b.law accpt.cases

8/2/2019 b.law Accpt.cases

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ACCEPTANCECASEs

{businesslaw}

PRESENTED BY:-Group : 04


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Composition Of An AgreementAn agreement is: generally characterised by an OFFER by one

party and an ACCEPTANCE by another


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Has An OfferBeenMade?

Facts:

Smith owns an organic farm.

Jones wants to buy Smiths farm.

Jones emails Smith asking: Will you sell me your farm? Let meknow your lowest price.

Smith emails back saying: The lowest price for my farm is$350,000.

Jones then responds by saying: I agree to buy your farm for thesum of $350,000 asked by you.


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WhatAreTheLegalIssues?

ISSUE:

Did one party (the offeror) make an offer?

Did the other party (the offeree) acceptthat

offer?


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Case:1

Heathcote Ball v Barry[2000] EWCA

Civ 235 (Auctions) The claimant had submitted the highest (and

only) bids at an auction stated to be without

reserve. The items were two Alan Smart engineanalysers which were worth 14,000. The

claimant had submitted bids of 200 each. The

auctioneer refused to sell them at that price. Theclaimant brought an action for breach of contract

claiming damages of 27,600.


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Judgement

The claimant was entitled to damages. Where

an auction takes place without reserve the

auctioneer makes a unilateral offer which is

accepted by submitting the highest bid. Therewas thus a binding contract and the claimant

entitled to damages covering the loss of

bargain.


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Case:2Thornton v Shoe Lane Parking [1971] 2 WLR 585

Court of Appeal (Machines) The claimant was injured in a car park partly due to

the defendant's negligence. The claimant was given aticket on entering the car park after putting moneyinto a machine. The ticket stated the contract ofparking was subject to terms and conditions whichwere displayed on the inside of the car park. One ofthe terms excluded liability for personal injuriesarising through negligence. The question for the courtwas whether the term was incorporated into thecontract ie had the defendant brought it to the

attention of the claimant before or at the time thecontract was made. This question depended uponwhere the offer and acceptance took place inrelation to the machine.


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Judgement

The machine itself constituted the offer. The

acceptance was by putting the money into the

machine. The ticket was dispensed after the

acceptance took place and therefore theclause was not incorporated into the contract.


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Case:3Entorres v Miles Far East[1955] 2 QB 327 Court of

Appeal

The claimant sent a telex message from Englandoffering to purchase 100 tons of Cathodes fromthe defendants in Holland. The defendant sentback a telex from Holland to the London office

accepting that offer. The question for the courtwas at what point the contract came intoexistence. If the acceptance was effective fromthe time the telex was sent the contract was

made in Holland and Dutch law would apply. Ifthe acceptance took place when the telex wasreceived in London then the contract would begoverned by English law.


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Judgement

To amount to an effective acceptance the

acceptance needed to be communicated to

the offeree. Therefore the contract was made

in England.


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Case:4Butler Machine Tool v Ex-Cell-O Corporation [1979] 1

WLR 401 Court of Appeal

Ex-Cell-O wished to purchase a machine fromButler. Butler sent out a quotation of 75,535along with a copy of their standard terms of sale.

The terms included a price variation clause and aterm that the seller's terms would prevail overany terms submitted by a purchaser. The machinewould be delivered in 10 months. Ex-Cell-O put in

an order for the machine at the stated price andsent a set of their terms which did not include theprice variation clause.


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Contd

The order contained an acknowledgement slip

which required a signature by Butler and was

to be returned to Ex-Cell-O. This slip stated

that the contract would be subject to theterms stated overleaf. Butler duly signed the

slip and returned it. The machines were then

delivered and Butler sought to enforce theprice variation clause and demanded an extra

2,893. Ex-Cell-O refused to pay.


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Judgement

The offer to sell the machine on terms providedby Butler was destroyed by the counter offermade by Ex-Cell-O. Therefore the price variationclause was not part of the contract. The contract

was concluded on Ex-Cell-O's terms since Butlersigned the acknowledgement slip accepting thoseterms. Where there is a battle of the formswhereby each party submits their own terms the

last shot rule applies whereby a contract isconcluded on the terms submitted by the partywho is the last to communicate those termsbefore performance of the contract commences.


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Case :5Holwell Securities v Hughes [1974] 1 WLR 155

Dr Hughes granted Holwell Securities anoption to purchase his house for 45,000. Theoption was to be exercisable 'by notice in

writing' within 6 months. Five days before theexpiry, Holwell posted a letter exercising theoption. This letter was never received byHughes. Holwell sought to enforce the option

relying on the postal rule stating theacceptance took place before the expiry of theoption.


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Judgement

By requiring 'notice in writing', Dr Hughes had

specified that he had to actually receive the

communication and had therefore excluded

the postal rule.

C 6


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Case:6Pharmaceutical Society of Great Britain v/s Boots Cash Chemists

(Southern) Ltd [1953]

Boots Cash Chemists had just a new method forits customers to buy certain medicines. Thecompany would let shoppers pick drugs off the

shelves in the chemist and then pay for them atthe till. Before then, all medicines had to begotten behind a counter and an assistant had toget what was requested. The Pharmaceutical

Society of Great Britain objected and argued thatunder the Pharmacy and Poisons Act 1933, thatwas an unlawful practice.


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Contd..

Under s 18(1), a pharmacist needed to supervise atthe point where "the sale is effected" when theproduct was one listed on the 1933 Act'sschedule of poisons. The Society argued that

displays of goods were an "offer" and when ashopper selected and put the drugs into theirshopping basket, that was an "acceptance".Therefore because no pharmacist had supervised

the transaction at this point, Boots was in breachof the Act. Boots argued that the sale wasaffected only at the till.


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Judgement

Both the Queen's Bench Division of the HighCourt and the Court of Appeal sided with Boots.They held that the display of goods was not anoffer. Rather, by placing the goods into the

basket, it was the customer that made the offerto buy the goods. This offer could be eitheraccepted or rejected by the pharmacist at thecash desk. The moment of the completion of

contract was at the cash desk, in the presence ofthe supervising pharmacist. Therefore, there wasno violation of the Act.


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Case:7

Sudbrook Trading Estate v Eggleton [1983] AC AC 444

House of Lords

A lease gave the tenant an option to purchase

the freehold of the property at a price to be

agreed by two surveyors one appointed by the

tenant and one appointed by the landlord.The tenant sought to exercise the option but

the landlord refused to appoint a surveyor.

The landlord claimed that the clause was toovague to be enforceable as it did not specify a

price.


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Judgement

The clause was not too vague to be

enforceable as it put in place a mechanism to

ascertain the price.

The agreement must be certain.


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Case:8Carlill v Carbolic Smoke Ball Company

The Carbolic Smoke Ball Company made aproduct called the "smoke ball". It claimed to be acure for influenza and a number of otherdiseases, in the context of the 1889-1890 flu

pandemic (estimated to have killed 1 millionpeople). The smoke ball was a rubber ball with atube attached. It was filled with carbolic acid (orphenol). The tube would be inserted into a user's

nose and squeezed at the bottom to releasethe vapours. The nose would run, ostensiblyflushing out viral infections.


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Contd..

The Company published advertisements in the Pall Mall

Gazette and other newspapers on November 13, 1891,

claiming that it would pay 100 to anyone who got sick with

influenza after using its product according to the instructions

set out in the advertisement.

100[1] reward will be paid by the Carbolic Smoke Ball

Company to any person who contracts the increasing

epidemic influenza colds, or any disease caused by taking

cold, after having used the ball three times daily for twoweeks, according to the printed directions supplied with each

ball.


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Facts

Mrs Louisa Elizabeth Carlill saw the advertisement, bought one ofthe balls and used it three times daily for nearly two months untilshe contracted the flu on 17 January 1892. She claimed 100 fromthe Carbolic Smoke Ball Company. They ignored two letters fromher husband, a solicitor. On a third request for her reward, theyreplied with an anonymous letter that if it is used properly thecompany had complete confidence in the smoke ball's efficacy, but"to protect themselves against all fraudulent claims" they wouldneed her to come to their office to use the ball each day and bechecked by the secretary. Mrs Carlill brought a claim to court. Thebarristers representing her argued that the advertisement and herreliance on it was a contract between her and the company, and sothey ought to pay. The company argued it was not a seriouscontract.


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Judgement

The Carbolic Smoke Ball Company, despite being represented by HHAsquith, lost its argument at the Queen's Bench. It appealedstraight away. The Court of Appeal unanimously rejected thecompany's arguments and held that there was a fully bindingcontract for 100 with Mrs Carlill. Among the reasons given by thethree judges were:

(1) That the advert was a unilateral offer to all the world

(2) That satisfying conditions for using the smoke ball constitutedacceptance of the offer

(3) That purchasing or merely using the smoke ball constituted goodconsideration, because it was a distinct detriment incurred at the

behest of the company and, furthermore, more people buyingsmoke balls by relying on the advert was a clear benefit to Carbolic

(4) That the company's claim that 1000 was deposited at theAlliance Bank showed the serious intention to be legally bound.


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Case:9

Hyde v Wrench Wrench offered to sell his farm in Luddenham to Hyde

for 1200, an offer which Hyde declined. On 6 June1840 Wrench wrote to Hyde's agent offering to sell thefarm for 1000, stating that it was the final offer and

that he would not alter from it. [1] Hyde offered 950 in his letter by 8 June, and after

examining the offer Wrench refused to accept, andinformed Hyde of this on 27 June.

[2] On the 29th Hyde agreed to buy the farm for 1000

without any additional agreement from Wrench, andafter Wrench refused to sell the farm to him he suedfor breach of contract.


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Judgement

Under the circumstances stated in this bill, I think thereexists no valid binding contract between the parties forthe purchase of this property. The defendant offered tosell it for 1000, and if that had been at onceunconditionally accepted there would undoubtedly

have been a perfect binding contract; instead of that,the plaintiff made an offer of his own, to purchase theproperty for 950, and he thereby rejected the offerpreviously made by the defendant. I think that it wasnot afterwards competent for him to revive the

proposal of the defendant, by tendering an acceptanceof it; and that, therefore, there exists no obligation ofany sort between the parties.


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