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) . 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).
However, as Lord Denning's approach in the Court of Appeal was firmly
rejected by the House of Lords in Gibson v ManchesterCityCouncil
(1979), it is submitted that these dicta do not represent the
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
Usually in contract law, advertisements are not considered to be
offers, but are invitations to treat Partridge v Crittenden (1968) .
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
behind this distinction is clear to see, as construing advertisements
as offers would bind advertisers potentially into legal contracts with
anyone who accepted the offer, i.e. Grainger & Son v Gough (1896) .
In effect, adverts would be offers to the entire world, as established
in the case of Carlii v The Carbolic Smokeball Co. Ltd (1893),
which would lead to potentially unlimited contractual liability. It is
submitted in the age of the Internet, such an interpretation is even
It is submitted that there is nothing in this advert to suggest that
there is anything in this advert, to rebut the normal presumption that
this is an invitation to treat. However, this is clearly that there
was only one car for sale; there is nothing in the advert to indicate
that Rob intended to be bound by the first offer he received.
3. Offer by telephone by Rob
As such, Tom offered to buy the car for Â£4,500, an offer that was
rejected by Rob. However, he made a specific offer in reply that was
capable of acceptance, namely that he would accept Â£5,000 from Tom and
that Tom should respond by Wednesday...