Offer negotiation Offers or invitations to ‘treat’ Acceptance 4

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Offer 2

1. Negotiation 2

2. Offers or invitations to ‘treat’ 2

Acceptance 4

1. Rejection and Counter Offers 4

2. Conduct 4

3. Methods of Acceptance (prescribed by offeror ) 5

Legislation 5

Termination of offer 7

1. General Rules of Revocation 7

2. Evidence of revocation 7

3. Options 7

4. Revocation and Unilateral Contracts ('Walking to York‘ problem) 7

5. Lapse of Offer 8

6. Restitutionary Remedies 8

Certainty and agreement 9

1. Terms 9

2. Negotiations in Good Faith? 10

3. Conditional Agreements: Theory 11

Intention to Create legal Relations 12

1. Family Agreements 12

2. Social Agreements/Agreements 12

3. Commercial Agreements 13

4. Government Schemes 13

5. Difficult Categories 13

Consideration 15

1. Test for Bargain and Practical Benefit 15

2. Past Consideration 15

3. Value of Consideration 15

4. Economic Duress 16

Promissory Estoppel 18

1. Shield 18

2. Sword 18

5. Suspension of Rights? 19

6. Remedies 20

Capacity and Formalities 21

1. Capacity: 21

2. Formality (linked to express terms and intention): 21

Express Terms 22

1. Signature 22

2. Term/collateral contract or mere representation/opinion 22

3. Parol Evidence Rule (presumption written doc whole contract) 23

4. Incorporation of Terms into Contract 24

Implied terms 26

A. Terms Implied by the Courts 26

1. Implied by Custom (bakers dozen, rarely used) 26

2. Terms Implied in Fact (specific) 26

3. Implied in Law (generic terms always implied in particular types of contract) 26

4. ‘Universal Terms’ and Good Faith? (universal) 27

B. Terms Implied By Statute 27

1. Sale of Goods Act 1896 (Qld) (general application to sale between businesses) 27

2. TPA supplemented SOGA covering lease, hire and services. regularly amended, focus: national contract regulation between businesses & consumers. Div 1 unfair practises. Div 2 ‘conditions and warranties’– implied terms: ss 68 clauses excluding implied terms void, 69: title, 70: description, 71: fitness for purpose or merchantability, 74: supply of services 28

3. CCA 2010 TPA amended and renamed to solve federalism problems, Div 2 significantly changed: provisions grouped together, replaced implied term concept (now stand alone remedy), clearer (merchantability replaced with acceptability), defined remedies (major and minor), prevented clauses excluding it 28


Exemption Clauses – common law 32

Unfair Terms - statute 34


1. Negotiation

  • *Carbolic: would a reasonable person in the position of the offeree consider an offer was intended and meant to be binding on acceptance? (objective test)

  • Heydon in Brambles Holdings v Bathurst: ‘must give offeree an opportunity to choose between acceptance and rejection’ ‘commanding language may not be regarded as an offer’.

  • Harvey v Facey [1893] A.C: Supplying information not an offer

2. Offers or invitations to ‘treat’

2.1 advertisements

  • Fisher v. Bell [1961] Q.B: acceptance takes place at till not at window

  • Pharmaceutical Society of G.B. v. Boots [1953]: in self service store customers picking up goods did not amount to acceptance, could still return and subject to supervision - Birkett and Sommervell LJ

2.2 Newspapers

  • Partridge v. Crittendon [1968] E.R:

  • Cf. *Carlill v. Carbolic Smoke Ball Co. [1893]: Carbolic reward/unilateral contract while the others bilateral. Advertisments usually invitations to treat. Bowen:

  1. Bank deposit made the offer more than mere puff in any reasonable persons objective opinion

  2. Offer was made to the whole world and could be accepted by any person who performed the conditions

  3. Reward type of offer so offeror dispensed notification

  4. Enough restriction and certainty was given: any person who contracted the disease during the epidemic, while using the smoke ball and within a reasonable time after using it.

    • Result changed if: less specific, set out terms of acceptance (through letter), proof required, time limits

2.3 Auctions (buyer makes contract with seller though auctioneer facilitates)

  • Sale of Goods Act 1896 (Qld), s.59 1b) acceptance on oral acceptance or fall of hammer. c) seller bidding is fraudulent. d) unless seller reserves the right to bid

  • AGC v. McWhirter (1977): Seller not bound to accept highest bid, even if “sale without reserve”

  • Payne v Cave no claim if the auction is cancelled or bid withdrawn before acceptance

2.4 Offers and Tenders

  • Spencer v. Harding (1870) Distinguish between invitation to submit a “tender” and actual tenders. Tender is an invitation to treat unless it indicates highest bid will be accepted. Invitation to tender in absence of any specific wording such as "and we undertake to sell to the highest bidder" per Wiles J

  • *Blackpool & Fylde Aero Club v. Blackpool ENGLAND [1990]: If submit conforming tender before deadline then should be entitled to have opened and considered. Failed to check mail. The more formalised the tender process, the more likely obligation is expected

2.5 Tenders and Process Contracts

  • Hughes Aircraft Systems v Airservices AUSTRALIA (1997) FCR: CAA sends letter detailing process which specifies fairness and that an auditor will be hired, all sign. CAA breached process contract. Guidelines = v. likely a process contract exists

  • IPEX v. State of Victoria [2010]: court not to decide the merit of the process contract

2.6 Passenger Tickets

  • MacRobertson Miller v. Cmr. of State Taxation (1975): Ticket was offer, contract acceptance was by conduct and not returning ticket after a reasonable opportunity to read the terms per Stephens J

  • Thornton v. Shoe Lane Parking [1971]: Lord Denning: ‘contract concluded before ticket came out of machine when contract could not be recinded on seeing terms.

  • *Baltic Shipping v Dillon (1991) NSWL: ship sank and passengers claimed damages

    • Contract of carriage on ticket recipt and P was not bound by the terms on the ticket  not drawn to her notice or given an opportunity to decline to contract upon those terms.

    • Gleeson and Kirby: acceptance not on purchase of ticket, but on issue. Didn't do all reasonably necessary to draw attention to terms and give P and opportunity to decline. Therefore limitation clauses not included. Cf. Hood v Anchor: acceptance if a passenger chooses not to examine terms when everything reasonable has been done

      • Kirby P: availability at offices did not amount to notice. no capacity to change terms.

    • Mahoney JA, dissent: Knowledge of potential contract existed on deposit; clear there would be a contract issued with ticket. Booking material alerted buyer of brochures with contract and perusal expected. Changed result: attention drawn to terms, terms weren’t unusual, brochures posted with booking form

Contractual Classical Theory based upon “freedom of contract.”

  • Underpinned US and English development of contract law

  • Free will of parties protected: government best when it governs least: sir George Jessel: ‘men if full age and competentcy should have the utmost liberty in contracting, and when contracts are enetered into freely they should be upheld by courts’

  • Not necessarily morally just to give effect to parties intent, assumes full negotiation (standard forms, online aren’t), courts reluctant to give effect to non-contractual obligations, only binding through courts (not true freedom)

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