Law of contract 2.docx - 1 Law of Contract 2 Offer must be distinguished from an ‘invitation to treat’ An offer which is a definite undertaking or

Law of contract 2.docx - 1 Law of Contract 2 Offer must be...

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1 Law of Contract: 2 Offer must be distinguished from an ‘invitation to treat’ An offer, which is a definite undertaking or promise, must be distinguished from an “invitation to treat”. An invitation to treat is an invitation to interested parties to come forward and make an offer. It is an indication of a person’s willingness to negotiate or receive offers. Examples of invitations to treat can often be found in circulars. catalogues, classified advertisements and goods on display in a shop or in a shop window . Pharmaceutical Society of Great Britain v Boots Cash Chemists (Southern) Ltd [1953] 1 QB 401 Rules as to Acceptance Acceptance must be unconditional If acceptance is made on condition of something or some event, then there is no acceptance . For example, if a person responds to an offer to buy their car for $1000 with “I’ll only accept if you make the price $1200”, no acceptance has been made. A counter-offer may be deemed to have been made which only results in an agreement if it is in turn accepted. Acceptance must be by the person to whom the offer is made and may be by words or conduct Acceptance must be made by the offeree (or their agent) and made by via expressed (words spoken or written) or implied (such as by conduct) means. Generally silence (that is, a lack of response to an offer) alone will not amount to acceptance. For example, Alan offers to buy some property of Bob’s and then adds “if I don't hear from you, I’ll regard my offer as accepted”. Bob does not respond. Bob’s lack of response does not amount to acceptance. Felthouse v Bindley (1862) 11 CBNS 869; 142 ER 1037 Acceptance must be communicated to offeror unless need is waived There must generally be communication of acceptance unless the offeror dispenses with this requirement. . Further, there is usually an implied waiver where an offer is made to the world at large (such as in Carlill v Carbolic Smoke Ball Co ). In responding to a reward offer, a person accepts through the performance of the terms of the reward offer, and so prior communication of acceptance is not required. Acceptance must be in response to offer This acceptance rule corresponds to the rule that an offer must be communicated. A person purporting to accept an offer must be aware at the time that it exists . For example, an offer made to anyone who could swim ashore from a river ferry is not accepted by someone who accidentally falls overboard, swims ashore and later learns of the offer. Acceptance must comply with prescribed method There must be compliance with prescribed method of acceptance. That is, if offeror prescribes a certain method or means of acceptance (e.g. delivery of written notice to a certain address) then acceptance will
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2 only be valid if in compliance with such method. However, if no method of acceptance has been prescribed by offeror as only one suitable, then the courts will look at the circumstances and some other equally expeditious and advantageous (to the offeror) mode may also be effective.
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