1. Rejection and Counter Offers 5

Offer 3

1. Negotiation 3

2. Offers or invitations to ‘treat’ 3

Acceptance 5

1. Rejection and Counter Offers 5

2. Conduct 5

3. Methods of Acceptance (prescribed by offeror ) 5

Legislation 6

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 7

6. Restitutionary Remedies 8

Certainty and agreement 9

1. Terms 9

2. Negotiations in Good Faith? 10

3. Conditional Agreements: Theory 10

Intention to Create legal Relations 11

1. Family Agreements 11

2.Social Agreements/Agreements 11

3. Commercial Agreements 11

4. Government Schemes 12

5. Difficult Categories 12

Consideration 13

1. Test for Bargain and Practical Benefit 13

2. Past Consideration 13

3. Value of Consideration 13

4. Economic Duress 13

Promissory Estoppel 15

1. Shield 15

2. Sword 15

5. Suspension of Rights? 16

6. Remedies 16

Capacity and Formalities 17

1. Capacity: 17

2. Formality (linked to express terms and intention): 17

Express Terms 18

1. Signature 18

2. Term/collateral contract or mere representation/opinion 18

3. Parol Evidence Rule (presumption written doc whole contract) 18

4. Incorporation of Terms into Contract 19

Implied terms 20

A. Terms Implied by the Courts 20

1. Implied by Custom (bakers dozen, rarely used) 20

2. Terms Implied in Fact (specific) 20

3. Implied in Law (generic terms always implied in particular types of contract) 20

4. ‘Universal Terms’ and Good Faith? (universal) 20

B. Terms Implied By Statute 21

1. Sale of Goods Act 1896 (Qld) (general application to sale between businesses) 21

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 21

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 21

Exemption Clauses – common law 24

Unfair Terms - statute 26

Offer

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.

o  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

o  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.

o  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.

o  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)

Acceptance

·  *Brinkibon: agents can be used to when they have actual or apparent (ostensible authority)

·  an objective test disregarding parties actual state of mind and considering only external manifestations is used (Fitness First v Chong, where acceptance is on signature).

·  Paterson v dolman: capacity of more than one acceptance

1. Rejection and Counter Offers

·  Hyde v. Wrench (1840 UK): Counter offer destroyed original offer: ‘must be simple acceptance of terms’

·  Stevenson v Maclean (1880): Inquiry for information not counter offer

·  Rest Sea v APT [2010] NSWCA: “attempt at acceptance with insufficient clarity” not counter offer, acceptance or rejection

·  Oriolo v Wolfram [2011] NSW: offeree may ignore counter offer and accept.

2. Conduct

·  Brogden v. Metropolitan Railway (1877): Acceptance by conduct. Commercial reality is that business parties will begin project before finishing contract and will need to find retrospective acceptance. ‘consensus short of complete expression, discovered from docs of an incomplete description’

·  *Empirnall v. Machon Paul (1988): E requests work from M, oral contract is formed for regular process payments. M requests E signs contract, told E does not sign. M replied “proceeding on understanding conditions are accepted by you, and works are conducted in accordance”. Held: Kirby: objective test, silence never acceptance. McHugh Samuels: silence in conjunction with other circumstances can indicate acceptance

o  Took benefit of offer with knowledge of terms (and made process payments according to it)

o  Commercial understanding

o  Offeror indicated he was willing to be bound by an oral contract (objection to manner not terms)

·  Kriketos v Livschitz [2009] NSWCA: Allsop P: subsequent conduct may manifest intent to be bound

2.1  rewards: Fitch v Snedeker (1868, US): info given in ignorance of reward doesn't = acceptance

·  R. v. Clarke (1927): motive relevant  no legal claim if act to prevent a criminal charge per Issacs J

2.2  Standing Offers: Great Northern Ry. v. Witham (1873) LR: could revoke standing offer for future.

2.3 Silence and Acceptance by Conduct

·  Felthouse v Bindley (1862) cant impose acceptance by silence.

·  Latec Finance v. Knight [1969]: to waive rule of acceptance must exhibit intent to do so. Cf carlil. Contract between two parties through another, not signed by one for TV finance. Tv kept. actions not evidence offer was accepted.

2.4 Consumer Protection Legislation

·  Credit (Commonwealth Powers) Act 2010 (Qld). s. 14(1) Offer in writing, signed by debtor and credit provider. s.14(2) Accept by drawing down credit or other act satisfying offer

·  ACL: S39 prohibits unsolicited cards, S40 prohibits the assertion of a right to payment for unsolicited goods or services, Ss 41, 42 no liability for reciept of unsolicited goods or services, S43 prohibits assertion of right to payment for unauthorized ads

·  PADMA 2000 (Qld): s369 5 business days starting on day buyer receives contract. Can be waived

3. Methods of Acceptance (prescribed by offeror )

·  Manchester: may use any ‘not less advantageous mode’. Consider: speed, security, reliability, record

3.1 Instantaneous Methods

·  Brinkibon v. Stahag Stahl [HL 1983]: General Rule: Acceptance is communicated when and where it is received. Lord Wilberforce: consider Intentions of the parties, Sound business practice", and in some cases a judgment where the risks should lie

·  Entores v. Miles Far East [Eng. CA,1955]: communication need be merely virtually instantaneous

3.2 Correspondence between offer and acceptance/Battle of the forms

·  *Butler Machine v Ex-Cell: 23 May S quotes price, terms (price variation clause) on back of quote: ‘orders subject to our conditions which shall prevail’. 27 may. B replies with order, rejects price variation clause and provide own terms but accept order on S terms. 5 June S replies and returns slip but cover latter on delivery said ‘in accordance with our revised quotation of 23 May.

o  Acknowledgement was an acceptance. Lord Denning: docs should be considered as a whole, letter on 5 june is decisive.

o  Appeal judge: s should prevail as were most forceful C18 conflict replaced with synthesis…

3.3 PAR

·  Acceptance not effected until it’s communicated to the offeror (Byrne v Tienhoven), but if parties contemplated use of post its complete as soon as letter is posted per Dixon (Tallerman v Nathans). The contact is not precluded if the letter is lost or another contract made (Household Fire v. Grant).

·  Adams v. Lindsell [1818]: genesis of PAR. First to post accepts risk as they implied post reply was acceptable. too circular if receipt required

·  This presumption may be rebutted by requesting written notice (Holwell Securities v. Hughes) or receipt (Nunin Holdings Pty Ltd v Tullamarine)

·  Vienna Convention on International Sales Art 24: PAR Does not apply to international trade: acceptance will be effective when an indication of assent reaches the offeror.

·  Gardiner: acceptance rule heavily favours offeree and may outweigh unfairness of an offeror being able to cancel at any time.

3.4 New Forms of Communication (no set of rules yet)

·  Ebay v. Creative Festival [2006] FCA 450, #48-49: analogous to ticket cases Rares J

o  eBay argues the contract was signed electronically à change in terms was ‘misleading and deceptive conduct’. Reasonable person would fund online steps to amount to contract.

o  Creative argued it upon receiving and considering ticket  but terms precliuded refund

·  Brinkibon, per Lord Wilberforce: PAR is justified by a ‘substantial interval’ - no such interval with email.

Legislation

·  UNCITRAL Model law (1996):

o  Art 11: In the context of contract formation, unless otherwise agreed by the parties, an offer and the acceptance of an offer may be expressed by means of data messages.

§  not intended to interfere with formation of contracts but promote international trade by providing increased legal certainty

§  uncertainty in a number of countries as no human interaction or hard copy

o  Art 15:

§  dispatch when it enters an info system outside senders control

§  Dispatch and receipt is in place of business or habitual residence. (because not uncommon to not know where info system is, and receipt and retrieval might be in different locations to addressee)

§  Do not “designate” merely by giving an email address.

§  Deemed to receive when “retrieved” by A (not to A’s “attention”),

·  Electronic Transactions Act 2001 (Qld)

o  14 Allows electronic signatures

o  23 Time of dispatch: when communication enters info system outside originators control unless otherwise agreed

o  24 Time of receipt: (1) if the addressee has a designated system to receive electronic communications the time of receipt when it enters the information system unless otherwise agreed. (2) if the addressee has no such system receipt is when it comes to their attention

o  s 25- communication occurs at the originator’s and receiver’s place of business, unless otherwise mentioned.

·  2005 UN convention: Improves s24(2) ETA by stating receipt occurs ‘when capable of being retrieved’.

·  Vienna Convention 1986, Art 24: an offer, acceptance or declaration of intent reaches the addressee when it is made orally to him or delivered to him personally