Chapter 1 Key facts checklist

Chapter 1 Key facts checklist

Agreement
  • Agreement is normally determined by the existence of offer and acceptance.
  • You should ensure you can distinguish between bilateral agreements (promise in exchange for promise) and unilateral agreements.
  • An offer is a definite promise to be bound, without more, if the offeree agrees to the offer terms and must be distinguished from an invitation to treat which is an invitation to negotiate or make offers.
  • All responses must be communicated in order to be effective. The correct communication rule must be used.
  • Acceptance is the final and unqualified agreement to all the terms contained in the offer—and thus must be in response to the offer. It follows that adding or amending an offer term amounts to a counter-offer which itself constitutes an offer and is not an acceptance. A counter-offer also destroys the original offer so that it is no longer available for acceptance. Counter-offers must be distinguished from requests for further information before deciding whether to accept. Requests for further information do not have the effect of a counter-offer.
  • Acceptance must be actually communicated (operates on receipt) although postal acceptances are effective on posting (operate on dispatch). The postal rule can be avoided and it may even be possible to overtake a postal acceptance with another communication.
  • Actual communication in the case of non-instantaneous communications using instantaneous means (e.g. leaving messages on telephone answering machines) depends on who has the onus of communicating and the question of fault. In the case of communications to businesses which are not instantaneous, the point when they become effective depends on what the parties would reasonably expect so that communication to the machine (business communications sent during office hours) will be actual communication. Communication on the next working day is to be anticipated where messages are sent to businesses outside office hours.
  • Revocation of an offer can occur at any time before acceptance and in the context of unilateral offers this will generally mean before the offeree has started to perform.
  • Revocation of an offer must be communicated to the offeree (although need not be communicated by the offeror) and communication via the same channel as the offer will suffice where the revocation relates to a unilateral offer to the whole world.
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