Offer and Acceptance in the Courts

Offer and Acceptance in the Courts

In dealing with problems of offer and acceptance, the Courts have

taken a strict approach, stating that there must be clear offer and

acceptance in order to create a binding contract. As such, offers must

be clear on their terms and capable of acceptance and can only be

accepted on terms that mirror the offer, as established in the case of

Gibson v ManchesterCityCouncil (1979) [1]. There are dicta in certain

cases, notably in the judgments of Lord Denning MR, which have

attempted to mitigate this harsh approach, in the case of Butler

Machine Tools Co Ltd v Ex-Cell-o Corporation (England) Ltd (1979)[2].

However, as Lord Denning's approach in the Court of Appeal was firmly

rejected by the House of Lords in Gibson v ManchesterCityCouncil

(1979)[3], it is submitted that these dicta do not represent the

current law.

However, it is necessary to consider each communication that took

place between the parties in this case, to see if the formalities of

offer and acceptance have been fulfilled and if so, with whom the

contracts exist with.

2. Contractual effect of the advertisement

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Usually in contract law, advertisements are not considered to be

offers, but are invitations to treat Partridge v Crittenden (1968) [4].

An invitation to treat is an invitation to commence negotiations. It

is known as an invitation to mark an offer. Offers must consist of a

specific promise to be bound providing certain terms are accepted.

However, an advertisement is normally considered mere attempts to

induce offers and cannot be considered offers themselves. The policy
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... Machine Tools Co Ltd v Ex-Cell-o Corporation (England) Ltd

(1979) 1 All ER 965

[3] Gibson v Manchester City Council (1979)

[4] Partridge v Crittenden (1968) 2 All ER 421

[5] Grainger & Son v Gough (1896) AC 325 per Lord Herschell at 334

[6] Carlii v The Carbolic Smokeball Co. Ltd (1893)

[7] Adams v Lindsell

[8] Household Fire Insurance Co v Grant (1879) 4 Ex D 216

[9] Holwell Securities Ltd v Hughes (1974) 1 All ER 161

[10]Gibson v Manchester City Council (1979)

[11] Hyde v Wrench (1840) 49 ER 132

[12] Stevenson v McLean(1880) 5 QBD 346

[13] G Percy Trentham Ltd v Archital Luxfer Ltd (1993) 1 Lloyd's Rep

25

[14] Felthouse v Bindley (1862)

[15] Empirnall Holdings Pty Ltd v Machon Paull partners Pty Ltd (1988)

[16] Stevenson v McLean (1880)

[17] S12 Saleof Goods Act 1979