LLB 120 Lecture Notes - Lecture 3: Mobil, Goldsbrough Mort & Co, Contract

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31 May 2018

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Week 3: 67-73

Termination of an Offer

An offer will cease to be available for acceptance when it is withdrawn by the offeror, lapses

or is rejected by the offeree

Withdrawal – General Rule

An offer may be revoked at any time before it is accepted. A promise to hold an offer open

fo a speified peiod is’t idig uless the offeee has give osideatio fo that

promise

The offeo a evoke the offe efoe the speified tie peiod, povided the offe has’t

been accepted in the meantime

The withdrawal of an offer is only effective when communicated to the offeree. No

exception is made for a withdrawal sent by post

Options

An option is an agreement between an option holder and a grantor under which the option

holder is entitled to enter into a contract with the grantor on specified terms, either at a

specified time or within a specified period. The option holder is then free to choose whether

to exercise the option at that time or within that period

See Goldsbrough Mort & Co Ltd v Quinn, pg 68

Lapse

An offer which is available for acceptance for a particular period of time will lapse at the end

of that period

If no period is stipulated, the offer will lapse after a reasonable time has passed – this can

be after a reasonable time has passed or the out a ife a ejetio fo the offeee’s

failure to accept within a reasonable time

See Bartolo v Hancock, pg 69

Failure of condition and changed circumstances

An offer may be made subject to an express or implied condition that must be fulfilled

before the offer can be accepted. Or, it may be made subject to an express or implied

condition that it should lapse upon the happening of a certain event

See Financings v Stimson, pg 69 and 70

Rejection and counter offer

Once an offer has been rejected, it is no longer available for acceptance. It may, however,

later be revived or may form the basis of an agreement

The making of a counter offer is treated as rejection of the original offer

By euestig ifoatio, the offeo is’t itedig to ejet the offer but to obtain

guidance. Important to ascertain intentions in determining if an agreement has been made

Unilateral contract

• No difficulty in withdrawing the offer before the offeree begins to perform

• Difficulty arises when the offeree has begun to pefo ut has’t opleted the

acts

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Document Summary

An offer will cease to be available for acceptance when it is withdrawn by the offeror, lapses or is rejected by the offeree. An offer may be revoked at any time before it is accepted. A promise to hold an offer open fo(cid:396) a spe(cid:272)ified pe(cid:396)iod is(cid:374)"t (cid:271)i(cid:374)di(cid:374)g u(cid:374)less the offe(cid:396)ee has give(cid:374) (cid:272)o(cid:374)side(cid:396)atio(cid:374) fo(cid:396) that promise. The offe(cid:396)o(cid:396) (cid:272)a(cid:374) (cid:396)evoke the offe(cid:396) (cid:271)efo(cid:396)e the spe(cid:272)ified ti(cid:373)e pe(cid:396)iod, p(cid:396)ovided the offe(cid:396) has(cid:374)"t been accepted in the meantime. The withdrawal of an offer is only effective when communicated to the offeree. No exception is made for a withdrawal sent by post. The option holder is then free to choose whether to exercise the option at that time or within that period. See goldsbrough mort & co ltd v quinn, pg 68. An offer which is available for acceptance for a particular period of time will lapse at the end of that period.

Related Questions

1. An offer is a proposal by an offeror that, if accepted, will create a contract. Offers require that the offeror make a promise. The promise can be express or implied. The offer must bargain for a return promise, an act, or forbearance, and it must describe what is being offered (the subject matter) with enough certainty so that a court will not have to guess at what the offeror intended. The offer must be communicated to the offeree, and it must be proven that the offeror manifested the intent to make an offer. How would an offeree prove that an offeror intended to make an offer if the offeror alleged that she was only kidding or that her proposal was merely an invitation to the other party to make an offer?

2. Offerors have the legal right to revoke their offers if they effectively do so before the offeree accepts. There are, however, several circumstances that would preclude the offeror from revoking the offer. Please identify these circumstances and give an example of each.

1.(Please Note: There may be more than one correct answer)

If Peggy says to Larry, "I'll give you $50 if you stand on your head for one hour":

	a.	Larry must verbalize his assent in order to render effective acceptance.
	b.	The statement can form the basis for a unilateral contract.
	c.	Larry must stand on his head to accept Peggy's offer.
	d.	Peggy and Larry have created a contigent cont

2. An acceptance is effective as soon as it is dispatched if the offeree uses:

	a.	any reasonable means of communication.
	b.	only a stipulated means of communication.
	c.	only an authorized means of communication.
	d.	an authorized as well as the stipulated means of communication.

3.Under the UCC, an order requesting "prompt" shipment of goods:

	a.	impliedly invites acceptance only by a prompt promise to ship.
	b.	invites acceptance by either a prompt promise to ship or by prompt shipment of goods.
	c.	requires acceptance via writing within a "reasonable" time frame.
	d.	impliedly invites acceptance only by a prompt shipment of goods.

4. (Please Note: There may be more than one correct answer)

On February 21, 2012, Stateville College President Erhlich sent a letter to Lt Governor Alfred E. Neuman asking Neuman to speak at theStateville College commencement on the topic "Do Brains and Politics Mix?" On February 24, Neuman responded in a fax, "I'll speak if you will pay a $50,000 speaking fee." On February 25, President Erhlich heard Neuman say something unintelligent on the morning news program and sent an email to Neuman which said "I revoke my offer for you to speak at commencement." Ten minutes later, Neumanchecked his email on his smartphone, and five minutes after that Neuman called Erhlich and said, "I've changed my mind. I accept your offer and I'll be glad to speak for free." Which of the following is a correct statement of the law?

	a.	Neuman's fax was a counter-offer which terminated Ehrlich's offer.
	b.	If Neuman's February 24 fax can be viewed as an inquiry rather than a counter-offer, and Ehrlich had received Neuman's call before Neuman received Ehrlich's email, Ehrlich would have been bound to a contract with Neuman despite his attempt to revoke because his revocation would only have been efffective when received by Neuman.
	c.	Under these circumstances, Ehrlich had no right to revoke his offer at any time before receiving Neuman's call.
	d.	Even if Neuman had phoned to accept before reading Erhlich's email, no contract would have formed because the February 25 email was not effective to revoke the offer made on February 21.

5. Browse wrap agreements are:

	a.	in paper form.
	b.	viewed by some courts as voidable.
	c.	per se illegal.
	d.	viewed by some courts as illegal.

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LLB 120 Lecture Notes - Lecture 3: Mobil, Goldsbrough Mort & Co, Contract

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