Contract Law - Lecture 6 Problems in Offer and Acceptance Offer - indication someone is willing to contract with the other on certain terms Acceptance - final assent to all the terms of an offer The Postal Rule " Where parties to a contract are in close proximity it is easy to figure out they have agreed on the same terms - easier to decifer " If parties communicate through post, there is an interval from where an offer is made and when it is accepted " Offeror might make offer and change mind before offer is accepted " Where post is means of sending acceptance it becomes valid and binding the second it is posted · When is a posted acceptance effective? o Adams v Lindsell (1818) - effective on posting " A offered to sell certain specified goods to B via letter Received an answer by return of post, the letter was misdirected " Answer notifying the acceptance of the offer arrived 2 days later than it should have " On the day following when it would have arrived if the original letter had been properly directed, A sold the goods to a third person " Courts decided there was a contract binding the parties, from the moment offer was accepted " Found B was entitled to recover against A, in an action for not completing the contract o Arguments based on business efficiency " Applies even if letter never delivered - Household Fire Insurance v Grant (1879) - Limitations on the Postal Rule " The rule only applies to acceptance of offers. It does not apply to making offers, revocation of offers, or any other elements in contractual negotiations. " Must be reasonable to use the post - Henthorn v Fraser (1892) " If offer was made by telephone it wouldny be reasonable to reply by post o Lord Herschell - 'it must have been within the reasonable contemplation of the parties that, according to the ordinary usages of mankind, the post might be used as a means of communicating the acceptance of an offer' " Offeror may exclude the rule -Quenerduaine v Cole (1883) held speed of communication of offer is relevant; Holwell Securities v Hughes (1974)- stating 'notice in writing' means actual communication was required - if offeror indicates he or she required notice in writing - means offeror requires actual communication therefore postal rule doesn't reply - offeror needs to see communication before they are bound Acceptance in Bilateral Contracts " Offer can be accepted at any point until it is revokedffiwithdrawn
" RevocationffiWithdrawal can be: o Communication - Including by 3rd party - Dickinson v Dodds o A counter-offer o A second offer o Lapse of specified time o Lapse of 'reasonable time' Revocation of Offers in Bilateral Contracts " An offer can be revoked at any point before it is accepted- Payne v Cave (1789) 3 Term Rep 148 · Provides principle offeror can revoke their offer at any time before acceptance