LAWS2111 L1, 2011

Introduction to Contract and Offer


  • Optional 30% assignment
  • There's some kind of application you have to send through in order to do this optional assignment. And when you send it through, you must stick with it. At least, that's what I heard …

Agreements or Contracts?

  • Agreements: can be social, negotiations
  • Contracts: legally binding

‘Intention’: Function of the Courts

  • Subjective approach
  • Objective approach
    • Traditionally takes an objective approach regarding intention – if the rest of the room thinks the intention of our actions were to make a legally binding contract, it is. What would a reasonable person think the intention was?

Contractual theory

  • Ch 1 of textbook

Status to Contract, and beyond

  • ‘Laissez Faire’ – People’s own choices. Notion from 19th C onwards: make your own arrangements if you have the money and on a lower level, provided you have means. As such, status becomes less and less important. The role of the courts is simply to enforce.

Exemption clauses

  • Excluding liability in a term
  • The little old lady and the big company
    • Moving company excludes all liability if something ends up broken during the move. Should this be acceptable?

Something of value

  • It is binding so others rely upon it.

Why no Contracts Act (Code)?

  • No single Act regulating contracts.
  • Australian case law and some statutes that cover a specific area.
  • Informal codes: standard procedures for creating contracts in various areas.

Law of Contract or Contracts?

  • Different types of contract
    • Assume same principles apply to all types of contracts. Consider what principles from the law of contract can be applied to the case in question.
  • Different state laws?
  • Australian and English Contract Law

The Structure of a Contract

Contract pleading

  • Agreement
    • An employment contract between two parties.
  • Terms
    • It was a term of the contract that …
  • Breach
    • Said term was breached.
  • Remedy
    • Traditional remedy: Plaintiff claims damages.


1. Introduction and Offer
2. Acceptance
3. Termination of Offer
4. Certainty of Terms and Intention to be Bound
5. Consideration
6. Promissory Estoppel
7. Express terms 1
8. Express terms 2
9. Implied terms at common law and under statute
10. Interpretation of terms and exemptions
11. Statutory control of exemption clauses and the Australian Consumer Law 2010
12. Statutory control of unfair terms: the ACL 2010
13. Revision issues

Offer and Acceptance


The negotiation stage

  • ‘Offeror’: makes offer
  • ‘Offeree’: to whom offer made
  • Contract made when an acceptance is communicated to offeror.
  • NB: A contract does not necessarily need to be in writing or signed. You may have an informal contract that is made orally.

Offers and requests for information

  • Harvey v Facey [1893]
    • Telegrams
      • B. Will you sell me Bumper Hall Pen?
      • S. Lowerst price is £900
      • B. We agree to buy at £900
    • Held: Not a contract. S not offering, but supplying information.

‘Invitations to treat’ and ‘offers’

  • Contrast: stage where negotiation comes to an end and where someone says that they do offer these goods at this price. Courts place a distinction between invitation to ‘treat’ (ie negotiate)
  • Offer: intention that promise should bind immediately on acceptance.
    • Examples
      • Advertisements (Is it an offer for sale?)
        • Shop windows is not an offer and is intended to be nothing more than an invitation to enter:
        • Fisher v Bell [1960];
        • Reardon v Morley Ford (1980); and
        • Wallace v Brodribb (1985).
    • Trade Practices Act 1974, s 56 bait advertising;
      • Now Competition and Consumer Act 2010 Sch 2 “The Australian Consumer Law”, s 35.
    • Self-service store. The display of goods is not an offer; rather, it’s an invitation to treat. You need to take the goods to the front counter and then make an offer for said goods, which must be accepted by the owner.
      • Pharmaceutical Society of GB v Boots [1953]
    • Newspapers: an advertisement is not an offer, but is an invitation to treat.
      • Partridge v Crittendon [1968]
  • Compare advert in Carlill v Carbolic Smoke Ball Co [1893]
    • What was promise sued upon? If you are still sick after using the smoke ball for two weeks, we will give you £100.
    • Why was it more than advertiser’s hype? It wasn’t just an advertisement, an invitation to treat. However, the language shows an intention that the statement could be binding.
    • Was it a contract with the world? No, but it is an offer to the world. And it is capable of being accepted as long as they took up the terms of the contract.

Unilateral and bilateral contracts

* Certainty and vagueness

  • NB: The fact that the word “offer” is in the advertisement does not necessarily mean it can be a contract.


  • Harris v Nickerson (1873)
    • Advert that auction sale will take place
  • Sale of Goods Act 1896 (Qld), s 59
    • Normal rule for bidding: when binding? When the auctioneer bangs the gavel.
  • Warlow v Harrison (1859)
    • Auction ‘without reserve’ price (the seller is going to sell to the highest bidder and does not have a reserve price).
    • Can seller withdraw before acceptance?
    • Ulbrich v Laidlaw [1924]; Barry v Davis [2000] 1 WLR 1962.
    • Follow Warlow, ‘collateral contract’ possible
      • No reserve entails a collateral contract where the auctioneer is promising that there will be a sale without reserve. Although no official sale contract, could sue the auctioneer through a collateral contract that has been created.


  • Major public contracts often ‘go out to tender’ (treated as bids, as offers)
  • Distinguish between
    • Invitation to submit a ‘tender’
    • Actual tenders
  • Spencer v Harding (1870)
    • Circular inviting tenders (not offer); only tenders were offers
  • Blackpool & Fylde Aero Club v Blackpool BC [1990]
    • Council calls for tenders by 12.00