ACCEPTANCE AND REVOCATION
•Acceptance and Revocation in Unilateral Contracts
•Acceptance (in unilateral contracts) made by performing required act – even, possibly, without giving notice
–e.g. Carlill v Carbolic Smoke Ball co.
•Question: when can an offer be revoked in a unilateral contract; consider a situation where the offeree had already started the act of acceptance
•Traditional position: that there must be full performance before acceptance is complete
–Per Brett J in Great Northern Rly. Co. v Witham (1873) LR 9 CP 16, 19 (if A offers B £100 to walk to York, A could revoke at any time before B reached York)
–Luxor (Eastbourne) Ltd v Cooper [1941] AC 108 (estate agent found buyer for 2 cinemas; principal refused to sell to buyers; held agent not entitled to the commission of £10,000)
•Acceptance and Revocation in Unilateral Contracts
•Cf. implication of term, in respect of a unilateral contract, that the offeror should not do anything that prevents the offeree from completing the act of acceptance
• Errington v Errington & Woods [1952] 1 KB 290
–Father promised son and d-i-l that if the couple kept up repayments on father’s house, the house will be transferred to them
–Couple began the repayments (though without promising so to the father)
–Father died and his PRs tried to revoke the agreement
–Held: Father’s promise was a unilateral offer; and it could not be revoked once the couple started the repayments
•Acceptance and Revocation in Unilateral Contracts
•Daulia v Four Mill Bank Nominees Ltd [1978] Ch 231
–Clmt wished to purchase some property
–Told by defts to show up next day with banker’s draft for deposit and signed/engrossed contract and defts would exchange contracts
–Clmt did so but defts refused to exchange contracts because they had found a buyer for a higher price
–Held: this was a unilateral offer and clmt had fully performed/satisfied the condition
–Note per Goff LJ that while offeror in a unilateral contract is entitled to require full performance, that must be subject to the important qualification that there must be an implied obligation that the offeror will not prevent the performance by the offeree and this obligation arises as soon as the offeree starts to perform.
•Certainty of Agreements
•Courts do not make agreements for the parties; parties themselves do
•Hence, agreement must be expressed in a sufficiently certain manner
•However, courts reluctant to hold that there is no contract simply because of some uncertainty
•Certainty of Agreements
•General Rule
–Per Viscount Maugham in Scammell etc v Oughton [1941] AC 251
–Parties must so express themselves that their meaning can be determined with a reasonable degree of certainty
–Otherwise consensus ad idem would be a matter of mere conjecture
–However, the general rule applies somewhat differently in different cases
•Cf. per Lord Wright in Hillas etc v Arcos Ltd [1932] 147 LT 503
–In big forward contracts for future goods over a period, in general it is impossible to specify in advance all the details of a complicated performance
•Certainty of Agreements
•Thus, courts do not insist on absolute certainty
•Instead, “a reasonable degree of certainty” is required
•However, the requirement of “ a reasonable degree of certainty” could result in apparent inconsistency
•Certainty of Agreements
•May & Butcher v R [1934] 2 KB 17
–Defts/British govt contracted to sell tentage to clmt
–Price and date of payment to be agreed upon from time to time
–Held: there was no contract because of the lack of agreement on price and date of payment
–Note: see further the speeches of Lords Buckmaster & Dunedin
•Certainty of Agreements
•Scammell etc v Oughton [1941] AC 251
–Resps agreed to buy new lorry from applts
–Old lorry to be traded in and balance of purchase price to be paid “on hire-purchase”
–Terms of hire-purchase never finalised
–Applts subsequently refused to go ahead with the arrangement
–Held: bearing in mind the uncertainty about what the parties meant by “hire-purchase terms”, which 5 judges and counsel were not even able to agree upon, it was impossible to conclude that a binding contract had been established between the parties
•Certainty of Agreements
•Cf. Hillas etc v Arcos Ltd [1932] 147 LT 503
–May 1930, clmts agreed to buy from defts, “22,000 standards of softwood goods of fair specification”
–Agreement stated further that clmts had an “option of entering into a contract with the sellers for the purchase of 100,000 standards for delivery during 1931”.
–Clmts sought to exercise the option but defts had already sold out to a 3rd party
–Defts argued that the option clause was too uncertain and could not be enforced
–Held: that the option was binding; that at the least, the words “of softwood goods” must inevitably be implied in addition to “100,000 standards” and that indeed the words “of softwood goods of fair specification” must necessarily be implied after “100,000 standards”.
•Certainty of Agreements
•Thus, because of reluctance to hold that there is no contract (due to uncertainty) the court may find ways to hold that an agreement or clause is not so vague as to render the contract invalid
•For example, use of custom/trade usage to determine meaning of a particular phrase; severance of a vague/uncertain clause that is meaningless and not material
•Nicolene Ltd v. Simmonds [1953] 1 QB 543
–Clmt’s statement, in his acceptance, “I assume that .. the usual conditions of acceptance apply” when there were no “usual conditions” held to be meaningless and severable, with the rest of the agreement remaining valid
•Certainty of Agreements
•Agreements to negotiate/to agree – likely to be regarded as not binding
•Courtney Fairbairn Ltd v Tolani Bros et
–C agreed to find and introduce a financier for a site that T wanted to develop
–In return, T would engage C for construction work (on 3 projects)
–C wrote that if financial arrangements were reached with the financiers (to be introduced), C would instruct his quantity surveyor to negotiate fair and reasonable contract sums for the intended construction work
–C introduced a financier and instructed his surveyor to enter into negotiations for the construction work; the negotiations broke down
–C sued T, arguing that there was an enforceable contract to engage C as builders/constructors
–Held: there was no binding contract
–There was no agreement on the price or on any method by which the price was to be calculated; the agreement was only an agreement to “negotiate” fair and reasonable contract sums
–It might have been different if they had left the price to be determined by a third party such as an arbitrator
•Certainty of Agreements
•With regard to future agreement on the price, see
•S. 8 of the Sale of Goods Act 1979
•S.15 of the Supply of Goods & Services Act 1982
•Note: these provisions apply only where either the contract is totally silent as to the price or where there is a mechanism for fixing the price not dependent upon the parties’ (future) agreement; see also again May & Butcher v R
•Acceptance (in unilateral contracts) made by performing required act – even, possibly, without giving notice
–e.g. Carlill v Carbolic Smoke Ball co.
•Question: when can an offer be revoked in a unilateral contract; consider a situation where the offeree had already started the act of acceptance
•Traditional position: that there must be full performance before acceptance is complete
–Per Brett J in Great Northern Rly. Co. v Witham (1873) LR 9 CP 16, 19 (if A offers B £100 to walk to York, A could revoke at any time before B reached York)
–Luxor (Eastbourne) Ltd v Cooper [1941] AC 108 (estate agent found buyer for 2 cinemas; principal refused to sell to buyers; held agent not entitled to the commission of £10,000)
•Acceptance and Revocation in Unilateral Contracts
•Cf. implication of term, in respect of a unilateral contract, that the offeror should not do anything that prevents the offeree from completing the act of acceptance
• Errington v Errington & Woods [1952] 1 KB 290
–Father promised son and d-i-l that if the couple kept up repayments on father’s house, the house will be transferred to them
–Couple began the repayments (though without promising so to the father)
–Father died and his PRs tried to revoke the agreement
–Held: Father’s promise was a unilateral offer; and it could not be revoked once the couple started the repayments
•Acceptance and Revocation in Unilateral Contracts
•Daulia v Four Mill Bank Nominees Ltd [1978] Ch 231
–Clmt wished to purchase some property
–Told by defts to show up next day with banker’s draft for deposit and signed/engrossed contract and defts would exchange contracts
–Clmt did so but defts refused to exchange contracts because they had found a buyer for a higher price
–Held: this was a unilateral offer and clmt had fully performed/satisfied the condition
–Note per Goff LJ that while offeror in a unilateral contract is entitled to require full performance, that must be subject to the important qualification that there must be an implied obligation that the offeror will not prevent the performance by the offeree and this obligation arises as soon as the offeree starts to perform.
•Certainty of Agreements
•Courts do not make agreements for the parties; parties themselves do
•Hence, agreement must be expressed in a sufficiently certain manner
•However, courts reluctant to hold that there is no contract simply because of some uncertainty
•Certainty of Agreements
•General Rule
–Per Viscount Maugham in Scammell etc v Oughton [1941] AC 251
–Parties must so express themselves that their meaning can be determined with a reasonable degree of certainty
–Otherwise consensus ad idem would be a matter of mere conjecture
–However, the general rule applies somewhat differently in different cases
•Cf. per Lord Wright in Hillas etc v Arcos Ltd [1932] 147 LT 503
–In big forward contracts for future goods over a period, in general it is impossible to specify in advance all the details of a complicated performance
•Certainty of Agreements
•Thus, courts do not insist on absolute certainty
•Instead, “a reasonable degree of certainty” is required
•However, the requirement of “ a reasonable degree of certainty” could result in apparent inconsistency
•Certainty of Agreements
•May & Butcher v R [1934] 2 KB 17
–Defts/British govt contracted to sell tentage to clmt
–Price and date of payment to be agreed upon from time to time
–Held: there was no contract because of the lack of agreement on price and date of payment
–Note: see further the speeches of Lords Buckmaster & Dunedin
•Certainty of Agreements
•Scammell etc v Oughton [1941] AC 251
–Resps agreed to buy new lorry from applts
–Old lorry to be traded in and balance of purchase price to be paid “on hire-purchase”
–Terms of hire-purchase never finalised
–Applts subsequently refused to go ahead with the arrangement
–Held: bearing in mind the uncertainty about what the parties meant by “hire-purchase terms”, which 5 judges and counsel were not even able to agree upon, it was impossible to conclude that a binding contract had been established between the parties
•Certainty of Agreements
•Cf. Hillas etc v Arcos Ltd [1932] 147 LT 503
–May 1930, clmts agreed to buy from defts, “22,000 standards of softwood goods of fair specification”
–Agreement stated further that clmts had an “option of entering into a contract with the sellers for the purchase of 100,000 standards for delivery during 1931”.
–Clmts sought to exercise the option but defts had already sold out to a 3rd party
–Defts argued that the option clause was too uncertain and could not be enforced
–Held: that the option was binding; that at the least, the words “of softwood goods” must inevitably be implied in addition to “100,000 standards” and that indeed the words “of softwood goods of fair specification” must necessarily be implied after “100,000 standards”.
•Certainty of Agreements
•Thus, because of reluctance to hold that there is no contract (due to uncertainty) the court may find ways to hold that an agreement or clause is not so vague as to render the contract invalid
•For example, use of custom/trade usage to determine meaning of a particular phrase; severance of a vague/uncertain clause that is meaningless and not material
•Nicolene Ltd v. Simmonds [1953] 1 QB 543
–Clmt’s statement, in his acceptance, “I assume that .. the usual conditions of acceptance apply” when there were no “usual conditions” held to be meaningless and severable, with the rest of the agreement remaining valid
•Certainty of Agreements
•Agreements to negotiate/to agree – likely to be regarded as not binding
•Courtney Fairbairn Ltd v Tolani Bros et
–C agreed to find and introduce a financier for a site that T wanted to develop
–In return, T would engage C for construction work (on 3 projects)
–C wrote that if financial arrangements were reached with the financiers (to be introduced), C would instruct his quantity surveyor to negotiate fair and reasonable contract sums for the intended construction work
–C introduced a financier and instructed his surveyor to enter into negotiations for the construction work; the negotiations broke down
–C sued T, arguing that there was an enforceable contract to engage C as builders/constructors
–Held: there was no binding contract
–There was no agreement on the price or on any method by which the price was to be calculated; the agreement was only an agreement to “negotiate” fair and reasonable contract sums
–It might have been different if they had left the price to be determined by a third party such as an arbitrator
•Certainty of Agreements
•With regard to future agreement on the price, see
•S. 8 of the Sale of Goods Act 1979
•S.15 of the Supply of Goods & Services Act 1982
•Note: these provisions apply only where either the contract is totally silent as to the price or where there is a mechanism for fixing the price not dependent upon the parties’ (future) agreement; see also again May & Butcher v R
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