Formation of a contract


1. Intention to create legal obligations: Rose, Frank and Co. v. Crampton Bros. 1932; Jones v. Vernons Pools 1938; Edwards v. Skyways 1964
Domestic agreements:
Balfour v. Balfour 1919; Jones v. Paddawatton 1969; Merritt v. Merritt 1970; Parker v. Clark 1960; Wakeham v. Mackenzie 1968

2. Offer
a) The offer must be firm:
Carlill v. Carbolic Smoke Ball Co. 1893; Pharmaceutical Society of Great Britain v. Boots 1953
A mere invitation to treat is not an offer:
Auctions:
British Car Auctions v. Wright 1972; Payne v. Cave 1789
Shopwindows:
Fisher v. Bell 1960; Newspaper ad: Partridge v. Critenden 1968
b) The offer may be made to a particular person or to the world at large. If it is adressed to one person, only that person can accept it:
Boulton v. Jones 1857;Contrast: Carlill v. Carbolic Smoke Ball Co. 1893
c) The offer must be communicated.
d) Unless there is a subsidiary binding agreement, the offer may be revoked anytime before acceptance, even if there is a deadline:
Dickinson v. Dodds 1876. That is because there is no consideration for the offer.
Revocation must be communicated:
Byrne & Co. v. Leon van Tienhoven & Co. 1880
e) The death of either party creates an automatic lapse. If there is a time-limit for the acceptance, the offer ends at that time.
f) Counter offer ends the offer:
Hyde v. Wrech 1840
g) The offer must be clear and unequivocal:
Courtney and Fairbairn Ltd. v. Tolaini Bros. (Hotels) Ltd. 1975; Harvey v. Facey 1893; Sweet and Maxwell Ltd. v. Universal News Services Ltd. 1964; Bigg v. Boyd Gibbins Ltd. 1971

3. Acceptance
a) Acceptance must be made in reasonable time:
Ramsgate Victoria Hotel Co. Ltd. v. Montefiore 1866
b) The acceptor must - save the case of a unilateral contract - know of the offer at the time when he accepts.
Acceptance must be communicated:
Felthouse v. Bindley 1862
Communication must be made in the manner requested by the offeror:
Eliason v. Hemshaw 1819 (US)
c) Interpretation of the offer - falsa demonstratio non nocet:
Webster v. Cecil 1861
d) Reception of unsolicited goods: The Unsolicited Goods and Services Act 1971 provides that they are to be considered an unconditional gift (if the receiver has no reasonable cause to believe that they were sent with a view to his acquiring them for business purposes), upon certain conditions (six months without the sender's taking possession in them etc.).
e) Time of acceptance: when the letter is posted:
Adams v. Lindsell 1818; Hentern v. Fraser 1892
If it is stipulated that acceptance must be communicated in order to be effective mere posting will not be enough.
f) Place of the conclusion of the contract is where the acceptance is made:
Entores v. Miles Far East Corporation 1955; Brinkibon Ltd. v. Stahag Stahl und Stahlwarenhander GmbH 1983
g) Auctions: offer = highest bid; acceptance = fall of the hammer (SGA 1979).