AB1301&BUSINESS&LAW&|&RETCONED&BY!SAMUEL!WYSTAN!TAN&
CHAPTERS!3!&!4! ELEMENTS!WHICH!FORM!A!CONTRACT! ! ! ! !
!
CONTRACTS! !
! Agreement&giving&rise&to&obligations,&which&are&binding&and&enforceable&by&law.&
Nature/!Type!of!
! 4&Elements&of&formation&of&contracts&=&Offer,&Acceptance,&Consideration,&Intention&to&Create&Legal&Relations.&
Contracts!
! Simple&Contracts&
(p58)!
o Oral&(Parol)&Contracts&
o Written&Contracts&
! Parol!Evidence!Rule:&Parol&evidence&will¬&be&admitted&in&a&court&action&to&add&to,&vary,&or&
amend&or&contradict&a&written&contract.&&
! In&Singapore,&this&rule&is&codified&by&s93M94!Evidence!Act&(p61)&
!
OFFER!
Define!
An&offer&is&an&expression&made&by&an&offeror&to&an&offeree,&communicating&the&offeror’s&willingness&to&perform&
(p63)!
!
a&promise.&The&intention&is&that,&if&the&offeree&accepts&the&offer,&there&will&be&a&binding&agreement&between&
them.&
Contract!
Bilateral!
! Offeror&makes&an&offer&to&a&known&offeree.&
(p63)!
! Parties&would&know&each&other’s&identity&as&there&is&an&exchange&of&promises.&
! Upon&the&offeree’s&effective&acceptance&(by&words&or&action),&a&bilateral&contract&would&be&formed&and&both&
parties&will&be&bound&by&the&contract.&
! Offeror&makes&an&offer&to&the&world&and&is&open&for&anyone&to&accept&it.&
! Offeror&may¬&know&the&offeree’s&identity&immediately&as&there&is&no&exchange&of&promises.&
Unilateral!Contracts!(p63)!
! Only&offeror&makes&a&conditional&promise,&the&offeree&makes&no&promise&but&performs&the&condition&attached&
to&the&offeror’s&promise.&
! Upon&the&offeree’s&performance&of&that&condition,&a&unilateral&contract&would&be&formed.&
C A R LILL!V !C A R B O LIC !SM O K E!BA LL!C O .!(1892) &Carbolic&Smoke&Ball&Co.&advertised&their&product&saying&they&will&
pay&£100&to&any&person&who&contracted&influenza&after&using&their&product&despite&following&instructions.&Carlill&
used&the&product&and&caught&a&flu&despite&following&instructions.&
Held:&She&was&entitled&to&the&£100.&Although&the&offer&is&made&to&the&world,&the&contract&is&made&with&that&
limited&portion&of&the&public&who&came&forward&to&perform&the&condition&on&the&faith&of&the&ad.&
! Upon&the&offeree’s&performance&of&that&condition,&a&unilateral&contract&would&be&formed.&Hence,&both&parties&
will&be&bound&by&the&contract.&
! Generally,&advertisements,&catalogues&and&price&lists&are®arded&as&invitations&to&treat&but&do¬&constitute&
an&offer.&
! At&law,&an&Invitation&to&treat&=&Invitation&to&commence&negotiations.&It&is&an&invitation&to&make&an&offer.&
- Advertisements&usually&lack&details&for&the&buyer&to&go&into&a&contract.&Without&specific&information&
Invitation!to!Treat!(p64)!
about&the&item,&no&buyer&will&be&willing&to&be&bound&by&it.&
- There&is&no&intention&for&the&advertiser&to&be&bound,&due&to&the&practical&reasons&of&limited&stock.&
Unless&the&seller&has&the&ability&to&produce&the&stock&to&meet&the&requirements&of&potential&buyers,&the&
advertiser&would¬&be&willing&to&be&bound&by&its&advertisement.&
P A TR ID G E!V !C R ITTEN D EN !(19 68 ) !Patridge&paid&for&an&advertisement&in&a&magazine&stating&to&sell&wild&birds&and&
was&sued&for&selling&live&wild&birds&contrary&to&the&prevailing&legislation.&
Held:!There&was&no&“offer&for&sale”&as&the&advertisement&is&merely&an&invitation&to&treat.&Therefore&the&relevant&
legislation&was¬&contravened.&
! Since&there&is&no&intention&of&the&seller&to&form&a&binding&agreement&at&the&point&of&time,&it&is&considered&as&an&
invitation&to&treat.&Hence,&acceptance&of&an&invitation&to&treat&does¬&lead&to&a&legally&binding&contract.&
1&
&
, AB1301&BUSINESS&LAW&|&RETCONED&BY!SAMUEL!WYSTAN!TAN&
! Display&of&goods&and&prices&in&a&shop&is&usually&considered&to&be&an&invitation&to&treat&as&well.&
- If&displaying&of&goods&and&prices&are&considered&as&an&offer,&any&person&who&picks&up&the&item&would&
show&his/her&interest&in&the&item.&This&would&amount&to&an&acceptance&and&a&contract&would&be&
formed.&In&this&case,&no&buyer&would&be&willing&to&touch&the&item&as&it&would&lead&to&a&binding&contract.&
P H A R M A C EU TIC A L!SO C IETY!O F!G R EA T!BR ITA IN !V !BO O T S!C A SH !CH EM ISTS!(SO U T H ER N )!LT D !(1 952) &Boots&operated&
self^service&chemist&shops,&where&customers&pick&up&the&items&and&proceed&to&pay&at&the&cashier.&The&issue&was&
whether&Boots&had&contravened&a&statute,&which&prohibited&the&sale&of&poisons&“unless&the&sale&is&effected&
under&the&supervision&of&a®istered&pharmacist”.&
Held:!The&display&of&goods&with&prices&constituted&an&invitation&to&treat&and&the&sale&took&place&at&the&counter&
in&the&presence&of&the&pharmacist.&Hence&Boots&did¬&contravene&the&statute.&
! Since&there&is&no&intention&of&the&seller&to&form&a&binding&agreement&at&the&point&of&time,&it&is&considered&as&an&
invitation&to&treat.&Hence,&acceptance&of&an&invitation&to&treat&does¬&lead&to&a&legally&binding&contract.&
! Under&the&new&s14!of!ETA!2010,&the&default&rule&for&the&placement&of&internet&orders&is&considered&to&be&an&
!Invitation!to!Treat!(p64)&
invitation&to&treat.!
- Unless&the&offeror&makes&it&clear&that&he&intends&to&be&bound&by&it.&(Loose&language&etc.)!
- Hence&by&acceptance&to&the&internet&order,&no&legally&binding&contract&is&formed.!!
C H W EE!KIN !KEO N G ! & !O TH ER S!V !D IG ILA N D M A LL!(20 04) ! !
! !
! Under&s15!of!ETA,&Court&leans&in&favor&of&the&General&Receipt&Rule&as&the&default&rule&for&cyberspace&contracts.&
– Contract&is&only&formed&when&the&email&is&retrieved&by&the&recipient.&&
&
! Under&s57!(2)!Sale!of!Goods!Act,&for&Auctions&and&Tenders:&Display&of&goods/services,&auctioneer&inviting&bids.&&
– Offers&are&bids&made&by&audience.&Acceptance&happens&when&Auctioneer&indicates&bid&accepted.&
! A&mere&response&to&a&request&for&information&does¬&constitute&an&offer.&
Information!
Provision!of!
- The&party&responding&has&no&intention&to&get&into&an&agreement&upon&providing&the&information.&
(p67)!
H A RV EY!V !FA CEY!(1893 ) &Harvey&requested&for&the&lowest"ed&price&of&a&piece&of&property&and&Facey&
replied.&Harvey&proceeded&to&“accept”&the&price&and&no&further&communication&was&made.&
Held:&The&provision&of&information&was¬&an&offer.&Hence&there&is&no&contract.&
!
ACCEPTANCE!
Definition!(p67)!
! An!acceptance!is!a!final!and!unconditional!assent!to!all!of!the!terms!in!the!offer.!
- Can&be&made&in&writing/orally&(expressed&acceptance)&
- Can&be&made&by&conduct&(implied&acceptance)&
! Due&to&the&above&definition,&the&following&are¬&acceptances:&
- Counter^offer&
- Conditional&acceptance,&or&acceptance&‘subjected&to&contract’&etc.&
! As&long&as&offeree&has&knowledge&of&offer,&his&motive&for&the&acceptance&is&irrelevant.&It&does¬&matter&that&he&
was&prompted&to&act&for&reasons&other&than&the&desire&to&accept&the&offer.&
Knowledge!of!Offer!(p68)!
&
W ILLIA M !V !C A R W A R D IN E!(1833) &The&court&held&that&the&plaintiff&was&entitled&to&a&reward&because&when&giving&the&
information&sought&by&the&police,&she&had&done&so&with&knowledge&of&the&reward&even&though&her&motive&for&
giving&the&information&was&her&own&remorse.&
! Cross^offers&do¬&make&a&contract.&
- There&is&a&lack&of&consensus&or&meeting&of&minds&between&the&parties&at&the&time&of&making&the&offers.&&
- If&A&offers&to&sell&her&book&to&B&for&$10&and&B&offers&to&buy&from&A&the&book&for&$10.&Their&letters&crossed&
in&the&mail.&Here,&A&is¬&bound&to&sell&her&book&to&B.&
TIN N !V !H O FFM A N !& !C O !(1873) &The&court&held&that&the&cross^offer&did¬&make&a&contract.&
2&
&
, AB1301&BUSINESS&LAW&|&RETCONED&BY!SAMUEL!WYSTAN!TAN&
General!Rule!
! For!an!acceptance!to!be!effective,!it!must!be!communicated!to!the!offeror.&If&in&writing,&it&must&be&
physically&received&by&the&offeree,&and&if&orally,&heard&by&the&offeree.!
!
O BITER !D ICTU M !IN !EN T O R ES!LTD !V !M ILES!FA R !EA ST!C O R P O R A TIO N !(19 55) ! !
Waiver!of!Communication!
! Facts&show&that&the&offeror&has&waived&the&need&for&communication&of&acceptance.&
- Case&where&the&offer&is&made&to&the&whole&world.&
- In&such&a&situation,&the&act&by&the&offeree&may&itself&be&construed&as&acceptance,&without&
requiring&formal&communication&to&the&offeror.&
&
C A R LILL!V !C A R B O LIC !SM O K E!BA LL!C O .!(1892)! !!
Held:!There&was&no&requirement&for&Carlill&to&communicate&her&acceptance&of&offer.&Her&very&
Communication!of!Acceptance!(p69)!
act&of&using&the&Carbolic&Smoke&Ball&as&instructed&constitutes&acceptance&and&she&was&entitled&
to&the&£100.&
&
Silence!!
Exceptions!
! If&the&offeror&imposes&silence&to&be&construed&as&acceptance&and&the&offeree&did¬&consent&to&it,&then&
the&offeree’s&silence&is¬&enforceable.&
&
FELTH O U SE!V !BIN D LEY!(1862) !Felthouse&wrote&to&Bindley&to&make&an&offer&to&buy&his&horse.&In&the&letter,&
&
he&added&that&upon¬&hearing&any&more&from&him,&the&horse&will&be&considered&as&Felthouse’s.&&
Held:&There&was&no&contract&between&the&two&parties.&The&plaintiff&had&no&right&to&impose&a&condition&
that&a&sale&contract&would&come&into&existence&if&the&defendant&remained&silent.&
! When& the& parties& agree& that& the& offeree& would& have& a& positive& obligation& to& communicate& only& if& he&
wishes&to&reject&the&offer,&silence&would&be&construed&as&acceptance:&
&
SO U T H ER N !O C EA N !SH IP BU ILD IN G !C O !LT D !V !D EU TSC H E!BA N K!A G !(1993) &
M ID LIN K ! D EV ELO P M EN T! P TE! LTD ! V ! TH E! STA N SFIELD ! G R O U P ! PT E! LT D ! (2004) ! Defendant& leased& premises&
from&Plaintiff&landlord.&Defendant&did¬&sign&a&written&agreement&but&continued&to&pay&the&lower&rent&
and& then& tried& to& terminate& the& lease& on& the& ground& that& there& was& no& binding& tenancy& agreement.&
Held:!There&was&effective&oral&contract&despite&the&purported&‘silence’&inactivity&after&offer.&The&conduct&
of&paying&reduced&rent&showed&that&a&contract&exists.&
!
3&
&
, AB1301&BUSINESS&LAW&|&RETCONED&BY!SAMUEL!WYSTAN!TAN&
The!Postal!Acceptance!Rule!
! The&acceptance&is&deemed&to&be&effective&as&soon&as&the&letter&is&posted,®ardless&as&to&when&it&
reaches&the&offeror&or&whether&it&reaches&him&at&all.&
A D A M S!V !LIN D SELL!(1818) &A&wool^dealer&wrote&to&a&woolen&manufacturer&offering&to&sell&wool.&The&
manufacturer&posted&a&letter&of&acceptance&which&reached&the&wool^dealer.&However,&the&wool^dealer&
&
sold&the&wool&to&someone&else&a&day&before&receiving&the&letter&of&acceptance.&
Held:&Acceptance&was&communicated&and&the&contract&was&formed&as&soon&as&the&plaintiff&posted&the&
acceptance&letter.&
! However,&the&postal&rule&applies&only&in&circumstances&where&it&is&clear&that&parties&agree&that&
acceptance&should&be&sent&by&post.&
Communication!of!Acceptance!(p69)!
&
! When&an&offer&is&sent&by&telegram,&we&can&presume&that&the&offeror&wants&a&speedy&reply.&If&an&
acceptance&was&subsequently&made&by&post,&it&would¬&attract&the&postal&rule&and&the&general&rule&
applies&and&acceptance&occurs&only&when&the&posted&letter&is&actually&received.&!!
Q U EN ER D U A IN E!V !C O LE!(1883) &
Exceptions!
! To&avoid&the&application&of&postal&rule,&offerors&often&stipulate&that&acceptance&is¬&valid&until&
physically&received&by&the&offeror.&In&this&way,&offeror&overrides&postal&rule&and&general&rule&applies.&
Instantaneous!Communications!
! For&the&case&of&instantaneous&communications&proper,&such&as&a&telephone&call,&communication&
between&parties&is&instantaneous&in&its&fullest&sense.&
- As&such,&it&would&be&identical&to&making&an&oral&contract&face^to^face.&Hence&the&general&rule&
applies&here.&(Acceptance&effective&when&heard&by&offeror)&
&
! For&the&case&of&near^instantaneous&communications,&such&as&telex&or&instant&messaging&over&the&
internet,&
- Both&parties&respond&to&each&other&in&real&time.&As&such,&it&would&be&identical&to&making&an&oral&
contract&face^to^face,&except&that&their&“conversation”&is&made&on&a&written&form.&Hence,&the&
general&rule&applies&here.&
EN TO R ES!LTD !V !M ILES!FA R !EA ST !C O R P .!(1955) !Telex&was&used&to&make&a&contract&between&the&two&
parties.&The&court&had&to&decide&where&the&contract&was&made.&
Held:!The&contract&was&made&when&the&communication&is&actually&received.&The&general&rule&applies&and&
the&contract&was&made&in&London&where&the&telex&was&received.&
&
! For&the&case&of&instantaneous&transmission&but¬&instantaneous&communication,&such&as&emails,&
facsimile&or&voice&mail,&&
- Since&the&offeror&may¬&be&manning&the&receiving&equipment&all&the&time,&the&offeror&may¬&
Communication!of!Acceptance!(p69)!
be&immediately&aware&of&the&acceptance.&
New!s13!ETA!2010!determines&the&time&of&receipt&of&an&email&
- If&there&is&a&designated&electronic&address,&time&of&receipt&is&when&email&becomes&capable&to&
Exceptions!
being&retrieved&by&the&recipient.&(Postal&rule&applies)&
- If&there&is&no&designated&electronic&address&or&email&is&sent&to&a&non^designated&one,&time&of&
receipt&is&when&the&email&becomes&capable&of&being&retrieved&by&the&recipient&at&that&address&
and&he&becomes&aware&that&the&email&has&been&sent&to&that&address.&(General&rule&applies)&
Note:&the&scope&of&the&ETA&does¬®ulate&that&a&contract&is&formed.&It&merely&determines&the&time&of&receipt,¬&the&time&of&
acceptance.&Hence&there&is&still&a&need&to&use&contract&law&to&determine&whether&the&receipt&is&a&form&of&acceptance&or¬.&
! Under&the&new&s15!ETA&2010,&an&electronic&record&is&deemed&sent&by&the&sender&if&it&is&sent&by&the&
sender&himself,&someone&authorized&by&him&or&by&an&information&system&programmed&by&or&on&behalf&of&
the&sender&to&operate&automatically.!
C H W EE!K IN !K EO N G !V !D IG ILA N D M A LL!(2004) !
!
!
4&
&
CHAPTERS!3!&!4! ELEMENTS!WHICH!FORM!A!CONTRACT! ! ! ! !
!
CONTRACTS! !
! Agreement&giving&rise&to&obligations,&which&are&binding&and&enforceable&by&law.&
Nature/!Type!of!
! 4&Elements&of&formation&of&contracts&=&Offer,&Acceptance,&Consideration,&Intention&to&Create&Legal&Relations.&
Contracts!
! Simple&Contracts&
(p58)!
o Oral&(Parol)&Contracts&
o Written&Contracts&
! Parol!Evidence!Rule:&Parol&evidence&will¬&be&admitted&in&a&court&action&to&add&to,&vary,&or&
amend&or&contradict&a&written&contract.&&
! In&Singapore,&this&rule&is&codified&by&s93M94!Evidence!Act&(p61)&
!
OFFER!
Define!
An&offer&is&an&expression&made&by&an&offeror&to&an&offeree,&communicating&the&offeror’s&willingness&to&perform&
(p63)!
!
a&promise.&The&intention&is&that,&if&the&offeree&accepts&the&offer,&there&will&be&a&binding&agreement&between&
them.&
Contract!
Bilateral!
! Offeror&makes&an&offer&to&a&known&offeree.&
(p63)!
! Parties&would&know&each&other’s&identity&as&there&is&an&exchange&of&promises.&
! Upon&the&offeree’s&effective&acceptance&(by&words&or&action),&a&bilateral&contract&would&be&formed&and&both&
parties&will&be&bound&by&the&contract.&
! Offeror&makes&an&offer&to&the&world&and&is&open&for&anyone&to&accept&it.&
! Offeror&may¬&know&the&offeree’s&identity&immediately&as&there&is&no&exchange&of&promises.&
Unilateral!Contracts!(p63)!
! Only&offeror&makes&a&conditional&promise,&the&offeree&makes&no&promise&but&performs&the&condition&attached&
to&the&offeror’s&promise.&
! Upon&the&offeree’s&performance&of&that&condition,&a&unilateral&contract&would&be&formed.&
C A R LILL!V !C A R B O LIC !SM O K E!BA LL!C O .!(1892) &Carbolic&Smoke&Ball&Co.&advertised&their&product&saying&they&will&
pay&£100&to&any&person&who&contracted&influenza&after&using&their&product&despite&following&instructions.&Carlill&
used&the&product&and&caught&a&flu&despite&following&instructions.&
Held:&She&was&entitled&to&the&£100.&Although&the&offer&is&made&to&the&world,&the&contract&is&made&with&that&
limited&portion&of&the&public&who&came&forward&to&perform&the&condition&on&the&faith&of&the&ad.&
! Upon&the&offeree’s&performance&of&that&condition,&a&unilateral&contract&would&be&formed.&Hence,&both&parties&
will&be&bound&by&the&contract.&
! Generally,&advertisements,&catalogues&and&price&lists&are®arded&as&invitations&to&treat&but&do¬&constitute&
an&offer.&
! At&law,&an&Invitation&to&treat&=&Invitation&to&commence&negotiations.&It&is&an&invitation&to&make&an&offer.&
- Advertisements&usually&lack&details&for&the&buyer&to&go&into&a&contract.&Without&specific&information&
Invitation!to!Treat!(p64)!
about&the&item,&no&buyer&will&be&willing&to&be&bound&by&it.&
- There&is&no&intention&for&the&advertiser&to&be&bound,&due&to&the&practical&reasons&of&limited&stock.&
Unless&the&seller&has&the&ability&to&produce&the&stock&to&meet&the&requirements&of&potential&buyers,&the&
advertiser&would¬&be&willing&to&be&bound&by&its&advertisement.&
P A TR ID G E!V !C R ITTEN D EN !(19 68 ) !Patridge&paid&for&an&advertisement&in&a&magazine&stating&to&sell&wild&birds&and&
was&sued&for&selling&live&wild&birds&contrary&to&the&prevailing&legislation.&
Held:!There&was&no&“offer&for&sale”&as&the&advertisement&is&merely&an&invitation&to&treat.&Therefore&the&relevant&
legislation&was¬&contravened.&
! Since&there&is&no&intention&of&the&seller&to&form&a&binding&agreement&at&the&point&of&time,&it&is&considered&as&an&
invitation&to&treat.&Hence,&acceptance&of&an&invitation&to&treat&does¬&lead&to&a&legally&binding&contract.&
1&
&
, AB1301&BUSINESS&LAW&|&RETCONED&BY!SAMUEL!WYSTAN!TAN&
! Display&of&goods&and&prices&in&a&shop&is&usually&considered&to&be&an&invitation&to&treat&as&well.&
- If&displaying&of&goods&and&prices&are&considered&as&an&offer,&any&person&who&picks&up&the&item&would&
show&his/her&interest&in&the&item.&This&would&amount&to&an&acceptance&and&a&contract&would&be&
formed.&In&this&case,&no&buyer&would&be&willing&to&touch&the&item&as&it&would&lead&to&a&binding&contract.&
P H A R M A C EU TIC A L!SO C IETY!O F!G R EA T!BR ITA IN !V !BO O T S!C A SH !CH EM ISTS!(SO U T H ER N )!LT D !(1 952) &Boots&operated&
self^service&chemist&shops,&where&customers&pick&up&the&items&and&proceed&to&pay&at&the&cashier.&The&issue&was&
whether&Boots&had&contravened&a&statute,&which&prohibited&the&sale&of&poisons&“unless&the&sale&is&effected&
under&the&supervision&of&a®istered&pharmacist”.&
Held:!The&display&of&goods&with&prices&constituted&an&invitation&to&treat&and&the&sale&took&place&at&the&counter&
in&the&presence&of&the&pharmacist.&Hence&Boots&did¬&contravene&the&statute.&
! Since&there&is&no&intention&of&the&seller&to&form&a&binding&agreement&at&the&point&of&time,&it&is&considered&as&an&
invitation&to&treat.&Hence,&acceptance&of&an&invitation&to&treat&does¬&lead&to&a&legally&binding&contract.&
! Under&the&new&s14!of!ETA!2010,&the&default&rule&for&the&placement&of&internet&orders&is&considered&to&be&an&
!Invitation!to!Treat!(p64)&
invitation&to&treat.!
- Unless&the&offeror&makes&it&clear&that&he&intends&to&be&bound&by&it.&(Loose&language&etc.)!
- Hence&by&acceptance&to&the&internet&order,&no&legally&binding&contract&is&formed.!!
C H W EE!KIN !KEO N G ! & !O TH ER S!V !D IG ILA N D M A LL!(20 04) ! !
! !
! Under&s15!of!ETA,&Court&leans&in&favor&of&the&General&Receipt&Rule&as&the&default&rule&for&cyberspace&contracts.&
– Contract&is&only&formed&when&the&email&is&retrieved&by&the&recipient.&&
&
! Under&s57!(2)!Sale!of!Goods!Act,&for&Auctions&and&Tenders:&Display&of&goods/services,&auctioneer&inviting&bids.&&
– Offers&are&bids&made&by&audience.&Acceptance&happens&when&Auctioneer&indicates&bid&accepted.&
! A&mere&response&to&a&request&for&information&does¬&constitute&an&offer.&
Information!
Provision!of!
- The&party&responding&has&no&intention&to&get&into&an&agreement&upon&providing&the&information.&
(p67)!
H A RV EY!V !FA CEY!(1893 ) &Harvey&requested&for&the&lowest"ed&price&of&a&piece&of&property&and&Facey&
replied.&Harvey&proceeded&to&“accept”&the&price&and&no&further&communication&was&made.&
Held:&The&provision&of&information&was¬&an&offer.&Hence&there&is&no&contract.&
!
ACCEPTANCE!
Definition!(p67)!
! An!acceptance!is!a!final!and!unconditional!assent!to!all!of!the!terms!in!the!offer.!
- Can&be&made&in&writing/orally&(expressed&acceptance)&
- Can&be&made&by&conduct&(implied&acceptance)&
! Due&to&the&above&definition,&the&following&are¬&acceptances:&
- Counter^offer&
- Conditional&acceptance,&or&acceptance&‘subjected&to&contract’&etc.&
! As&long&as&offeree&has&knowledge&of&offer,&his&motive&for&the&acceptance&is&irrelevant.&It&does¬&matter&that&he&
was&prompted&to&act&for&reasons&other&than&the&desire&to&accept&the&offer.&
Knowledge!of!Offer!(p68)!
&
W ILLIA M !V !C A R W A R D IN E!(1833) &The&court&held&that&the&plaintiff&was&entitled&to&a&reward&because&when&giving&the&
information&sought&by&the&police,&she&had&done&so&with&knowledge&of&the&reward&even&though&her&motive&for&
giving&the&information&was&her&own&remorse.&
! Cross^offers&do¬&make&a&contract.&
- There&is&a&lack&of&consensus&or&meeting&of&minds&between&the&parties&at&the&time&of&making&the&offers.&&
- If&A&offers&to&sell&her&book&to&B&for&$10&and&B&offers&to&buy&from&A&the&book&for&$10.&Their&letters&crossed&
in&the&mail.&Here,&A&is¬&bound&to&sell&her&book&to&B.&
TIN N !V !H O FFM A N !& !C O !(1873) &The&court&held&that&the&cross^offer&did¬&make&a&contract.&
2&
&
, AB1301&BUSINESS&LAW&|&RETCONED&BY!SAMUEL!WYSTAN!TAN&
General!Rule!
! For!an!acceptance!to!be!effective,!it!must!be!communicated!to!the!offeror.&If&in&writing,&it&must&be&
physically&received&by&the&offeree,&and&if&orally,&heard&by&the&offeree.!
!
O BITER !D ICTU M !IN !EN T O R ES!LTD !V !M ILES!FA R !EA ST!C O R P O R A TIO N !(19 55) ! !
Waiver!of!Communication!
! Facts&show&that&the&offeror&has&waived&the&need&for&communication&of&acceptance.&
- Case&where&the&offer&is&made&to&the&whole&world.&
- In&such&a&situation,&the&act&by&the&offeree&may&itself&be&construed&as&acceptance,&without&
requiring&formal&communication&to&the&offeror.&
&
C A R LILL!V !C A R B O LIC !SM O K E!BA LL!C O .!(1892)! !!
Held:!There&was&no&requirement&for&Carlill&to&communicate&her&acceptance&of&offer.&Her&very&
Communication!of!Acceptance!(p69)!
act&of&using&the&Carbolic&Smoke&Ball&as&instructed&constitutes&acceptance&and&she&was&entitled&
to&the&£100.&
&
Silence!!
Exceptions!
! If&the&offeror&imposes&silence&to&be&construed&as&acceptance&and&the&offeree&did¬&consent&to&it,&then&
the&offeree’s&silence&is¬&enforceable.&
&
FELTH O U SE!V !BIN D LEY!(1862) !Felthouse&wrote&to&Bindley&to&make&an&offer&to&buy&his&horse.&In&the&letter,&
&
he&added&that&upon¬&hearing&any&more&from&him,&the&horse&will&be&considered&as&Felthouse’s.&&
Held:&There&was&no&contract&between&the&two&parties.&The&plaintiff&had&no&right&to&impose&a&condition&
that&a&sale&contract&would&come&into&existence&if&the&defendant&remained&silent.&
! When& the& parties& agree& that& the& offeree& would& have& a& positive& obligation& to& communicate& only& if& he&
wishes&to&reject&the&offer,&silence&would&be&construed&as&acceptance:&
&
SO U T H ER N !O C EA N !SH IP BU ILD IN G !C O !LT D !V !D EU TSC H E!BA N K!A G !(1993) &
M ID LIN K ! D EV ELO P M EN T! P TE! LTD ! V ! TH E! STA N SFIELD ! G R O U P ! PT E! LT D ! (2004) ! Defendant& leased& premises&
from&Plaintiff&landlord.&Defendant&did¬&sign&a&written&agreement&but&continued&to&pay&the&lower&rent&
and& then& tried& to& terminate& the& lease& on& the& ground& that& there& was& no& binding& tenancy& agreement.&
Held:!There&was&effective&oral&contract&despite&the&purported&‘silence’&inactivity&after&offer.&The&conduct&
of&paying&reduced&rent&showed&that&a&contract&exists.&
!
3&
&
, AB1301&BUSINESS&LAW&|&RETCONED&BY!SAMUEL!WYSTAN!TAN&
The!Postal!Acceptance!Rule!
! The&acceptance&is&deemed&to&be&effective&as&soon&as&the&letter&is&posted,®ardless&as&to&when&it&
reaches&the&offeror&or&whether&it&reaches&him&at&all.&
A D A M S!V !LIN D SELL!(1818) &A&wool^dealer&wrote&to&a&woolen&manufacturer&offering&to&sell&wool.&The&
manufacturer&posted&a&letter&of&acceptance&which&reached&the&wool^dealer.&However,&the&wool^dealer&
&
sold&the&wool&to&someone&else&a&day&before&receiving&the&letter&of&acceptance.&
Held:&Acceptance&was&communicated&and&the&contract&was&formed&as&soon&as&the&plaintiff&posted&the&
acceptance&letter.&
! However,&the&postal&rule&applies&only&in&circumstances&where&it&is&clear&that&parties&agree&that&
acceptance&should&be&sent&by&post.&
Communication!of!Acceptance!(p69)!
&
! When&an&offer&is&sent&by&telegram,&we&can&presume&that&the&offeror&wants&a&speedy&reply.&If&an&
acceptance&was&subsequently&made&by&post,&it&would¬&attract&the&postal&rule&and&the&general&rule&
applies&and&acceptance&occurs&only&when&the&posted&letter&is&actually&received.&!!
Q U EN ER D U A IN E!V !C O LE!(1883) &
Exceptions!
! To&avoid&the&application&of&postal&rule,&offerors&often&stipulate&that&acceptance&is¬&valid&until&
physically&received&by&the&offeror.&In&this&way,&offeror&overrides&postal&rule&and&general&rule&applies.&
Instantaneous!Communications!
! For&the&case&of&instantaneous&communications&proper,&such&as&a&telephone&call,&communication&
between&parties&is&instantaneous&in&its&fullest&sense.&
- As&such,&it&would&be&identical&to&making&an&oral&contract&face^to^face.&Hence&the&general&rule&
applies&here.&(Acceptance&effective&when&heard&by&offeror)&
&
! For&the&case&of&near^instantaneous&communications,&such&as&telex&or&instant&messaging&over&the&
internet,&
- Both&parties&respond&to&each&other&in&real&time.&As&such,&it&would&be&identical&to&making&an&oral&
contract&face^to^face,&except&that&their&“conversation”&is&made&on&a&written&form.&Hence,&the&
general&rule&applies&here.&
EN TO R ES!LTD !V !M ILES!FA R !EA ST !C O R P .!(1955) !Telex&was&used&to&make&a&contract&between&the&two&
parties.&The&court&had&to&decide&where&the&contract&was&made.&
Held:!The&contract&was&made&when&the&communication&is&actually&received.&The&general&rule&applies&and&
the&contract&was&made&in&London&where&the&telex&was&received.&
&
! For&the&case&of&instantaneous&transmission&but¬&instantaneous&communication,&such&as&emails,&
facsimile&or&voice&mail,&&
- Since&the&offeror&may¬&be&manning&the&receiving&equipment&all&the&time,&the&offeror&may¬&
Communication!of!Acceptance!(p69)!
be&immediately&aware&of&the&acceptance.&
New!s13!ETA!2010!determines&the&time&of&receipt&of&an&email&
- If&there&is&a&designated&electronic&address,&time&of&receipt&is&when&email&becomes&capable&to&
Exceptions!
being&retrieved&by&the&recipient.&(Postal&rule&applies)&
- If&there&is&no&designated&electronic&address&or&email&is&sent&to&a&non^designated&one,&time&of&
receipt&is&when&the&email&becomes&capable&of&being&retrieved&by&the&recipient&at&that&address&
and&he&becomes&aware&that&the&email&has&been&sent&to&that&address.&(General&rule&applies)&
Note:&the&scope&of&the&ETA&does¬®ulate&that&a&contract&is&formed.&It&merely&determines&the&time&of&receipt,¬&the&time&of&
acceptance.&Hence&there&is&still&a&need&to&use&contract&law&to&determine&whether&the&receipt&is&a&form&of&acceptance&or¬.&
! Under&the&new&s15!ETA&2010,&an&electronic&record&is&deemed&sent&by&the&sender&if&it&is&sent&by&the&
sender&himself,&someone&authorized&by&him&or&by&an&information&system&programmed&by&or&on&behalf&of&
the&sender&to&operate&automatically.!
C H W EE!K IN !K EO N G !V !D IG ILA N D M A LL!(2004) !
!
!
4&
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