Case

You are expected to have an understanding of the outcome of each of the cases below, to help
you argue the legal principles. In Weeks 1-2 you will be provided with the legal MAIN CORE
principles in the table. From Weeks 3-11, you are expected to identify these principles
YOURSELF in your reading.

Principle Relevant cases

An offer can only exist if there is a firm promise to do or to
refrain from doing something. The mere supplying of
Harvey v Facey [1893] AC 552
information, whether in response to a request or otherwise, is
not an offer to deal.

Pharmaceutical Society of Great

Britain v Boots Cash Chemists
A mere display of goods for sale at marked prices is generally (Southern) Ltd [1953] 1 All ER
regarded as an invitation to treat, not an offer. 482.
Fisher v Bell [1961] 1 QB 394.

Grainger & Son v Gough [1896]

Advertisements are usually regarded as invitations to treat.
AC 325
It is possible for a statement not directed to any specific Carlill v Carbolic Smoke Ball
group of acceptors to be an 'offer to the world at large'. Company [1893] 1 QB 256
Mildura Office Equipment &
Offers must set out the means by which it can be accepted. Supplies Pty Ltd v Canon Finance
Australia Ltd [2006] VSC 42
Once the acceptor has become aware of the offer, it can be
Williams v Carwardine (1833) 5
accepted and the acceptor’s motive for accepting it is
Car & P 566
immaterial.
The existence of the offer must be in the offeree’s mind at the
time of purported acceptance and the 'acceptance' must be
R v Clarke (1927) 40 CLR 227
both in response to and as a result of the offeree’s knowledge
of the offer.
Exaggerated statements that no reasonable person would
believe, known as 'puff', are not binding on the party making Leonard v Pepsico Inc 88 F Supp
them and do not give the other party any grounds on which to 2d (SDNY 1999)
seek a remedy.
Routledge v Grant [1828] 4 Bing
The offeror’s entitlement to revoke is absolute.
653
Any revocation of an offer must be communicated to the Byrne & Co v Van Tienhoven &
 Principle Relevant cases
offeree before it becomes effective. Until the offeree becomes
aware of the revocation, he or she can accept the offer and Co (1880) 5 CPD 344
any such acceptance will create a valid and binding contract.
Only if the promisee has paid to keep the offer open or if the
promise to keep it open has been made by deed will the
Goldsbrough Mort & Co Ltd v
offeror not be able to withdraw it. This is a new and quite
Quinn (1910) 10 CLR 674
separate contractual obligation to keep the offer open called
an 'option'.
A counter-offer is a rejection of the original offer and a
substitution of a new offer for it. The counter-offer destroys Hyde v Wrench (1840) 2 Beav 334
the original offer and, thereafter, it cannot be accepted.
A mere inquiry is not an acceptance, but neither is it a
counter-offer or rejection. It has an entirely neutral effect on Stevenson v McLean (1880) 5
the offer, and when the offeror replies, the offeree still has the QBD 346
option of accepting or rejecting.
Where firms have their own preprinted purchase order forms
and shipping vouchers or delivery dockets with terms under Butler Machine Tool Co Ltd v Ex
which the orders are sent or received, each set of terms is Cell O Corp(England) Ltd [1979]
considered a counter-offer and 'the set submitted last' takes 1 WLR 401
precedence.
Where no time limit is stipulated, the offer must still be
Ramsgate Victoria Hotel v
accepted within a 'reasonable time'. Once that reasonable time
Montefiore (1866) LR 1 Ex 109
expires, the offer automatically comes to an end.

If you haven't already, make sure to review all assessments for this unit. Some key things to note:

 The three assessments cover material from the themes within the unit.
 You are strongly advised to work progressively on all assessments throughout the
teaching period. Participating in the weekly discussion activities will support you as
you prepare for each assessment.

Ensure that you take notes on the cases from each week to help you work towards the relevant
assessment tasks.
Cases
You are expected to have an understanding of the outcome of each of the cases below, to help
you argue the legal principles. In weeks 1-2 you will be provided with the legal principles in the
table. From weeks 3-11, you are expected to identify these principles yourself in your reading.

Principle Relevant cases

In determining what constitutes a reasonable time, at least two

considerations are important:
Manchester Diocesan
a. the nature of the subject matter of the contract (and, in Council for Education v
particular, whether it was of a wasting nature); and Commercial & General
b. the means used to communicate the offer (the more Investments Ltd [1970] 1
urgent the means used, the more reasonable it would be to WLR 241
presume that a rapid reply was required).

Brogden v Metropolitan
Acceptance can occur through conduct. Railway Company (1877) 2
App Cas 666

The offer must be present in the mind of the “acceptor” when the
“acceptance” occurs or there is no true acceptance (that is, the act of R v Clarke (1927) 40 CLR
acceptance must have been in response to, and as a result of, the 227
offer).
An acceptance can only be communicated by the offeree or by an
Powell v Lee (1908) 99 LT
agent duly appointed for that purpose. Until the offeror becomes
284
aware of the acceptance, the acceptor is not bound.
The offeror cannot stipulate that silence (such as not actively Felthouse v Bindley (1862)
declining the offer) is a means of acceptance. 11 CBNS 869
The postal rule states that where the parties contemplate acceptance
Adams v Lindsell (1818)
by mail, acceptance will be complete as soon as the letter is properly
106 ER 250
posted.
The postal rule specifically applies to acceptances by mail and by
telegram. For other forms of communication, the general rule applies
Entores Ltd v Myles Far
and acceptance occurs when and where the offeror receives the
East Corporation [1955] 2
communication. This includes acceptances by telephone, telex,
QB 327
teleprinter, facsimile machine and other forms of instantaneous or
near-instantaneous communication.
Where the postal rule or a “deemed acceptance” provision applies, a Household Fire and
posted acceptance will be effective, even if it becomes lost, is never Carriage Accident
 Principle Relevant cases
Insurance Co v
delivered or is abnormally delayed.
Grant (1879) 4 Ex D 216
The offeror can negate the postal rule by requiring actual
communication instead of the constructive communication, either by Holwell Securities Ltd v
expressly stipulating that they must receive the acceptance for it to Hughes [1974] 1 All ER
become effective or by implication where it's clear that 161
uncommunicated acceptance was not intended.
If money is contributed as part of expense sharing, there is still no
Coward v Motor Insurers
contract unless there is evidence of intention to create a legally
Bureau [1963] 1 QB 259
binding contract.
Agreements between spouses are not contracts because the parties
Links to an external
did not intend that they should be attended by legal
site.Balfour v
consequences. Domestic agreements between spouses are outside the
Balfour [1919] 2 KB 571
realm of contract altogether.
It is possible for a spouses to create a binding contract, for example Merritt v Merritt [1970] 2
as part of a separation arrangement. All ER 760
Where adult members of a family other than husband and wife share
Riches v Hogben (1986) 1
a household, the financial arrangements which they make may be
Qd R 315
intended to have contractual effect.

Ermogenous v Greek
Orthodox
In commercial agreements, it is presumed the parties intend to create Community(2002) 209
legal relations. However, if the parties expressly deny intention by CLR 95
stating that negotiations are ‘subject to contract’ or that any
agreement is to be ‘binding in honour only’ then there is no contract. Rose & Frank Co v
Crompton Bros [1923] 2
KB 261

An agreement between persons who share a household, but which

Simpkins v Pays [1955] 1
has nothing to do with the management of the household, will
WLR 975
probably be intended to be legally binding.
If the act put forward as consideration was performed before any Eastwood v Kenyon (1840)
promise of reward was made, it is not valid consideration. 113 ER 482
As long as some value is given, consideration need not be ‘adequate’
Thomas v Thomas (1842) 3
(that is, be of equal or greater value to the promise). There is no
QB 234
remedy for someone who makes a bad bargain.
 Principle Relevant cases

Forbearance (a promise not to do something that the promisee was

Dunton v Dunton (1892) 18
entitled to do or not exercising a present right at the request of the
VLR 114
promisor) can constitute good consideration.
Cases
You are expected to have an understanding of the outcome of each of the cases below, to help
you argue the legal principles. In Weeks 3-11, you are expected to identify the legal principles
that these cases relate to in your reading and complete the table for your study notes as modelled
in weeks 1-2.

Principle Relevant cases Textbook section

Mercantile Bank
of Sydney v
4.3
Taylor (1891) 12
LR (NSW) 252
Van Den
Esschert v
4.8
Chappell [1960]
WAR 114
De Lassalle v
Guildford [1901] 4.14
2 KB 215
Hoyts Pty Ltd v
Spencer (1919) 4.15
27 CLR 133
JJ Savage &
Sons v
4.17
Blakney (1970)
44 ALJR 123
http://www.e-l
Routledge v awresources.co.
McKay [1954] 1 uk/Routledge-v-
All ER 855 Mackay.phpLink
s to an external site.
Oscar Chess v
Williams [1957]
4.12
1 All ER 325
[PDF, 17KB]
Dick Bentley
Productions Pty
Ltd v Harold
4.12
Smith (Motors)
Pty Ltd [1965] 1
WLR 623
Principle Relevant cases Textbook section
Ellul v
Oakes [1972] 3 4.12
SASR 337
BP Refinery
(Westernport)
Pty Ltd v Shire
4.34
of
Hastings (1977)
180 CLR 266
L’Estrange v
Graucob [1934]
2 KB 394 Links 4.28
to an external
site.
Toll (FGCT) Pty http://classic.au
Ltd v stlii.edu.au/au/jo
Alphapharm Pty urnals/UNELawJ
Ltd [2004] HCA l/2005/9.pdfLin
52 ks to an external site.
Curtis v
Chemical
Cleaning and
Dyeing
4.29
Co [1951] 1 KB
805 Links to an
external site.
(Clarke 2010)
Clarke, B.,
Kapnoullas, S., When
is a signed document
contractual? Taking
Le Mans Grand
the 'Fun' out of
Prix Circuits Pty
'Funfair' [2001]
Ltd v
QUTLawJJI 4
Iliadis [1998] 4
(http://classic.aust
VR 649
lii.edu.au/au/journals
/QUTLawJJl/2001/
4.htmLinks to an ext
ernal site.)
Class Session Discussion