Legal Environment

Learning Objectives
Quick Review
Miscellaneous Points on Offers
Who is the Offeree?
Knowledge of the Offer
Rejection of an Offer
Cancelling an Offer
Lapsing of an Offer

Quick Review
An offer is made by an offeror to an offeree
The offeror agrees to do something
The contract is made when the offeree accepts the offer

Who is the offeree?
An offer can be made to
A particular person
A group of people
The whole world

Who is the offeree? (cont.)
If the offer is made to a particular person (or group) then only that person (or group) may accept the offer
Eg: If I offer to sell my car to Jim then only Jim may accept that offer. John cannot accept.

Who is the offeree? (cont.)
If the offer is made to the whole world then anyone can accept
We saw an example of this in Carlill v. Carbolic Smoke Ball Company
Mrs Carlill accepted the offer by her actions
She bought and used the medicine

Knowledge of the offer
You have to know about the offer before you can accept it
If you find my lost dog and return it without knowing that I had offered to pay £100 to the person who found it, then you cannot later claim the reward when a friend tells you about it

Rejection of Offers
If the offeree rejects the offer then the offer is dead
The offeree cannot later try to accept the original offer
A counter-offer (ie if the offeree tries to change the terms of the offer) also kills the original offer
More about this when we look at acceptance

Cancellation of Offers
The technical term for cancellation of an offer is revocation
An offeror can revoke the offer at any time before it is accepted by the offeree
Once it is revoked the offer can no longer be accepted by the offeree
The offeror must make sure that the offeree knows that the offer has been revoked

Cancellation of Offers (cont.)
The offeror can inform the offeree of the revocation using a reliable third party
Or the offeree can find out from a reliable third party
A promise to keep an offer open until a certain time needs to have another contract which has that promise
And the offeree must pay something for that

Cancellation of Offers (cont.)
A unilateral contract is one where one person (the offeror) promises something in return for some action by someone else (the offeree)
Once the offeree has started to do perform the action, the offeror cannot revoke the contract
Eg Carlill v. Carbolic Smoke Ball Company
It would be unfair if the offeror could revoke the contract just before the offeree has completed the required action

Lapse of Offers
It is not possible to accept an offer once the offer has ended.
The offer is said to have lapsed
Offers lapse
At the end of a specified period
After a reasonable time

At the end of a specified period
The offeror can set a time limit for acceptance in the offer
The parties can also agree a time limit
For example, I could offer to sell you my car for £10,000 but you must accept before 2pm on Friday
After 2pm on Friday the offer will lapse and you will not be able to accept it

After a reasonable time
If no time limit is set in the offer, then the offer will lapse after a reasonable time
What is reasonable depends on the circumstances of each contract
If you are the offeree it may be wise not to wait to long to accept
Or at least check with the offeror if the offer is still open

Summary
An offer can be made to
A particular person
A group of people
The whole world
The offeree must know about the offer to be able to accept it
Rejecting an offer (or making a counter-offer) ends the offer

Summary (cont.)
Cancelling an offer is known as revocation
The offeror can revoke an offer at any time before acceptance so long as the offeree is told about it
Unilateral contracts cannot be revoked if the offeree has started to perform the required action

Summary (cont.)
Contracts lapse (ie end)
At the end of a specified period
After a reasonable time