LAWS2111 L2, 2011

Offer ctd. and Acceptance

Offers ctd.

Tenders

  • A tender is the offer
    • And the offeree can choose which tender to accept.
  • Major public contracts often “got out to tender”
  • Distinguish between:
    • An invitation to submit a ‘tender’; and
    • Actual tenders.

Spencer v Harding (1870)

  • Circular inviting tenders (not offer); only tenders were offers

Blackpool & Flyde Club v Blackpool BC [1990]

  • Council called for tenders by 12:00 pm. Red Rose put in a tender, as did Aero Club (who submitted it at 11:00 am). The Council’s employees failed to check the post between 11:00 am and 12:00 pm. Club’s bid was ‘late’.
  • Held: If a conforming tender is submitted before the deadline, then it is entitled to have the tender opened and considered (not automatically accepted).
  • Factors: Council approached a small number (6), the club held concession for 8 years, the Council had standing orders (ie. rules) and ‘confident assumptions’ of commercial parties not to open/accept before deadline or accept tender they received late.
  • Claim for damages towards the Council for not having considered their tender, that the council would consider the tender and any tender that suited the Council would be accepted.

Tenders and Process Contracts

Hughes Aircraft Systems v Airservices Australia (1997)

  • A case that applies the Blackpool principle
  • H and T in tender battle for CAA contract
  • Controversial history
  • CAA sends
    • Letter detailing process – all must sign
    • Request for tender RFT [similar]
  • CAA later allows T to alter tender
  • Held:
    • Letter was a process contract
      • Tendering process on letter terms
    • RFT also a process contract when H made its tender
      • CAA in breach

IPEX v State of Victoria [2010]

  • Process contract found, but no breach.

Passenger Tickets

MacRobertson Miller v Cmr of State Taxation (1975)

  • Conventional analysis
    • Issue of ticket is offer
    • Acceptance by conduct of passenger in keeping
    • Cf. ‘unusual examples (eg. car park machine)

Thornton v Shoe Lane Parking [1971]

  • Use of word ‘offer’ not conclusive
  • Lord Denning:
    • Dicta on automatic ticket machines

Rejection and Counter Offer

Hyde v Wrench (1840)

On 6 June, A offers for £1000
On 8 June, B Replies at £950
On 17 June, A refuses £950 price
On 29 June, B 'accepts' at £1000

Held:

  • Counter offer destroys original offer
  • Counter offer is next stage in negotiations

Stevenson v Maclean (1880)

  • Inquiry for information not counter offer
    • D offer at ‘40s. [£2] per ton CASH’
    • P [inquiry if credit available]
      • ‘40s. over 2 months or longest?’
    • No reply from D
    • P later accepts cash offer
  • Held:
    • P entitled to accept
      • Inquiry (2) was not counter offer
      • So offer (1 ) still open for acceptance

Rest Sea v APT [2010] NSWCA 296, para 19

  • Offer to sell shares
  • Acceptance, but with some queries
  • Held:
    • Clear acceptance,
    • But if ‘attempt at acceptance with insufficient clarity’
    • Was not rejection or counter offer
    • Offer still open for acceptance in later letter

Acceptance

  • Accept expressly, or by conduct
  • Objective test
    • Signature
      • First Fitness v Chong [2008]
    • Spoken or written words of acceptance
      • eg. ‘I accept’: telephone, letter, or email
  • Acceptance by conduct
    • Brogden v Metropolitan Railway (1877)
  • Commercial parties (eg. building trade)
    • Start work while stil settling terms
    • Later need to find acceptance (even retrospective)
    • Empirnall v Machon Paul (1988)

Empirnall v Machon Paul

  • Developer (E) requests work from architect (M):
    • Oral contract
    • Costs + 12.5%, regular progress payments
  • M concerned about progress payments
    • E’s agent said ‘Send the claim but hold the contracts. Eric does not sign contracts!’
    • 3 October - M sends payment claim with copies of Master Builders standard contract (MBA)
      • ‘Please sign’ – E paid, but no signature.
    • 19 October - M referred to earlier letter and wrote
      • ‘proceeding on understanding conditions are accepted by you, and works are conducted in accordance.’
    • No doubt M entitled to payment for work, but was it on the written contract terms?
      • Cl 26 gave charge on property and E was insolvent
      • Were blank spaces in MBA
  • Held: (McHugh JA, Samuels JA)
    • Analogy of ticket cases – can accept terms by conduct
    • Would reasonable bystander regard conduct, including silence, as signalling acceptance?
      • M made clear future work was on basis of MBA
      • E paid price in MBA
      • Acceptance of work was acceptance on MBA terms
      • Not acceptance by silence, but taking benefit of offer with knowledge of the terms
      • ‘Eric not signing’ supports MBA
  • Objection to manner of acknowledging terms,
  • Not objection to contents
  • Acceptance in ignorance of offer
    • X writes to Y: offer to sell Falcon for $15k
    • Y writes to X: offer to buy Falcon for $15k
      • Letters cross in post
      • No acceptance of offers
  • But later acceptance by conduct?
  • Acceptance to be in exchange for offer
    • Reward cases
    • Fitch v Snedeker (1868, US)
      • Information given in ignorance of reward
    • R v Clarke (1927)
      • Relevance of motive: needs some link to offer
      • Clarke was arrested, snitched about who really killed the person and wanted the reward.
      • Held that the motive must be related to the offer.
    • Cf. Carlill
      • Irrelevant that C wanted to avoid influenza
      • Bought smoke ball on faith of advert

Acceptance of Tenders

  • Single tender
    • Offer to be accepted in normal way
  • Standing offers
    • Great Northern Ry v Witham (1873)
      • W offer to supply all Ry’s coal needs for a year
      • Ry ‘accepted’, but what does this acceptance mean? How much coal?
      • January: Ry ‘order’ 10 tonnes
        • Acceptance: Contract No. 1
      • February: Ry ‘order’ 20 tonnes
        • Acceptance: Contract No. 2
      • In March, Witham offeror withdraws standing offer.

Auctions and Fixed Bidding Sales

  • Distinguish
    • Auctions (public); acceptance by auctioneer
    • Fixed bidding sales (limited parties)

Harvela v Royal Trust Co of Canada

  • H and L competing for shares owned by RT
  • Various offers: different prices/terms
  • RT invtes H and L to submit single revised bid
    • RT to keep confidential
    • RT will accept highest bid
      • H offers $2,150,000.00
      • L offers $2,100,000.00 or $101,000.00 more than H.
    • Which offer should RT (seller) accept?
  • Held:
    • Confidential referential bid must be:
      • expressed in invitation;
      • Maximum given in bid
    • Here not valid (ie. not an effective offer) – defeating the purpose of fixed bidding sales
      • RT not in breach of any process contract (to accept highest bid)

Silence and Conduct

  • Usually, silence after an offer does not equate to acceptance. However …

Felthouse v Bindley (1862)

  • Uncle negotiated to buy horse of nephew
  • Uncle stated "if I hear no more, I'll consider the horse mine"
  • Through mistakes, the horse was sold to someone else at an auction and the uncle sued the auctioneer

Held:

  • Silence cannot constitute acceptance because this puts the offeree in the position of having to communicate refusal
  • Principle: An offeror is free to dispense with the requirement of communicating acceptance, but cannot prescribe a mode of refusal

Latec Finance v Knight [1969]

  • P’s standard form credit contract
    • D [consumer] ‘offer for finance 12 Sept’
    • ‘Not binding on you [HP Co] until memo of acceptance signed by you [HP Co]’
  • P signs 18 September, but never communicated this to D
  • November D returns defective TV; no payments made
  • Years later, P sues for all instalments.

Held:

  • D’s actions not evidence that he knew offer was accepted?
    • Yet kept for several weeks
  • To vary normal communication rule need clear evidence.

Consumer Protection legislation

  • Credit (Commonwealth Powers) Act 2010 (Qld), adopts
    • National Consumer Credit Protection Act 2009 (Cth), amended 2010
      • Offences, consumer credit inspectors etc.
      • National Consumer Credit Code
  • Detailed advertising and disclosure rules for credit contracts
  • s 14(1) Offer in writing, signed by debtor and credit provider
  • s 14(2) Accept by drawing down credit or other act satisfying offer
  • Competition and Consumer Act (CCA) 2010, ‘Australian Consumer Law’ 9ss 39-43)
    • Division 2 Unsolicited Goods and Services
      • Consumers feeling obliged to pay if received goods/services
      • Offences created and
      • ss 41, 42
  • Receiver not liable for
    • Payment
    • Loss or damage unless wilful
  • Right to keep after time limit [varies 1 month notice; 3 months from receipt]
  • Property Agents and Motor Dealers Act 2000 Qld) (PAMDA)
    • Cooling off periods after acceptance
      • eg ss 363, 369 (property sales)
      • NB: These are not examinable (the acts). Just know that there are statutes in place.

Waiver of Communication

  • Carlill
    • Smoke Ball Co waives right to have Mrs C communicate acceptance initially
    • Words or conduct
  • Latec v Knight
    • Variation of rule needs to be clear in offer
      • Acceptance by an act (Carlill), or
      • Exact manner of acceptance specified
  • Hirer could never claim acceptance by HP Co unless HP Co had signed and communicated
    • Otherwise Co would have kept form in office. Decided whether to apply or not?

Methods of Acceptance: prescribed by offeror

  • Manchester Diocesan Case [1969] 3 All ER 1593
    • Use of any ‘not less advantageous mode’
    • P invites tenders
    • ‘Acceptance by letter to tender address’
    • D tenders (offer)
    • P acceptance sent to D’s surveyor [another address]
    • Q Was only one method prescribed? No
  • Intent of offeror? Consider:
    • Speed
      • Not always an important factor.
    • Security
    • Reliability
    • Record
  • What happens if we have instantaneous communication (fax, email etc.)?