Case Law Notes 1.Docx

Case
You are expected to have an understanding of the outcome of each of the
cases below, to help you argue the legal principles. In Weeks 1-2 you will be
provided with the legal MAIN CORE principles in the table. From Weeks 3-11,
you are expected to identify these principles YOURSELF in your reading.
Principle
An offer can only exist if there is a firm promise
to do or to refrain from doing something. The
mere supplying of information, whether in
response to a request or otherwise, is not an
offer to deal.

A mere display of goods for sale at marked
prices is generally regarded as an invitation to
treat, not an offer.

Relevant cases
Harvey v Facey [1893] AC
552

Pharmaceutical Society of
Great Britain v Boots Cash
Chemists (Southern)
Ltd [1953] 1 All ER 482.
Fisher v Bell [1961] 1 QB
394.

Advertisements are usually regarded as
invitations to treat.

Grainger & Son v

Gough [1896] AC 325

It is possible for a statement not directed to any
specific group of acceptors to be an 'offer to the
world at large'.

Carlill v Carbolic Smoke Ball
Company [1893] 1 QB 256

Offers must set out the means by which it can be
accepted.

Mildura Office Equipment &
Supplies Pty Ltd v Canon
Finance Australia
Ltd [2006] VSC 42

Once the acceptor has become aware of the
offer, it can be accepted and the acceptor’s
motive for accepting it is immaterial.

Williams v
Carwardine (1833) 5 Car &
P 566

The existence of the offer must be in the
offeree’s mind at the time of purported
acceptance and the 'acceptance' must be both in
response to and as a result of the offeree’s
knowledge of the offer.

R v Clarke (1927) 40 CLR
227

Exaggerated statements that no reasonable
person would believe, known as 'puff', are not
binding on the party making them and do not

Leonard v Pepsico Inc 88 F
Supp 2d (SDNY 1999)


Principle

Relevant cases

give the other party any grounds on which to
seek a remedy.
The offeror’s entitlement to revoke is absolute.

Routledge v Grant [1828] 4
Bing 653

Any revocation of an offer must be
communicated to the offeree before it becomes
effective. Until the offeree becomes aware of the
revocation, he or she can accept the offer and
any such acceptance will create a valid and
binding contract.

Byrne & Co v Van
Tienhoven & Co (1880) 5
CPD 344

Only if the promisee has paid to keep the offer
open or if the promise to keep it open has been
made by deed will the offeror not be able to
withdraw it. This is a new and quite separate
contractual obligation to keep the offer open
called an 'option'.

Goldsbrough Mort & Co Ltd
v Quinn (1910) 10 CLR 674

A counter-offer is a rejection of the original offer
and a substitution of a new offer for it. The
counter-offer destroys the original offer and,
thereafter, it cannot be accepted.

Hyde v Wrench (1840) 2
Beav 334

A mere inquiry is not an acceptance, but neither
is it a counter-offer or rejection. It has an entirely
neutral effect on the offer, and when the offeror
replies, the offeree still has the option of
accepting or rejecting.

Stevenson v McLean (1880)
5 QBD 346

Where firms have their own preprinted purchase
order forms and shipping vouchers or delivery
dockets with terms under which the orders are
sent or received, each set of terms is considered
a counter-offer and 'the set submitted last' takes
precedence.

Butler Machine Tool Co Ltd
v Ex Cell O Corp(England)
Ltd [1979] 1 WLR 401

Where no time limit is stipulated, the offer must
still be accepted within a 'reasonable time'. Once
that reasonable time expires, the offer
automatically comes to an end.

Ramsgate Victoria Hotel v
Montefiore (1866) LR 1 Ex
109

If you haven't already, make sure to review all assessments for this unit.
Some key things to note:





The three assessments cover material from the themes within the
unit.

You are strongly advised to work progressively on all assessments
throughout the teaching period. Participating in the weekly
discussion activities will support you as you prepare for each
assessment.

Ensure that you take notes on the cases from each week to help you work
towards the relevant assessment tasks.


Cases
You are expected to have an understanding of the outcome of each of the
cases below, to help you argue the legal principles. In weeks 1-2 you will be
provided with the legal principles in the table. From weeks 3-11, you are
expected to identify these principles yourself in your reading.
Principle

Relevant cases

In determining what constitutes a reasonable time, at
least two considerations are important:
a. the nature of the subject matter of the
contract (and, in particular, whether it was of
a wasting nature); and
b. the means used to communicate the offer
(the more urgent the means used, the more
reasonable it would be to presume that a
rapid reply was required).

Manchester Diocesan
Council for Education

v Commercial &
General
Investments Ltd [197
0] 1 WLR 241

Acceptance can occur through conduct.

Brogden v
Metropolitan Railway
Company (1877) 2
App Cas 666

The offer must be present in the mind of the
“acceptor” when the “acceptance” occurs or there is
no true acceptance (that is, the act of acceptance
must have been in response to, and as a result of, the
offer).

R v Clarke (1927) 40
CLR 227

An acceptance can only be communicated by the
offeree or by an agent duly appointed for that
purpose. Until the offeror becomes aware of
the acceptance, the acceptor is not bound.

Powell v Lee (1908)
99 LT 284

The offeror cannot stipulate that silence (such as not

actively declining the offer) is a means of acceptance.

Felthouse v
Bindley (1862) 11
CBNS 869

The postal rule states that where the parties
contemplate acceptance by mail, acceptance will be
complete as soon as the letter is properly posted.

Adams v
Lindsell (1818) 106
ER 250

The postal rule specifically applies to acceptances by

Entores Ltd v Myles


Principle

Relevant cases

mail and by telegram. For other forms of
communication, the general rule applies and
acceptance occurs when and where the offeror
receives the communication. This includes
acceptances by telephone, telex, teleprinter, facsimile
machine and other forms of instantaneous or nearinstantaneous communication.

Far East
Corporation [1955] 2
QB 327

Where the postal rule or a “deemed acceptance”
provision applies, a posted acceptance will be
effective, even if it becomes lost, is never delivered or
is abnormally delayed.

Household Fire and
Carriage Accident
Insurance Co v
Grant (1879) 4 Ex D
216

The offeror can negate the postal rule by requiring
actual communication instead of the constructive
communication, either by expressly stipulating that
they must receive the acceptance for it to become
effective or by implication where it's clear that
uncommunicated acceptance was not intended.

Holwell Securities Ltd
v Hughes [1974] 1 All
ER 161

If money is contributed as part of expense sharing,
there is still no contract unless there is evidence of
intention to create a legally binding contract.

Coward v Motor
Insurers
Bureau [1963] 1 QB
259

Agreements between spouses are not contracts
because the parties did not intend that they should be
attended by legal consequences. Domestic
agreements between spouses are outside the realm of
contract altogether.

Links to an external
site.Balfour v
Balfour [1919] 2 KB
571

It is possible for a spouses to create a binding
contract, for example as part of a separation
arrangement.

Merritt v
Merritt [1970] 2 All
ER 760

Where adult members of a family other than husband
and wife share a household, the financial
arrangements which they make may be intended to
have contractual effect.

Riches v

Hogben (1986) 1 Qd
R 315


Principle

Relevant cases

Ermogenous v Greek
In commercial agreements, it is presumed the parties Orthodox
intend to create legal relations. However, if the parties Community(2002)
209 CLR 95
expressly deny intention by stating that negotiations
are ‘subject to contract’ or that any agreement is to be Rose & Frank Co v
‘binding in honour only’ then there is no contract.
Crompton
Bros [1923] 2 KB 261
An agreement between persons who share a
household, but which has nothing to do with the
management of the household, will probably be
intended to be legally binding.

Simpkins v
Pays [1955] 1 WLR
975

If the act put forward as consideration was performed Eastwood v
before any promise of reward was made, it is not valid Kenyon (1840) 113
consideration.
ER 482

As long as some value is given, consideration need not
Thomas v
be ‘adequate’ (that is, be of equal or greater value to
Thomas (1842) 3 QB
the promise). There is no remedy for someone who
234
makes a bad bargain.
Forbearance (a promise not to do something that the
promisee was entitled to do or not exercising a
present right at the request of the promisor) can
constitute good consideration.

Dunton v
Dunton (1892) 18
VLR 114


Cases
You are expected to have an understanding of the outcome of each of the
cases below, to help you argue the legal principles. In Weeks 3-11, you are
expected to identify the legal principles that these cases relate to in your
reading and complete the table for your study notes as modelled in weeks 12.
Principle

Relevant
cases

Textbook
section

Mercantile
Bank of
Sydney v
4.3
Taylor (1891)
12 LR (NSW)
252
Van Den
Esschert v
Chappell [19
60] WAR 114

4.8

De Lassalle v
Guildford [19 4.14
01] 2 KB 215
Hoyts Pty Ltd
v
Spencer (191 4.15
9) 27 CLR
133
JJ Savage &
Sons v
Blakney (197 4.17
0) 44 ALJR
123
http://www.e-l
awresources.co.
Routledge v

uk/Routledge-vMcKay [1954]
Mackay.phpLink
1 All ER 855
s to an external
site.
Oscar Chess
v

4.12


Principle

Relevant
cases

Textbook
section

Williams [195
7] 1 All ER
325 [PDF,
17KB]
Dick Bentley
Productions
Pty Ltd v
Harold Smith
(Motors) Pty
Ltd [1965] 1
WLR 623

4.12

Ellul v
Oakes [1972] 4.12
3 SASR 337
BP Refinery
(Westernport
) Pty Ltd v
Shire of
4.34
Hastings (19
77) 180 CLR
266
L’Estrange v
Graucob [193
4] 2 KB
4.28
394 Links to
an external
site.
Toll (FGCT)
Pty Ltd v
Alphapharm
Pty
Ltd [2004]
HCA 52


stlii.edu.au/au/jo

urnals/UNELawJ
l/2005/9.pdfLin
ks to an external
site.

Curtis v
4.29
Chemical
Cleaning and
Dyeing
Co [1951] 1
KB 805 Links


Principle

Relevant
cases

Textbook
section

to an
external site.
(Clarke 2010)

Le Mans
Grand Prix
Circuits Pty
Ltd v

Iliadis [1998]
4 VR 649

Class Session Discussion

Clarke, B.,
Kapnoullas,
S., When is a
signed document
contractual?
Taking the 'Fun'
out of
'Funfair' [2001]
QUTLawJJI 4
(
t
lii.edu.au/au/journ
als
/QUTLawJJl/2001/
4.htmLinks to an
ext
ernal site.)