LAW2101 Lecture Notes - Peter Gibson, Hughes Aircraft Company, Natural Person
LAW2101 CONTRACT A - CASE SUMMARIES AND KEY POINTS
TOPIC 1: OFFER
Offer is an indication by one person to another of his or her willingness to enter into a contract with that
other person on certain terms
TYPES OF CONTRACT
Unilateral Contract
Bilateral Contract
Multilateral Contract
• 2 parties to the contract (i.e. A
and B)
• Only 1 promise is made (e.g. A
promises to pay $100 to B if B
fids As lost pupp
• B accepts As offe he B
performs the stipulated task
(i.e. contract is formed when
B completes performance)
• B is not obliged to perform,
but A is obliged to pay when B
has performed (i.e. only one
party has an obligation)
*Note: Revocation possible whilst
B is completing the agreement
• 2 parties to the contract (i.e. A
and B)
• Both parties exchange a
promise/promises for each to
do something in the future
(e.g. sale of second hand book
under the agreement)
• Both A ad Bs poises ae
executory (i.e. to be
performed at some point after
the contract is formed)
• Contract between more than
two parties.
• Most features of bilateral
contracts apply, though there
could be other special
features as well
Case
Findings
Gibson v Manchester Council
• Manchester CC wrote to Gibson:
o The opoatio a e pepaed to sell
the house to ou fo £7 less %
o This lette should not be regarded as a firm
offe of a otgage
o if ou ould like to ake foal appliatio
… please oplete the elosed appliatio
fo
• Gibson completed the application form and
returned the form to the Council
• Change of government election (i.e. new local
council stopped all proposed sales)
• Gibson sought to enforce the sale (by specific
performance)
➢ Approach (Denning) (Court of Appeal - 2:1 for
Gibson):look at the oespodee as a hole
and at the conduct of the parties and see
therefrom whether the parties have come to
ageeet o eethig that as ateial –
Departed from conventional approach of offer
and acceptance
➢ Approach (Lord Diplock) (House of Lords –
Unanimous for Council): No reason here to
depart from conventional approach of
construing the documents to identify a clear
offer and acceptance, but acknowledges the
possibility of departing in exceptional types of
contracts that do not fit easily into the normal
analysis of offer and acceptance
❖ a e pepaed to sell ad euest fo
foal appliatio: Fatal and make it
impossible to construe letter as a firm
contractual offer
*Note: Look at all the facts – In Storer agreement
existed due to it going further
Carlill v Carbolic Smoke Ball
• £100 reward will be paid by the Carbolic Smoke
Ball Co to a peso ho otats … iflueza,
olds … afte haig used the all thee ties
daily for two weeks according to the printed
directions supplied
Would a reasonale person in the offeree’s position
view that an offer was intended and would be
binding upon agreement?
➢ Offer existed:
❖ Advert was not a promise/offer (i.e. Was a
mere puff – they did not intend to be
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LAW2101 CONTRACT A - CASE SUMMARIES AND KEY POINTS
• During the last epidemic of influenza many
smoke balls were sold and in no case was the
disease contracted by those using the balls
• £1000 is deposited with the Alliance Bank,
Regent St, showing our sincerity in the matter
• Carlill used the smoke ball as directed and
contracted the flu
• Carlil Claimed for the £100, but Carbolic
Smokeball Co refused to pay and argued that
there was no contract
o Offer: Refer to findings
o Intention: No intention to be legally bound
o Acceptance: Refer to findings
o Consideration: Refer to findings
o Certainty: Offer terms (i.e. the advert) too
vague and open ended
bound): Clearly an offer and not a puff due
to the deposit to Alliance Bank
❖ Too vague: Advert was not too vague
❖ No time limit: Time limit would be by
reference to a reasonable time or during use
❖ No means of checking or monitoring use
❖ No offer can be made to the world at large:
Possible to make offer to the public at large
➢ Acceptance existed: Carlill did not communicate
acceptance: Accepted by performance
➢ Consideration existed: No consideration moved
from Carlill: Use of smoke ball constituted
benefit to D and detriment to P
MacRobertson Miller Airline Services v
Commissioner of State Tax (WA)
• MMs patie as to fist uote the fae ad
availability of seats and then to issue a ticket in
return for the fare
• Ticket contained conditions giving MM the right
to cancel a flight or a booking without incurring
any liability
➢ HCA Finding (Unanimous): Ticket did not record
the terms of an agreement, but rather the terms
of an offer which was subsequently accepted by
conduct
➢ Approach (Barwick CJ):
❖ Sweeping exemption left no room for
obligation to carry the passenger
❖ Passenger makes the offer by presenting at
the airport, and airline accepts by carrying
(i.e. ticket is an invitation to treat)
➢ Approach (Stephen J): Ticket constitutes an offer
by the airline capable of acceptance or rejection
by the passenger when he/she has had
reasonable opportunity to read the condition
(i.e. ticket only records terms of an offer)
➢ Approach (Jacobs J) – Obiter: When the person
who purchases the ticket is not the customer,
there will be 2 contracts
❖ Executory agreement between purchaser of
ticket and airline
❖ Issue of ticket will constitute offer made to
passenger which passenger can accept by
presenting themself for travel
OFFERS DISTINGUISHED FROM INVITATIONS TO TREAT
Shop sales
Case
Findings
Pharmaceutical Society of Great Britain v Boots
Cash Chemist Ltd
• Boots operated a self service shop
• Items on shelve that required the supervision of
Pharmacists before sale
• Pharmacist at cash register
➢ Goods on shelves cannot be considered an
offer: Customers are entitled to return/exchange
product they have selected back onto shelf –
Customer makes offer to purchase at register
Statute
Interpretation
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Document Summary
Offer is an indication by one person to another of his or her willingness to enter into a contract with that. B completes performance: b is not obliged to perform, but a is obliged to pay when b has performed (i. e. only one party has an obligation) Carlill v carbolic smoke ball: 100 reward will be paid by the carbolic smoke. Ball co to a(cid:374)(cid:455) pe(cid:396)so(cid:374) (cid:449)ho (cid:272)o(cid:374)t(cid:396)a(cid:272)ts i(cid:374)flue(cid:374)za, (cid:272)olds afte(cid:396) ha(cid:448)i(cid:374)g used the (cid:271)all th(cid:396)ee ti(cid:373)es daily for two weeks according to the printed directions supplied. Approach (denning) (court of appeal - 2:1 for. Gibson):(cid:862)look at the (cid:272)o(cid:396)(cid:396)espo(cid:374)de(cid:374)(cid:272)e as a (cid:449)hole and at the conduct of the parties and see therefrom whether the parties have come to ag(cid:396)ee(cid:373)e(cid:374)t o(cid:374) e(cid:448)e(cid:396)(cid:455)thi(cid:374)g that (cid:449)as (cid:373)ate(cid:396)ial(cid:863) . Departed from conventional approach of offer and acceptance. Approach (lord diplock) (house of lords .
