Offer and Acceptance Problem Question Structure

Offer and acceptance problem questions can be tricky to structure as there will often be multiple parties and multiple things going on at once. For this reason, it is advisable to separate out the parties and discuss them individually. For example, if you have one party who has made an offer and multiple other parties who have responded to the offer, your answer should discuss whether there has been a valid offer and acceptance between the original offeror and each offeree. This may not seem to make much sense as it would usually be impossible for the offeror to contract with all the parties as there will only be one product or service available. Despite that, you must discuss whether offer and acceptance is present for each and every individual in the problem question scenario.

In practice, the offeror would only be able to successfully perform the contract with one party. This means they would be in breach of contract with all the other parties. But that doesn't matter for your purposes - your task is to determine whether offer and acceptance can be established for each party.

The steps you must follow when writing a first class offer and acceptance problem question essay are set out below.

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Step 1: Offer or invitation to treat?

The courts have an objective approach: would the reasonable man believe that the offeror intended to be bound by his words? If so, an offer has been made. If not, it is a mere invitation to treat: a statement inviting offers which can then be accepted or rejected.

Gibson v Manchester City Council – stating that the party ‘may be prepared to sell’ was insufficiently certain to be an offer.

C.f. Storer v Manchester City Council – all the terms of the contract of sale had been agreed.

Unilateral offer

Party A promises to do something for party B on the condition that party B does something first. Party B is not obliged to do the act, but if they do, A must fulfil their promise.

Carlill v Carbolic Smoke Ball – £1000 deposited in bank showing the sincerity of the unilateral offer.

Can be revoked up until the point of performance, per Errington v Errington and Woods.

Communication of revocation: Shuey v US – by same or more efficient means.

No need to communicate acceptance, per Carlill.

These are invitations to treat, not offers, per Partridge v Crittenden.

Exception 1: when a reward is offered for the performance of a specific act, per Carlill.

Exception 2: the wording of the advert suggests the party wishes to be bound, e.g. ‘first come, first served’ – Lefkowitz v Great Minneapolis Surplus Store.

Shop displays

Shop displays are invitations to treat, per Pharmaceutical Society of Great Britain v Boots Cash Chemists.

Shop windows

Shop window displays are invitations to treat, per Fisher v Bell.

Tenders

Generally invitations to treat, not offers, per Spencer v Harding.

Exception: will be an offer if the party expressly undertakes to accept highest or lowest bid, per Harvela Investments Ltd v Royal Trust Co of Canada – also, referential bids are invalid.

Bingham LJ in Blackpool and Fylde Aero Club v Blackpool BC – bids that conform to the requirements of the tender must be ‘opened and considered’.

Statements of price

Mere statements of price that infer no intention to be bound by an acceptance will not be an offer, per Harvey v Facey – telegram stating ‘Lowest price for Bumper Hall Pen £900’ was not an offer.

Auctions

Usually a request for bids is an invitation to treat, each bid constitutes an offer, and acceptance occurs when the hammer falls, per British Car Auctions v Wright; s 57(2) of the Sale of Goods Act 1979.

Advertisement isn’t promise that auction will go ahead, per Harris v Nickerson.

An auction without reserve is a promise to sell to the highest bidder, per Barry v Davies.

Step 2: Communication of offers

According to Taylor v Laird, an offer must have been communicated to the offeree in order to have a valid agreement. Can be done in one of three ways: (1) orally, (2) in writing, (3) by conduct.

Step 3: Revocation of offers

Offers can be revoked up until the point of acceptance, per Routledge v Grant.

Revocation may take place by:

lapse of time: Ramsgate Victoria Hotel v Montefiore;
failure of a condition subject to which the offer was made: Financings Ltd v Stimson;
lock out agreement: Pitt v PHH Asset Management;
death of offeror – can still be accepted unless the offeree knows about the death: Bradberry v Morgan. Death of offeree – personal representatives cannot accept: Reynolds v Atherton; or
counter offer: Hyde v Wrench, however mere requests for information are not counter offers, so the original offer will stand: Stevenson v McLean.

Step 4: Acceptance

Acceptance must be mirror image of offer: Hyde v Wrench.

Two cross-offers do not constitute acceptance: Tinn v Hoffman.

Step 5: Communication of acceptance

Offeree must have objectively accepted the offer: Hartog v Shields.
Silence cannot constitute acceptance: Felthouse v Bindley, but obiter in Re Selectmove indicates that offeree could say his silence is acceptance and that would be binding.
Instantaneous communication sent out of office hours will be valid acceptance at the time sent if sent within office hours, or will be valid when office opens again if sent outside of office hours: Brinkibon v Stahag Stahl (telex case), obiter indications in Thomas v BPE Solicitors suggest that this would apply to email.
Unilateral offers do not require acceptance to be communicated: Carlill v Carbolic Smoke Ball.
Acceptance by post will occur at the time the letter is posted: Adams v Lindsell. Postal rule does not apply to offers: Henthorn v Fraser. Does not matter if letter never gets to offeror, still valid acceptance at the time the letter was posted: Holwell Securities v Hughes. If wrongly addressed, then acceptance is only valid when the letter arrives: Getreide v Contimar. Postal rule will not apply if offeror requires actual receipt of the acceptance: Holwell Securities v Hughes.
If the offeror specifies the method of acceptance they want the offeree to use, then the offeree can only accept using that method OR an equally expeditious method: Manchester Diocesan Council for Education v Commercial & General Investments, however the offeree must only use the method specified (and no other) if the offeror states that method will be the only method accepted.
If the offeror and offeree have conflicting standard form contracts, then usually each communication is considered a counter offer and the contract is only formed when the ‘last of the forms is sent and received without objection being taken to it’, per Lord Denning in Butler Machine Tool v Ex-Cell-O.

Hopefully this article cleared up any confusion you might have on writing essays for offer and acceptance problem questions. Please feel free to leave a comment if there's anything you'd like clarifying!

Disclaimer:

The information provided in this blog post is based on the research I carried out for my law degree which I completed in 2020. I accept no responsibility for errors or omissions. Legal principles and interpretations may change over time, and the content presented here may not reflect the most current developments in UK contract law. This information is intended for general informational purposes only and should not be considered as legal advice or relied upon as a substitute for professional legal counsel. For the most up-to-date and accurate legal information or advice, it is advisable to consult with a qualified legal professional who is knowledgeable about the latest legal developments and can provide guidance specific to your situation.