Monthly Archives: April 2013

Sample examination questions.Page 25


question 1. Alice wrote to Bill offering to sell him a block of share sin Utopia LTD. In her letter which arrived in Tuesday Alice asked bill to let me know by next Saturday. On Thursday Bill posted a reply accepting the offer. At 6 pm on Friday he changed his mind and phoned Alice. She was not in so Bill left a massage saying he withdrew his acceptance.

On MoNDAY opened Bill’s letter. Then she played back the message on the machine.

Advise Alice/


The contract was, on the face of it, formed on the posting of the letter going by the postal acceptance rule. As Alice used posted it was plainly within the reasonable contemplation of the parties that the mail be used to communication acceptance. Alice should argue that there is a valid contract and that Bill must be held to it.

Bill will try and argue that his phone call should trump his letter. Alice’s case will be stronger because she read the letter before hearing the message. Bill could have tracked her down and told her that he no longer wished to accept.

A court would probably let Bill withdraw his acceptance.


Question 2.

Cyril a stamp collector had a rare Peruvian 5 cent blue for sale. He wrote to Dania a collector. He asked whether she would be interested in purchasing it. Davina wrote in reply I am willing p pay GBO 500 for the blue. I shall consider it min at that price unless I hear to the contrary and I will collect it from your shop on Friday next week.”

Advise Davina as to the legal position if

a. Cyril disregard the letter and sold the stamp to Eric for GBP 600

b. If Cyril put the stamp on one side in an envelope marked ”sold to Davia” but then Davina decided that she no longer wanted it.


Davina made an offer. It is for Cyril to accept or not. The offeror cannot say that there is no need for communication like this because it is to the disadvantage of the offeree. One cannot accept by default like this. Davina;s case in situation a is feeble. Cyril is free to parley with others. His selling the stamp to someone else for GBP 600 is legal.

In the situation of B then this is tricky. Cyril has not communicated his acceptance to Davina and will not until she comes into the shop. If she informs him before then she can get out of it. If she arrives to find the envelope then she has probably formed a contract.

self assessment questions Page 24


1. When can an offeror break his or her promise to keep an offer open for s specified time?


An offeror is free to withdraw his offer at any time provided that he has not set up a separate collateral contract to keep the offer open for a set period.



2. Ina  aulintarerla contarct which is accepted by performancw ewhn ahs the fferee started to perform the act so as ti orevent revocation by the offeror? Does the offeror need to know of performance?

The offeree has started to perform it when he has started to perform it. What else can one say? No the offeror does not need to know of this. Usually he will only he informed when the performance is complete. See cases such as Carlill v Carbolic Smoke Ball 1876 and R v Clarke in the High Court of Australia 1929.




3. How can the offeror inform all poteneita claimants that the offer of a reward has been canceleld?


By the same means that he advertised it in the first instance.


4. Will there by a contrac if the offeree posts a leter rejeciung the offer but then informs the offeror by telephone, before the letter arrives, that he accepts the offer?

Yes, this trumps postal acceptance.



5. What is the prupose in implyiing tht the offer is subhject to a condition?


So that one cannot make a contract almost by accident. It is like a house sale subject to contract. It must be a proper signed contract. Verbal agreement or conduct will not operate to seal it.


Self assessment questions 1 and 2. Page 22


1. Where a method of acceptance is prescrbed by the offeror

a. May the oferee use another equally effecie method of communicating his acceptance?

b. What does equally effective mean?

c. Whose interest should prevail?

2. Can an offer made by fax be accepted by post?


1. a. he may use another means so long as the offeror did not say that the specified means of communication was the ONLY acceptable method.

b. Equally effective means fast and certain to get through.

c. The interest of the offeree prevails as in when communication is waived this is valid so long as this does not disadvantage the offeree.



2. Yes. So long as the offeror did not say that the offeree must reply by fax or some faster means.


Acitity 2.8 page 21. Letter to clean house


A posts a lettr offering to cean B s house. B Posts a letter accperitn A ;s offer. Later iun the day B shouse burns down. B now no longer needs a cleanr. B immediately posts a letter saying this. Both of B’s letters arrive at the same time. Is there a contract or not? See COuntess of Dunmore v Alexander 1830.


The contract was formed when the acceptance was posted. The contract is frustarted though. The subject matter – i.e. the house in this case – has been destroyed. Performing the contract has been phsyically impossible. If B wanted to countermand the acceptance then she should ahve used a faster means of communication to overrule the first letter.


3. What circumsatnces will mean that the postal acceptance rule will not operate? 


Sometimes it is not a reasonable thing from an objective not a subjective perspective thing to use the post. This is especially so if a party has said that another faster form of communication needs to be employed instead. It may not be in the reasonable contemplation of the parties that post will be used. It may also depend on what the offeror used at the beginning. If he used post then postal acceptance is probably valid.


4. When if ever can one waive the need to communicate?


Yes so long as it is not to the detriment of the offeree. In the Carlill v Carbolic Smoke Ball there was no need to communicate acceptance. It was an offer to all the world. One had to merely perform it and then inform the offeror.


Activity 2.8 Page 21


WHAT rules should a corut adopt for communication by fax or email?


The court should says that when the communique is received (that is to say read) then that is when the contract is formed. The postal acceptance rule is only for mail. That says that when something is put in the post that is when a contract is made. The courts are loathe to extent this rule to other methods of communication. Moreover, the postal acceptance rule only operates where the offeror reasonably expected to receive an answer by post. If he specifies that another means must be used then that stands.

The point is to have clarity. We need to know when a contract is formed. People can read emails seconds after they are sent. It might be that is it not opened for days. If the offeree wants to make sure a message gets through then he had better phone. 

Activity 2.6 page 19


What is the position under the last shot rule if after the exchange of forms the seller fails to deliver the goods?


In this case he is in the wrong. He has breached the contract. The last shot rule says that the last thing agreed is the contract. There may have been lengthy negotiations beforehand but once an agreement is reached then that is binding. A contract must have certainty to it. The conditions must be clear. If things are unclear, if there is a need for further parley then there is no meeting of minds ergo an agreement has not been arrived at.

An open door invitation.


About a week ago I went up the stairs to my hotel room. To my intense surprise I heard mewling from a woman in a bedroom down the corridor. There are only 4 rooms on the corridor. I noticed the door was open but thought no more of it. I went into my room. This sound continued – she was plainly not in pain. Quite the opposite was the case. She carried on moaning with what I became certain was sexual delight. I opened my door and listened more keenly. Yes, it was just as I had thought. Her bedroom door was wide ajar. I could see the bed but not her. She was just out of the line of view. I listened for a male voice – grunting, heavy breathing. But no – there was nothing. I had assumed that her husband or boyfriend was giving her one. Methinks she was going solo.

Why in the Middle East would a lady do this? Was this to beckon me in? The other two rooms were unoccupied. I considered approaching her door on the pretext of thinking she was in grief of ill. But then I thought what if there is a man in there. Is is a trap? I never saw the woman from that room. 

I shall never know if it was an attempt to lure me in there. I rue not having a peek.