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BUSINESS LAW – KEY ELEMENTS (lecture 1 & 2)
A contract is “an agreement giving rise to obligations which are enforced or recognised by law
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Essential elements: Agreement- offer and acceptance; ICLR and
consideration, capacity to contract, compliance with formalities where applicable, absence of vitiating factors
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An offer is: “expression of willingness to
contract on specified terms made with the intention that it is to become legally binding as soon as it is accepted by the person to whom it is addressed”
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, he so conducts himself that a reasonable man would believe that he was assenting…, and that other
party upon that belief enters into the contract
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The test for agreement is the meeting of minds, which is assessed objectively by the cts
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specified terms – must be clear and
concise – Gurthing v Lynn
2
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3
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cf Storer v
Manchester CC (it was held to be a
clear and certain offer)
What is not an offer?
 
Invitations to treat are not offers
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Advertisements (Partridge v
Crittenden)
NB EXCEPTION Grainger v Gough
– rule doesn’t apply if person is a
manufacturer, as could create more
stock
2
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NB EXCEPTION: Unilateral offers
(made to the world)
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See: Carlill v Carbolic Smoke Ball;
Bowerman v ABTA
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In
Lefkowitz v Great Minneapolis
Surplus it was limited
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Invitations to tender – where a
person seeking to have work carried
out invites people to submit
conditions
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BUT NOTE: Blackpool & Flyde
Aero Club v Blackpool BC – was
held to be an offer as the parties were
invited and there were strict
conditions re offers; Harvela
Investments Ltd v Royal trust Co
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4
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BUT NOTE: Barry v Davies re
auctions with reserves
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Share prospectuses – ITT
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Communication of an
offer can be in writing,
orally and conduct to the
offeree – Taylor v Laird;
Bloom v American Swiss
Watch Co
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Termination by:
1
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Battle of the forms –
Butler Machine Tool v
Ex-Cell-O (ct looks at all
docs to decide)
NB A counter-offer must
be distinguished from a
mere request for
information – Stevenson
Jacques v McLean
2
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Anytime
before acceptance (Payne
v Cave), but for it to be
valid it must be
communicated (Byrne v
Van Tienhoven)
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It can
be communicated by a 3rd
party – Dickinson v
Dodds
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Anytime
before complete
performance(GNR v
Witham), but note
Errington v Errington &
Woods
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3
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What is acceptance?
– unconditional
agreement to all the
terms of the offer
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Must be a mirror
image – Hyde v
Wrench
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2
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“If I don’t
hear anymore from you
I’ll consider the horse
mine” NB Silence
cannot be acceptance
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3
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4
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Postal Rule
To be able to rely on postal rule:
1
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It has to be put in post box
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Lost or damaged (still valid) – Household Fire and
Carriage Accident Insurance Co v Grant
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Misaddressed? Depends on why it has been
misaddressed
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EXCEPTIONS:
1
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2
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3
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It was clear that acceptance not
via post then not valid
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second thoughts can be too late -Byrne v Van
Tienhoven
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2
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5
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3
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Moot point in English law
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Unilateral Offers –
Carlill v Carbolic
Smoke Ball
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Actual communication is required – Entores v Miles
Far East – receipt rule
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2
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Offeror didn’t have ink
in fax machine so
didn’t receive fax from
offeree
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3
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It is
valid when acceptance
is put in post box
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Postal rule does not
apply t emails – see
Electronic Commerce
(EC Directive)
Regulations 2002
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Taken to have been received within office hours –
The Brimnes
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Outside office hours? Mondial shipping v Astarte
shipping
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Be explicit and equally efficacious method will
suffice eg “By fax only” – Manchester Diocesan
Council for Education v Commercial & general
investments
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If none prescribed –Tinn v Hoffman & Co
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3
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Websites=  ITT

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