Contract Law: Forming The Agreement (Acceptance)

Front 1

What must an acceptance do?

Back 1

Match the offer.

Front 2

What is a counter offer?

Back 2

The response to an offer, changing the terms.
A counter offer constitutes a rejection of the original offer, confirmed in Hyde v Wrench

Front 3

Hyde V Wrench 1840

Back 3

D offered to sell P a farm for £1000, P offered £900 for which D rejected.
P then tried to buy the farm at £1000 but P rejected again.
P's further offer to buy at £1000 constituted an offer for which D could accept or reject.

Front 4

Pars Technology Ltd v City Link Transport Holdings Ltd

Back 4

Two parties trying to settle an old dispute. A stated by letter to pay £13,500 plus carriage charges and vat on carriage charges of £7.55. B replied accepted by stating they would pay £13,507.55 plus vat.
A tried to claim there was no matching offer and acceptance however the courts needed to look at the whole correspondence objectively.
The court held that A's letter was accepted by B.

Front 5

Is a request for information considered a counter offer?

Back 5

Not generally as they are not requesting a change to the terms but attempting to clarify the way in which the contract will be performed and, in particular, whether a specific type of performance will be acceptable.

Front 6

Stevenson, Jacques & Co v McLean

Back 6

D wrote to P offering iron at a certain price and the offer would remain open until monday.
P sent a telegram on Monday inquiring as to payment.
P then sent a further telegram accepting D's offer.
D had already sold the iron elsewhere.
D tried to argue that Ps communication was a counter offer but the courts held it was just a request for information.

Front 7

When might a contract be formed in a battle of forms (3 possibilities)?

Back 7

1) The contract is made on the terms of the party whose form was put forward first. (may apply when the second set of terms are so different to the original and, it would be unfair unless the party has specifically drawn attention to the new terms)
2) The contract is made on the terms of the party whose form was put forward last - the 'last shot' approach. (may apply where the last terms were not objected to by the first party)
3) There is no contract at all, as the parties are not in agreement, and there is no matching offer and acceptance. (strict offer and acceptance principle)

Front 8

Butler Machine Tool Co Ltd v Ex-Cell-O-Corp 1979

Back 8

A offered to sell machine to B including a price variation clause. B replied with new terms excluding variation clause and attached a return slip for sellers to sign accepting the new terms.
Trial judge held in favour of the sellers however on appeal this was overturned and the tear off slip amounted to a fresh offer rejecting the original offer which the sellers had signed and returned.

Front 9

Trentham Ltd v Archital Luxfer 1993

Back 9

Trentham were main contractors on a building contract. Archital were sub-contracted to supply windows and doors for which they did and were paid for.
Trentham then tried to recover money for fine caused by delay.
Archital refused to pay as stated there was no matching offer and acceptance.
The court held that acceptance by conduct was enough.
Two important issues; potential retrospective effect of a contract and contracts do not necessarily have to be formed by means of a matching offer and acceptance.

Front 10

RTS Flexible Systems Ltd v Molkerei Alois Muller GMBH & Company KG

Back 10

No formal contract ever written despite this being clear in the terms that no contract will form until then.
Supreme Court held looking at the overall communications and actions of the parties there was a contract and the requirement to have a written contract had been waved.

Front 11

Tekdata Interconnections Ltd v Amphenol

Back 11

Companies had been business partners for 20 years.
Used to trading on the buyers terms.
Sellers introduced new terms upon acceptance (later held to be a counter offer which was accepted by conduct of the buyers).