer can only exist if there is a firm promise to do or to
refrain from doing something. If there is no firm promise, there is no offer. So, if a
statement is only intended to supply information upon which some future dealing may
or may not be negotiated, that statement is not an offer and it cannot be made binding
by acceptance. The mere supplying of information, whether in response to a request or
otherwise, is not an offer to deal. Harvey v Facey [1893] AC 552

• Puff: Puff consists of all those statements which are made to induce contracts but are so
clearly far-fetched or exaggerated that no reasonable person would believe them to be
binding statements of fact on which they should rely. Although puff may induce a
contract, it is not binding on the party making them and does not give the other party
any grounds on which to seek a remedy. Mitchell v Valherie (2005) 93 SASR 76
RMIT Classification: Trusted

Offers versus Invitations to treat


Where one party invites another party to make an offer, or enter into
negotiations relating to a potential agreement that is an “invitation to treat”.
The question becomes:
Is A making an offer to B? or
Is A inviting B to make the offer?
An Invitation to Treat - is not an offer capable of being accepted such as to give
rise to a binding contract
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Offers versus Invitations to treat: continuted


• Advertisements: an advertisement is usually regarded as invitations to treat. This is especially so with those
advertising goods for sale, whether the advertisement is in a catalogue or circular published by the offeror. Grainger
& Son v Gough [1896] AC 325

• Displays of goods in Shops: the display of goods in a shop window with a price ticket attached was merely an
invitation to treat and not an offer for sale the acceptance of which constituted a contract. Fisher v Bell [1961] 1 QB
394

• Auctions: an auctioneer’s call for bids is only an invitation to treat. When the buyer makes a bid, it is an offer to buy at
that price. It is then up to the auctioneer to either accept or reject the bid on behalf of the principal. British Car
Auctions v Wright [1972] 1 WLR 1519 In auctions ”without reserve”, general rule applies (AGC (Advances) Ltd v
McWhirter (1977) 1 BPR 9454), but failure to sell to highest bidder may be breach of collateral contract (Ulbrick v
Laidlaw [1924] VLR 247)

• Tenders: an announcement calling for tenders is not usually regarded as an offer; it is normally an invitation to treat.
The offer comes from those submitting tenders and each such tender constitutes a separate offer to deal on its own
terms. Spencer v Harding (1870) LR 5 CP 561 If it has conditions attached to it a tender can be an ofer : Harvela
Investments Ltd v Royal Trust Co of Canada (CI) Ltd [1986] 1 AC 207
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The leading cases
Learning what an offer is by exploring what it is not….
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Carlill v Carbolic Smoke Ball  [1893] 1 QB 256


Facts:
Carbolic Smoke Ball Co (the defendants) - issued an advertisement in the
newspaper to promote its “smoke ball”. It “offered” to pay £100 pounds to
any person who contracted influenza after using it as prescribed.
Advertisement also stated that £1,000 deposited with its bank to show its
sincerity. Mrs. Carlill used the smoke ball in the correct manner but she
later caught influenza & sued the defendant for £100.
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The advertisement

“£100 reward will be paid by the


Carbolic Smoke Ball Company to any
person who contracts the increasing
epidemic influenza, colds, or any
disease caused by taking cold, after
having used the ball three times daily
for two weeks according to the
printed directions supplied with each
ball. £1000 is deposited with the
Alliance Bank, Regent Street, shewing
our sincerity in the matter …”
RMIT Classification: Trusted

Issues
1 Was there an indication by one person to another of his or her
willingness to enter into a contract with that person on certain terms
without further negotiation?
2 Was this an “offer” to contract or merely an “advertisement” or “mere
puff ”?
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The Mrs Carlill’s arguments The Carbolic Smoke Ball’s arguments

• The advertisement was clearly an offer to all • The advertisement was not an offer. The words
the public (the world at large) do not express a promise. No promise was
intended.
• As soon as Mrs Carlill did what the • The advertisement was a mere “puff” or boast
advertisement directed, she had a contract with and not meant to be legally binding.
Carbolic (i.e., she “accepted” the offer). • Mrs Carlill did not communicate her
acceptance of the offer.
• When she fell ill with the flu she was entitled to • No consideration moved from Mrs Carlill in
claim the £100 pursuant to the contract. exchange for Carbolic’s promise to pay £100.
• The advertisement is too vague (uncertain) (no
time limit for contracting the flu and being able to
claim the £100).
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Judgment
Held:
• You can make an offer to the entire world which “ripens” into a contract when
someone comes forward and performs the condition=unilateral offer
• Acceptance of a unilateral offer occurs by performing the condition
• Notification of acceptance can occur at the same time as performance
RMIT Classification: Trusted

Pharmaceutical Society of Great Britain v Boots Cash Chemists (Southern) [1953] 1 QB 401

Facts:
Boots operated a self-service store. One section displayed goods which could be
bought without the supervision of a pharmacist. Another section was under the control
of a pharmacist as required by the relevant legislation – the Pharmacy and Poisons Act
1933 (UK) which made it unlawful for a person to sell certain drugs unless the “sale is
effected by or under the supervision of a registered pharmacist”.
The pharmacist stood at the exit to the store (to “supervise the purchases”).
RMIT Classification: Trusted

Issues
• Has Boots breached the law?
• Was the display of goods an offer?
– when a customer picked up the drugs to which the legislation
applied, and put them in a basket (self-service in other
words) had he/she purchased the drugs? (contract
concluded?)
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The plaintiff’s arguments The Defendants Arguments

PSB argued that the drugs had been Boots argued that the legislation had not been
purchased/contract made, when customer put drugs contravened because only when a customer took
into basket = and as this was not supervised by a drugs to the cash register, was an offer made = here
registered pharmacist = therefore the legislation had the pharmacist supervised that part of the transaction
been contravened. and was authorized to prevent a customer from
purchasing drugs if he/she saw fit.
The sale was in other words “effected by or under the
supervision of a registered pharmacist” as the
legislation required.
RMIT Classification: Trusted

Judgment
• Held: The display of the goods was only an invitation to treat.
Customers ‘offered to buy’ when they took goods to the counter
and at that point Boots decided whether to accept their offers or
not. That part of each transaction formed the culmination of the
sale and it was supervised by a pharmacist.
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Responses and Consequences

What happens after the offer is made?


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Possible responses to an offer:


• Reject it terminates it (ends offer permanently)
• Make counter-offer (= new offer on new terms)  terminates original
offer (Hyde v Wrench)
• Ask for more information or clarification before making a final
decision whether to accept (Stevenson, Jaques & Co v McLean)
•  no effect on offer but offer will lapse within a reasonable time, if not
accepted before lapse
• Do nothing  offer lapses after reasonable time
• Accept the offer in its full terms  creates a valid (simple) contract
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Termination of Offer
• Lapse of time: An offer expressed to be open to acceptance for a particular period will lapse at the end of that period
Dickenson v Dodds. If no period is specified, the offer will lapse after a “reasonable period” Ramsgate Hotel Co Ltd v
Montefiore; Ballas v Theophilos (No 2). What is a “reasonable” period of time will depend on the circumstances of
the offer. Normally the death of offeree or offeror causes the offer to lapse: Fong v Cili and Bradbury v Morgan

• Failure of condition: if a condition is not satisfied, the offer is incapable of acceptance and is terminated.

• Rejection: rejection terminates an offer: Tinn v Hoffman & Co (1873) 29 LT 271. An offer that is terminated on
rejection cannot be revived.

• Counter-offer: Where a person purports to accept an offer, but introduces new terms not in the original offer, no
contract is made. The offeree, in effect, refuses the offer and makes a counter-offer. A counter-offer is a rejection of
the original offer ( Hyde v Wrench (1840) 3 Beav 334) and creates a new offer on materially different terms.

• Revocation of offer: Offer can be revoked any time before acceptance. Revocation effective only when actually
communicated to offeree: Byrne & Co v Leon Van Tienhoven & Co (1880) LR 5 CPD 344. Communication of
revocation may be made by reliable third party: Dickinson v Dodds (1876) LR 2 Ch D 463. Promise to hold offer open
for certain time is only binding if consideration is given (option): Goldsborough, Mort & Co Ltd v Quinn (1910) 10 CLR
674
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Goldsbrough Mort & Co v Quinn (1910) 10 CLR 674

• Facts: Quinn granted the company an option that an offer to sell his land would be
open for 1 week in consideration for 5 shillings received from Goldsbrough. Before
the week had expired and before the offer had been accepted, Quinn told the
company that he was withdrawing the offer. The company then wrote to Quinn
within the week, accepting the offer. The company sued for specific performance.
• Issue: was the offer revoked?
• Held: Agreeing to hold the offer open for 1 week for 5 shillings was an option and
binding on Quinn, because of the consideration paid for the promise. This prevented
revocation of the offer within the week. There was valid acceptance of the offer, so
there was a contract.
RMIT Classification: Trusted
Problems with unilateral contracts

• In the case of unilateral contracts, can an offer be revoked after offeree


commences, but before completes, performance?
• Yes, the normal rule that an offer can be revoked at any time prior to
acceptance stands. But the offeree may seek an an award of damages or
an injunction Mobil Oil Australia Ltd v Wellcome International Pty Ltd
(1998) 81 FCR 475
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Acceptance
Recognising Acceptance in the wild…
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What is Acceptance?
• An acceptance is an unqualified assent to the terms of an offer that is still open
• In bilateral contracts, acceptance is the making of a promise to the offeror
• In unilateral contracts, it is by performing the acts specified in the offer
• Acceptance is determined under the objective approach: Taylor v Johnson (1983) 151
CLR 422
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Some questions to be answered


• Who can accept an offer?
• What may be accepted?
• How may the offer be accepted?
• Can the acceptance be revoked?
• How do we determine whether there has been acceptance?
• Does acceptance need to result in actual meeting of the minds?
• What happens if an offeree accepts when mistaken about the terms of the offer?
• Correspondence between the offer and acceptance
RMIT Classification: Trusted

General Rules on Acceptance


1. Offer can only be accepted by persons to whom the offer is made: Carlill v Carbolic Smoke Ball Co [1893] 1 QB 256
2. Offeree must have knowledge of and act in response to the offer: R v Clarke (1927) 40 CLR 227
3. Acceptance must usually be communicated: Latec Finance Pty Ltd v Knight [1996] 2 NSWR 79, noting however that
there may be an effective acceptance by (a) the doing of an act without any communication; or (b) the offer may
expressly or impliedly provide for acceptance to be communicated in a particular way so that acceptance is deemed
communicated when that manner is adopted, whether or not actually received. Acceptance becomes effective when
communication is received by the offeror.
4. Silence cannot be stipulated as method of acceptance: Felthouse v Bindley (1862) 11 CB (NS) 869
5. Offeror may waive right to be notified: Carlill v Carbolic Smoke Ball [1893] 1 QB 256
6. Method of acceptance must be in accordance with method stipulated if it is stated to be the only method: George
Hudson Holdings Ltd v Rudder (1973) 128 CLR 387; If no method stipulated, equally prompt means is valid:
Quenerduaine v Cole (1883) 32 WR 185
7. Acceptance occurs when and where offeror receives or is deemed to receive acceptance: Byrne & Co v Van
Tienhoven (1880) LR 5 CPD 344
8. Acceptance may be inferred from conduct: Farmers’ Mercantile Union and Chaff Mills Ltd v Coade (1921) 30 CLR
113; On an objective test, conduct, including silence, may indicate acceptance. Empirnall Holdings Pty Ltd v
Machon Paull Partners Pty Ltd (1988) 14 NSWLR 523
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How to determine acceptance? Objective test approach


Court will ask whether a reasonable person would say that the parties intended to make an agreement.
Taylor v Johnson (1983) 151 CLR 422
’[T]he law is concerned, not with the real intentions of the parties, but with the outward manifestations
of those intentions.’
‘it is not the subjective beliefs or understandings of the parties about their rights & liabilities that govern
their contractual relations- what matters is what the party by words & conduct would have led a
reasonable person in the position of the other party to believe.’
“Would a reasonable person, having regard to their external manifestations of conduct, consider the
parties to have reached agreement?”
The objective approach adopted in Taylor v Johnson was confirmed by HCA in Toll Pty Ltd v
Alphapharm Pty Ltd (2004) 219 CLR 165
RMIT Classification: Trusted

Another Example: Silence (alone) as acceptance?


Acceptance cannot be inferred from silence alone: Felthouse v Bindley (1862) 11 CB
(NS) 869
However, acceptance can be inferred from silence coupled with other conduct: Empirnall
Holdings v Machon Paull (1988) 14 NSWLR 523
Test: whether a reasonable bystander would regard the conduct of the offeree including his
silence as signaling to the offeror that his offer has been accepted (objective test)
RMIT Classification: Trusted

Empirnall Holdings v Machon Paull (1988) 14 NSWLR 523


(1) EH engaged MP to do work
(2) MP agreed, but only on terms of attached document (= offer)
(3) Document never signed or returned
(4) MP did work, EH paid MP in accordance with document

Held: principle from Felthouse accepted: an offeror cannot set up a contract by stipulating
silence as a mode of acceptance, However, silence may indicate acceptance in some
circumstances. Apply “objective test” to determine whether there was assent to the
offer- view of “reasonable bystander”
EH did more than remain silent- it had taken the benefit of MP’s work – knowing terms
of MP’s offer. This constituted acceptance of MP’s offer. MP gave EH a reasonable
chance to reject the offer. Acceptance is a question of fact. “objective bystander” would
conclude EH had accepted the offer.
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Postal Acceptance Rule/Postal Rule


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Postal Acceptance Rule/Postal Rule


• Common law has long recognised the “postal rule” as an exception to
the general rule that acceptance takes effect when it is received by
offeror. Postal acceptance rule was established in Adams v Lindsell
(1818) 106 ER 250
• The postal rule holds that acceptance is effective (and the contract
therefore completed) as soon as it is posted.
• Acceptance occurs (and an agreement is made) when and where
it is posted
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Postal Acceptance Rule


The parties must contemplate acceptance by post Henthorn v Fraser [1892] 2 CL
27, 33 per Lord Herschell:
• “Where the circumstances are such that it must have been within the
contemplation of the parties that, according to the ordinary usages of
mankind, the post might be used as a means of communicating the
acceptance of an offer, the acceptance is complete as soon as it is
posted”
Contract is made when acceptance is posted, even if lost in the post: Household
Fire and Carriage Accident Insurance Co Ltd v Grant (1879) LR4 Ex D 216
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Reasons for and scope of Postal Rule


• One party must bear risk of acceptance being lost in the post
• Use of post has risks on both sides; common law places burden
on the offeror, cf civil law system and Vienna Convention
• Rejection of argument that post office is agent of parties
• Postal rule does not apply to instantaneous forms of
communication: Entores v Miles Far Eastern Corp [1955] QB 327
• General rule applies to telephone, telex and fax, but for telegrams,
postal rule applies
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Instantaneous v Non-instantaneous Communication


Non-instantaneous communications - Examples include postal mail, telegraph
• The postal rule applies (Adams v Lindsell)
• A contract is made when and where the acceptance is posted, even if it is
received some time later or lost in the post
Instantaneous communications - Examples include telephone, telex, fax,email
• General rule is that a contract is formed when acceptance is communicated to
the offeror; a contract is formed when and where the acceptance is received
RMIT Classification: Trusted
Examples for General Rule
• Telex [Note: the “telex” was the precursor to the fax machine]. Brinkibon Ltd v Stahag Stahl Und
Stahlwarenhandelsgesellschaft mbH [1983] 2 AC 34

– Lord Wilberforce- general rule is that a contract is formed when acceptance is communicated to offeror…therefore “appears
logical” that a contract should also be formed where acceptance is communicated to offeror
– But… “no universal rule can cover all such cases…must be resolved by reference to intentions of the parties, by sound business
practice …”
– However, if message sent or received through a third party, out of office hours or not intended to be read immediately,
general rule may not apply
• Faxes: Reese Bros Plastics Ltd v Hamon-Sobelco Australia Pty Ltd (1988) 5 BPR 11
– a fax which is sent through telephone lines from one machine to another, should be treated as a form of instantaneous
communication- i.e. governed by the general rule that an acceptance is effective only when & where received by the offeror
• Emails: Lo v Russell (No 2) [2017] VSCA 14
– Now clear in Victoria that email should be treated like other forms of instantaneous communication- that acceptance
is effective only when received. See also in Olivaylle Pty Ltd v Flottweg AG (No 4) (2009) 255 ALR 632. See
Electronic Transactions Act 2000 (Vic) ss 3 & 13 …ELECTRONIC TRANSACTIONS (VICTORIA) AMENDMENT ACT
2011 (NO. 52 OF 2011) - SECT 10-amending some sections of ETA 2000 – New sections 13, 13A and 13B inserted
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Where offer / acceptance can’t be clearly identified


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Agreement in the absence of identifiable offer and acceptance?

Agreement can exist in the absence of identifiable offer and acceptance. Brambles
Holdings v Bathurst City Council (2001) 53 NSWLR 153 Even though no offer
and acceptance was identified, parties’ conduct inferred mutual agreement
Look at all the circumstances:
Can agreement be inferred?
Has mutual assent manifested?
Would a reasonable person conclude a bargain?
RMIT Classification: Trusted
Strategy for determining the existence of an agreement

• Step 1: try and identify a distinct offer and acceptance in accordance with
the conventional approach.
• Step 2: if step 1 fails, apply the test from Brambles Holdings v Bathurst
City Council: looking at all the circumstances to see whether an
agreement be inferred, whether mutual assent has manifested and
whether there is a concluded bargain from a reasonable person’s view
(objective test)
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Summing up: Agreement


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Key issues: Agreement = offer + acceptance


• Difference between unilateral and bilateral contracts (don’t overthink this!)
• What constitutes “offer”?
• What is invitation to treat?
• When can offer be terminated?
• Effect of counter-offers.
• What constitutes “acceptance”? Communication?
• General rule and postal rule on acceptance and exceptions
• Is offer/acceptance analysis always applied? (Brambles)
RMIT Classification: Trusted

Summary: offer
An offer must be capable of ripening into an agreement by acceptance – accordingly
must convey both a willingness to be bound and the “price” or consideration which the
offeror seeks in return for the offer made.

Rules for determining whether an offer has been made – an offer:


• may be made to identified persons or to the whole world;
• Must be communicated to the offeree;
• Must include all the terms (i.e.. All terms must be communicated to the offeree before
acceptance)
• May stipulate how it can be accepted; and
• May lapse, be withdrawn or terminate at any time prior to acceptance

The key to determine the differences is a question of construction


RMIT Classification: Trusted

Summary: acceptance
Acceptance completes the formalities
Acceptance may constitute performance or be a promise to perform the acts required by the offer
An offeree cannot accept an offer of which they have no knowledge;
Acceptance must be communicated – EXCEPT:
• Where the offeror has dispensed with the requirement;
• In the case of a unilateral contract (Carlill)
• Where it’s the offeror’s fault that acceptance isn’t received
• Where the postal acceptance rule applies
Acceptance must be within the time period stipulated by the offer – or if no time, within a reasonable time;
Acceptance must be unconditional;
Acceptance must be given in the way required by the offer;
Unless the offeror consents – acceptance can’t be withdrawn;
Offers can only be accepted by the person to whom they are made;
Acceptance cannot be retrospective
RMIT Classification: Trusted

Other important points


In order to demonstrate that a contract exists, a plaintiff must prove that there is a
meeting of the minds / consensus ad idem
Whether there has been a meeting of the minds is determined objectively by reference
to surrounding circumstances
We sometimes need to identify when and where offer / acceptance occurred for
reasons other than simply to identify whether there is a contract – eg stamp duty,
choice of law etc
An offer needs to be capable of acceptance – this requires a level of certainty /
precision as to the terms. However, it does not necessarily require any document or
only one document.
RMIT Classification: Trusted

Other important points


In order to identify whether agreement has been reached a court will usually
assess whether a process of offer and acceptance culminating in agreement
was reached – but not in all cases. Generally a contract comes into
existence when an offer is accepted – but not always eg:
• Mutual assent inferred from conduct (Brambles)
• Unilateral offers / Offers of a reward / Options
• Contracts not made face to face (post / vending machines / tickets)
• Contracts made by tender
• Contracts where parties submit to rules (eg. Online auctions / companies)
• Exchange of documents containing agreed terms

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