Offer and Acceptance PDF

Offer  and  Acceptance   Requirements  for  a  Valid  Contract     A  contract  is  a  legally  binding  agreement.  For  an  agreement  to  be  binding,...

Offer  and  Acceptance   Requirements  for  a  Valid  Contract     A  contract  is  a  legally  binding  agreement.  For  an  agreement  to  be  binding,  it  must   satisfy  the  requirements  for  a  valid  contract:     1. Meeting  of  the  minds  between  the  parties  (consensus  ad  idem)  as  manifested   through  offer  and  acceptance   2. Consideration  and  intention  to  create  legal  relations   3. Parties  must  have  the  capacity  to  contract   4. Parties  must  freely  consent  to  the  agreement.   5. Contract  must  not  suffer  from  illegality     Factors  that  may  vitiate  free  consent  are  mistake,  misrepresentation  and  duress  /   undue  influence.       Void,  Voidable,  Unenforceable     Void:  The  law  treats  the  contract  as  nullity  on  account  of  some  serious  flaw     Voidable:  Law  treats  the  contract  as  valid  when  made  but  one  of  the  parties  to   the  contract  has  the  right  to  avoid  it.  The  party  induced  to  enter  into  a  contract   has  the  right  to  avoid  it  or  opt  to  continue  with  the  contract     Unenforceable:  Contract  that  is  valid  and  legally  binding,  but  cannot  be  enforced.     Bilateral  and  Unilateral  contracts     In  a  bilateral  contract,  the  offeror  makes  a  promise  in  return  for  a  promise  on  the   part  of  the  offeree     In  a  unilateral  contract,  the  offeror  makes  a  promise  in  return  for  an  act  to  be   performed  by  the  offeree.  Performance  of  the  act  constitutes  both  acceptance  of  the   offer  as  well  as  consideration.                                 1  of  16   © Tham Zhi Yang. 2012  Offer  and  Acceptance   Offer     An  offer  is  an  expression  of  willingness  to  contract  on  specified  terms,  made  with  the   intention  that  it  is  to  become  binding  as  soon  as  it  is  accepted  by  the  person  to   whom  it  is  addressed  -­‐    (Trietel,  The  Law  of  Contract)     An  offer  involves  three  elements:   1. Contains  the  terms  of  exchange   2. Indication  of  the  willingness  to  be  bound   3. Confers  on  the  offeree  the  power  to  bind  the  offeror  upon  acceptance  of  the   offer  such  that  the  offeror  can  no  longer  withdraw  the  offer     Unilateral  Offers     A  unilateral  offer  is  a  promise  in  return  for  an  act,  which  is  to  be  performed  by  the   offeree.  The  act  of  acceptance  is  the  complete  performance  of  this  act.     Offers  can  be  made  to  the  public,  and  such  offers  are  usually  unilateral  offers.     Carlill  v  Carbolic  Smoke  Ball  Company  (1893)   The  English  Court  of  Appeal  held  that  an  offer  could  be  made  to  the  world  at   large,  and  the  defendants’  offer  to  pay  the  person  who  bought  and  used  their   product  as  specified  but  still  caught  influenza,  constituted  a  unilateral  offer.     Invitation  to  Treat  VS  Offer     An  invitation  to  treat  is  an  expression  of  willingness  to  enter  into  negotiations  with   the  other  party.  There  is  no  intention  to  be  bound  yet.  The  person  inviting  may   accept  or  reject  the  offer  by  the  other  party.     To  determine  whether  a  party  made  an  offer  or  invitation  to  treat,  the  court  will   observe  the  words  and  conduct  of  the  first  party  and  objectively  determine  the   intention  of  party  making  the  proposal     The  following  are  generally  held  to  be  invitation  to  treat  rather  than  offers:     No.   Type   Remarks   1   Advertisements   Considered  as  invitations  to  treat  on  the  basis:   -­‐ People  who  read  the  advertisements  may  want   to  negotiate  further   -­‐ The  intending  seller  may  have  limited  number  of   items  to  sell             2  of  16   © Tham Zhi Yang. 2012  Offer  and  Acceptance   Patridge  v  Crittenden  (1968),  Lord  Parker   “When  one  is  dealing  with  advertisements  and  circulars,   unless  they  come  from  manufacturers,  there  is  a   business  sense  in  their  being  construed  as  invitations  to   treat  and  not  as  offers  for  sales”     Exceptions     Carlill  v  Carbolic  Smoke  Ball  Company  (1893)   The  court  found  an  intention  to  be  bound  -­‐  the   advertisement  stated  they  had  deposited  1000  pounds   with  the  bank  showing  that  they  were  serious  about   their  promise  to  compensate  customers  who  used  the   product  and  caught  influenza.  A  unilateral  offer  was   indeed  made  in  this  case.     2   Display  of   Practical  considerations  to  the  rule  are:   Goods  in  Shops   -­‐ Shops  do  not  have  to  sell  goods  at  the  marked   price,  especially  in  case  of  misquotation   -­‐ Buyer  cannot  insist  upon  buying  a  particular  item   on  display,  even  if  the  shop  ran  out  of  stock     Pharmaceutical  Society  of  Great  Britain  v  Boots  Cash   Chemists  (1953),  Court  of  Appeal   Held  that  the  display  of  goods  was  an  invitation  to  treat,   and  offers  were  instead  made  by  the  customer  at  the   cash  desk.     *  Store  holders  can  instead  include  “While  stocks  last”  to   overcome  the  difficulty  of  being  unfairly  bound  if  they   were  to  run  out  of  stock.     3   Price  lists  and   Advertisements  posted  on  a  website  amounts  to   information  on   invitations  to  treat   the  homepage     of  a  company   Chwee  Kin  Keong  and  others  v  Digilandmall.com  Pte  Ltd   (2004),  VK  Rajah  JC   Cautioned  internet  merchants  to  be  cautious  as  to  how   they  advertise  on  the  internet.  Loose  language  may   result  in  inadvertent    establishment  of  contractual   liability  to  a  much  wider  audience  than  resources  permit.     Exceptions:     When  a  buyer  is  guided  on  screen  step  by  step  until  he   clicks  “I  accept”  and  pays  the  purchase  price  online  it   may  constitute  as  an  offer.  The  key  element  is  the   intention  of  parties.   3  of  16   © Tham Zhi Yang. 2012  Offer  and  Acceptance     4   Invitations  to   An  invitation  to  tender  is  an  invitation  to  treat.  The   Tender   person  who  submits  the  tender  makes  the  offer.   Acceptance  takes  place  when  the  person  inviting  the   tender  accepts  one  of  the  offers.     Exceptions:     Harvela  Investments  Ltd  v  Royal  Trust  Co  of  Canada   (1986),  House  of  Lords   Held  that  the  expressed  intention  of  the  vendor  to  sell  to   the  highest  bidder  was  a  contractual  offer  rather  than  an   invitation  to  treat   -­‐  Referential  bids  are  also  invalid.  If  both  parties  submit   referential  bids,  then  it  is  impossible  to  conclude  the   contracts   5   Auction  Sales   Call  for  bids  by  the  auctioneer  is  an  invitation  to  treat.   The  contract  is  completed  by  the  fall  of  the  hammer.  A   bidder  is  free  to  withdraw  his  offer  until  the  hammer   falls.     Sale  of  Goods  Act  (Cap  393,  1999  Rev  Ed)     Exception:     Warlow  v  Harrison  (1859)     An  auction  advertised  as  “without  reserve”  amounts  to   an  offer  by  the  auctioneer  once  the  auction  has   commenced.  The  lot  will  be  sold  to  the  highest  bidder   (who  accepts  the  offer).                                     4  of  16   © Tham Zhi Yang. 2012  Offer  and  Acceptance   Termination  of  Offer     No.   Methods   Remarks   1   Revocation   The  offeror  can  revoke  his  offer  at  any  time  before  it  is   accepted  by  the  offeree.  Revocation  must  be   communicated  to  the  offeree     Byrne  v  Van  Tienhoven  (1880)   The  court  held  that  the  contract  between  plaintiff  and   defendant  were  binding,  as  the  revocation  was  not   effective.  The  revocation  was  communicated  9  days  after   the  contract  had  come  into  existence.       Revocation  of  an  offer  does  not  have  to  be   communicated    by  the  offeror  himself,  and  can  be  made   by  some  other  reliable  source     Dickinson  v  Dodds  (1876)   The  English  Court  of  Appeal  held  that  the  defendant  had   validly  withdrawn  his  offer,  and  that  withdrawal  was   validly  communicated  to  the  plaintiff  through  a  third   party  (the  plaintiff’s  property  agent).       Notice  of  withdrawal  must  be  given  and  actually  reach   the  offeree  to  be  effective.  Notice  of  withdrawal  need   not  be  explicit.       Overseas  Union  Insurance  Ltd  v  Turegum  Insurance  Co   (2001)   The  Singapore  High  Court  held  that  the  offer  had  been   revoked.  The  defendant  had  sent  a  letter  of  demand  for   payment  by  the  plaintiff  for  its  full  liability,  rendering  the   previous  offer  for  a  reduction  in  the  plaintiff’s  liability   incapable  of  acceptance.                         5  of  16   © Tham Zhi Yang. 2012  Offer  and  Acceptance     There  is  no  legal  obligation  on  the  part  of  the  offeror  to   keep  the  offer  open  for  a  specified  period  even  if  he  had   promised  to  do  so.     -­‐  The  basis  is  that  an  offeree  cannot  enforce  an  offeror’s   promise  to  keep  his  offer  open  unless  there  is  a  separate   contract  supported  by  consideration  (options).     Routledge  v  Grant  (1828)   The  court  held  that  the  defendant  could  withdraw  the   offer  at  any  time  before  acceptance,  even  though  the  6-­‐ week  consideration  deadline  had  not  expired.     Exception:     Where  a  legally  binding  option  is  created,  given  the   offeree  provides  some  consideration  in  return  for  the   offeror’s  promise  to  keep  the  offer  open     Mountford  v  Scott  (1975)   The  Court  of  Appeal  held  that  the  seller  could  not   withdraw  the  offer  before  the  option  expired.  An  option   to  buy,  exercisable  within  6  months,  was  created  with  the   consideration  the  payment  of  1  pound.       An  offer  may  be  revoked  when  it  is  replaced  by  a   subsequent  offer.  The  second  offer  must  stipulate  that  it   supersedes  the  earlier  offer  so  that  it  can  no  longer  be   accepted                                     6  of  16   © Tham Zhi Yang. 2012  Offer  and  Acceptance   Revocation  in  unilateral  contracts     1st  Approach   In  the  case  of  unilateral  contracts,  reasonable  steps  must   be  taken  to  bring  withdrawal  to  the  attention  of  such   persons.  The  persons  need  not  be  aware  of  this   revocation,  as  long  as  reasonable  steps  are  taken.     2nd  Approach   Unilateral  offers  may  consist  of  two  offers:  a  main  offer   and  an  implied  offer  not  to  revoke  the  main  offer     Daulia  Ltd  v  Four  Millbank  Nominees  Ltd  (1978)   Goff  LJ  held  that  there  must  be  an  implied  obligation   being  satisfied  on  the  part  of  the  offeror  not  to  prevent   the  condition  being  satisfied,  which  arises  as  soon  as  the   offeree  starts  to  perform  within  a  reasonable  time.  Once   the  offeree  has  embarked  on  the  performance,  it  is   however,  too  late  to  revoke  the  offer.       The  offeree  will  be  compensated  for  his  or  her  trouble  by   way  of  a  reasonable  sum  in  Quantum  Meruit.                                                     7  of  16   © Tham Zhi Yang. 2012  Offer  and  Acceptance   2   Rejection  /   Offer  is  terminated  when  the  offeree  rejects  it.   Counter-­‐Offer     This  may  be  done  when  the  offeree  states  that  he  has  no   interest  in  the  offer,  or  impliedly  where  he  purports  to   accept  the  offer  with  conditions  attached  and  makes  a   counter  offer.     A  counter  offer:   -­‐ Acts  as  rejection  of  the  original  offer   -­‐ Stands  as  a  new  offer  capable  of  being  accepted   by  the  offeror     Exception:     When  it  is  hard  to  determine  whether  the  offeree  is   making  a  counter  offer  or  merely  asking  for  additional   information  on  the  offer.     Stevenson  v  McLean  (1880)   The  court  held  that  the  defendant  was  liable  for  breach   of  contract  as  the  enquiry  by  the  claimant  on  whether   they  could  have  credit  terms  amounted  to  a  request  for   more  information  and  not  a  rejection  of  offer.     3   Lapse  of  Time   Where  offeror  has  specified  a  time  limit  by  which  the   offer  must  be  accepted,  the  offer  will  lapse  if  not   accepted  within  that  time.   -­‐ Subject  to  the  offeror  right  to  revoke  it  earlier   unless  he  has  agreed  to  keep  the  offer  open  (via   options)     Where  the  offeror  has  not  specified  a  time  limit,  the  offer   will  lapse  after  a  reasonable  period  of  time.  This  would   depend  on  the  circumstance  of  the  case.     Ramsgate  Victoria  Hotel  v  Montefiore  (1866)   The  court  upheld  that  five  months  was  not  a  reasonable   time  for  acceptance  of  an  offer  to  buy  shares  as  price  of   shares  fluctuate  rapidly.                   8  of  16   © Tham Zhi Yang. 2012  Offer  and  Acceptance   4   Failure  of  a   An  offer  may  be  made  subject  to  conditions  which  may   condition   be  stated  expressly  by  the  offeror  or  implied  by  courts   from  the  circumstances  of  the  case.  If  such  conditions  are   not  satisfied,  the  offer  is  not  capable  of  being  accepted.     Financings  Ltd  v  Stimson  (1962)   The  English  Court  of  Appeal  held  that  the  hire  purchase   agreement  was  not  binding  because  the  defendants’   offer  to  obtain  the  car  on  hire  purchase  was  subject  to  an   implied  condition  that  the  car  would  remain  in   substantially  the  same  state  until  acceptance.  Since  the   implied  condition  had  not  been  fulfilled,  as  the  car  was   badly  damaged,  no  contract  had  come  into  existence.   5   Death   Offeror  has  died   -­‐ Offer  terminates  if  the  offeree  knows  that  the   offeror  has  died   -­‐ Will  not  be  terminated  if  the  offeree  has  no  notice   of  the  offeror’s  death,  however,  depending  on   nature  of  contract.  If  it  involved  personal  services,   it  cannot  be  accepted.  Other  offers  may  be   accepted  and  binding  on  personal  representatives   of  the  deceased.     Offeree’s  death   -­‐    The  offer  made  to  him  is  no  longer  capable  of   acceptance.                                               9  of  16   © Tham Zhi Yang. 2012  Offer  and  Acceptance     Acceptance     An  acceptance  is  an  unconditional  agreement  to  all  the  terms  of  the  offer  and  must   be  made  when  the  offer  is  open.  It  must  be  absolute  and  unqualified.     Mode  of  acceptance     Bilateral  contract   Through  the  Offeree’s  promise  in  return  for  a  promise     Unilateral  contract   Through  the  Offeree’s  performance  of  an  act  in  return  for  a  promise     General  Principles     Acceptance  must  be  final  and  unqualified     The  offeree  must  agree  to  all  the  terms  contained  in  the  offer.  Any  attempt  on  his   part  to  introduce  new  terms  would  result  in  a  counter  offer.     Acceptance  must  be  communicated  to  the  offeror     The  acceptance  is  validly  communicated  when  it  is  actually  brought  to  the  notice  of   the  offeror.       The  general  rule  applies  to  all  modes  of  instantaneous  communications   -­‐ This  includes  telex,  fax,  telephone  and  possibly  email   -­‐ The  reason  is  that  in  the  alternative  people  might  be  bound  by  a  contract   without  knowing  that  their  offers  have  been  accepted  which  would  lead  to   future  difficulties     s11  ETA  states  that  an  offer  or  acceptance  can  be  sent  electronically  in  the  form  of  an   electronic  record.   s13(1),  s13(2)  ETA  states  that  generally  an  electronic  record  is  deemed  sent  by  originator   himself,  someone  authorized  by  him  or  by  an  information  system  programmed  by  or  on   behalf  of  the  originator  to  operate  automatically.   s14  ETA  states  that  there  are  provisions  for  a  party  to  require  an  acknowledgement  of   receipt  to  ensure  messages  have  been  received  properly.     Account  designated  by  addressee?   à  No  s15(2b)  à  receipt  occurs  at  the  time  the  electronic  record  enters  the   information  system  of  the  addressee.   à  Yes  s15(2a)   Is  it  sent  to  the  designated  account?   Yes  à  receipt  occurs  and  acceptance  communicated   Noà  receipt  occurs  when  electronic  record  is  retrieved  by  addressee.     10  of  16   © Tham Zhi Yang. 2012  Offer  and  Acceptance     Entores  Ltd  v  Miles  Far  East  Corporation  (1955)    The  court  ruled  that  the  English  courts  had  jurisdiction  even  when  the  telex   was  typed  in  Holland  because  where  a  contract  is  made  by  instantaneous   communication  the  contract  is  complete  only  when  the  acceptance  is   received  by  the  offeror.     Exceptions:     Waiver   Wavier  of  Acceptance  may  arise  in  the  case  where  the  offer  is  made  to     the  whole  world.  In  such  a  situation,  the  contract  may  be  accepted  by   anyone,  creating  a  unilateral  contract.       Carlill  v  Carbolic  Smoke  Ball  Co.  (1982)         Postal   The  postal  rule  of  acceptance  is  an  exception  to  the  general  rule  that   Acceptance   acceptance  must  be  communicated.  Acceptance  takes  place  at  the   Rule   time  when  the  letter  of  acceptance  is  posted  and  it  is  completed   regardless  as  to  when  the  letter  reaches  the  offeror  or  whether  it   reaches  him  at  all.       Adams  v  Lindsell  (1818)   The  court  held  that  the  contract  was  concluded  the  defendant   and  the  plaintiff  at  the  time  when  the  letter  of  acceptance  was   posted.     Household  Fire  and  Carriage  Accident  Insurance  Co  v  Grant   (1879)   The  English  Court  of  Appeal  held  that  a  contract  was  formed   when  the  letter  was  posted,  and  the  defendant  was  obliged  to   pay  the  plaintiff,  even  as  the  letter  was  never  received.     Applicability  of  Postal  Acceptance  Rule  to  Emails     Brinkibon  Ltd  v  Staghag  Stahl  und  Stahlwarenhandels  GmbH   (1983)   Lord  Wilberforce  observed  that  the  general  rule  is  not   necessarily  a  universal  rule.  “The  message  may  not  reach,  or  be   intended  to  reach,  the  designated  recipient  immediately:   messages  may  be  sent…with  the  intention  or  on  the   assumption  they  will  be  read  at  a  later  time.  There  may  be   some  error  or  default  at  the  recipient’s  end,  which  prevents   receipt  at  the  time,  contemplated  and  believed  in  by  the   sender.       11  of  16   © Tham Zhi Yang. 2012  Offer  and  Acceptance   Acceptance  in  various  scenarios     Acceptance   The  general  proposition  is  that  there  cannot  be  acceptance  by   by  Silence   silence.  Acceptance  must  take  some  form  of  objective  manifestation     of  the  offeror’s  intention  through  positive  action.   -­‐ Rationale  is  that  no  one  should  be  able  to  force  a  contract   upon  an  unwilling  party     Felthouse  v  Bindley  (1862)   The  court  held  there  was  no  contract  formed  as  mere  mental   assent  of  the  part  of  the  defendant  was  insufficient,  and  the   ownership  of  the  horse  had  not  passed  to  the  plaintiff  (uncle).   Some  of  positive  action  was  required  for  a  valid  acceptance.     Exception     Inferring  when  the  offeree  wants  his  silence  to  be  regarded  as   acceptance  is  when  he  says  so.     Re  Selectmove  Ltd  (1995)   The  English  Court  of  Appeal  found  that  it  was  in  fact  the   offeree  who  had  undertaken  that  he  would  communicate   with  the  offeror  if  he  did  not  desire  to  conclude  the  contract.   The  offeror  imposed  on  the  offeree  the  terms  of  acceptance   by  his  silence.   Acceptance   The  general  rule  is  that  a  person  cannot  accept  an  offer  of  which  he   even  when   has  no  knowledge.   ignorant  of     the  offer   R  v  Clarke  (1927)     The  Australian  High  Court  held  that  the  defendant  could  not   claim  the  reward  offered  by  the  Australian  Government  even   as  he  provided  information  leading  to  the  conviction  of  the   murders  of  two  policemen  as  he  was  ignorant  of  the  reward   at  that  time.     The  motive  of  the  person  claiming  the  reward,  however,  is  irrelevant   as  long  as  he  has  knowledge  of  the  reward.     Williams  v  Cawardine  (1833)   The  court  held  that  the  plaintiff  was  entitled  to  the  reward   even  as  she  gave  the  information  leading  to  the  discovery  to   the  murderer  to  ease  her  conscience  and  not  for  the  reward,   as  she  knew  about  the  reward  beforehand.       Cross  Offers   There  is  no  contract  in  the  case  of  cross-­‐offers.  Cross-­‐offers  happen     when  two  parties  send  offers  to  each  other  in  identical  terms  and  at   12  of  16   © Tham Zhi Yang. 2012  Offer  and  Acceptance   about  the  same  time,  and  their  letters  cross  each  other  in  transit.       There  can  be  no  valid  acceptance  in  this  case  as  the  offeree  has  no   knowledge  of  the  offer  at  the  relevant  time.       Conduct   Acceptance  can  take  place  through  conduct     Brogden  v  Metropolitan  Railway  (1877)   The  House  of  Lords  held  that  a  contract  had  been  concluded,   where  the  acceptance  was  done  when  defendant  placed  its   first  order  under  the  terms  of  the  agreement,  or  when  the   coal  was  supplied.  Approval  of  the  agreement  was  done  by   the  conduct  of  the  defendants.       Battle  of   If  counter  offers  are  constantly  being  made  in  a  particular   Forms   transaction,  no  concluded  contract  can  ensue  as  each  counter  offer     destroys  the  original  offer  and  itself  constitutes  a  new  offer.  This   could  lead  to  an  endless  exchange  resulting  in  no  contract,  “battle  of   forms”.     Butler  Machine  Tool  Co  v  Ex-­‐Cell-­‐O  Corporation  (England)   Ltd  (1979)   The  English  Court  of  Appeal  held  that  the  contract  was   concluded  on  the  defendant’s  terms  and  that  the  plaintiff’s   covering  letter  was  intended  to  identify  the  price  and  identity   of  the  machine.  Acceptance  was  complete  only  when  the   plaintiff,  concedes  by  way  of  unqualified  acceptance,  as  they   had  signed  the  tear  off  slip  stated  “We  accept  your  order  on   the  Terms  and  Conditions  stated  theron.”                                     13  of  16   © Tham Zhi Yang. 2012  Offer  and  Acceptance   Certainty  and  Completeness  of  Acceptance     A  contract  will  come  into  existence  as  a  result  of  offer  and  acceptance  only  if  the   terms  of  that  agreement  are  both  certain  and  complete.  There  may  be  no   enforceable  contract  if  the  agreement  is  conditional  incomplete  or  vague     Subject  to   There  is  no  binding  contract  when  parties  may  enter  in   contract   agreements  “subject  to  contract”  or  “Terms  and  conditions  will  be   agreed  upon  later”.     Winn  v  Bull  (1877)       Lock  in  Vs  Lock   Lock  in  Agreement  to  negotiate  between  parties  on  a  particular   Out   matter  with  view  to  reaching  a  agreement   Agreements       Lock  Out  Agreement  to  negotiate  with  third  parties  with  regard  to   a  particular  matter     Walford  v  Miles  (1992)     The  House  of  Lords  held  that  the  agreement  to  negotiate  a   lock  in  agreement  was  unenforceable  for  uncertainty.   There  was  in  no  duty  to  negotiate  in  good  faith.       The  agreement  not  to  negotiate  with  third  parties  was  also   not  enforceable  as  it  did  not  specify  how  long  it  was  to  last.   It  may  be  enforceable  if  it  specified  a  time  limit  on  its   duration.       Performance   Once  an  agreement  has  started  to  be  performed,  the  courts  are   Carried  Out   likely  to  hold  there  is  a  contract.  Where  necessary,  the  courts  may   imply  terms  to  give  effect  to  the  contract.  Even  when  not  possible,   the  party  who  received  valuable  benefit  under  agreement  could  be   ordered  to  pay  on  the  basis  of  quantum  meruit.     Vagueness  Vs   The  courts  are  willing  to  uphold  contracts  where  possible  by  filling   Incompleteness   the  gaps.  The  court  may  avail  of  a  definite  formula  if  there  is  one,   or  take  into  consideration  a  previous  course  of  dealing  between   the  parties  or  a  trade  practice     Sudbrook  Trading  Estate  v  Eggleton  (1983)   The  House  of  Lords  held  that  the  courts  could  treat  the   agreement  as  if  it  were  one  to  pay  a  reasonable  price,   which  was  to  be  reached  by  applying  objective  standards.       Exception     14  of  16   © Tham Zhi Yang. 2012  Offer  and  Acceptance   Vaguess  may  overlap  with  incompleteness,  as  the  agreement  may   be  too  vauge  on  a  particular  matter  that  it  can  be  considered   incomplete     Scammelll  and  Nephew  Ltd  v  Ouston  (1941)   The  House  of  Lords  held  that  there  was  no  contract   between  the  parties  because  the  agreement  on  hire   purchase  terms  was  so  vauge  it  could  not  be  given  a   definite  meaning,  with  questions  like  frequency  of  payment   being  left  out.  The  parties  were  required  to  each  further   agreement  before  a  contract  could  be  concluded.                                                                           15  of  16   © Tham Zhi Yang. 2012  Offer  and  Acceptance   Emails,  Postal  Acceptance  Rule  and  Electronic  Contracts  Act     The  receipt  principle  under  section  13(2)  of  the  ETA  applies  in  this  scenario   since  B  had  sent  the  email  addressed  to  A  correctly  and  the  email  would  have   reached  A  if  not  for  the  service  glitch.     Under  the  ETA,  communication  is  defined  as  any  statement  declaration  demand   notice  request  offer  or  the  acceptance  of  an  offer  that  the  parties  are  required  to   make  or  choose  to  make  in  connection  with  the  formation  or  performance  of  a   contract.  Electronic  communication  meas  any  communication  that  the  parties   make  by  means  of  electronic  records.  The  description  of  emails  sent  thus  fit  the   description  and  parameters  set  out  by  the  definitions  set  out  in  the  ETA.     Hence  the  time  of  notice  under  the  receipt  principle  …   As  a  result  of  the  application  of  these  rules,  it  could  then  be  said  that  no  valid   acceptance  had  occurred  and  that  no  contract  had  been  formed.  Hence  there   would  also  be  no  breach  of  contract  …       However,  the  prior  argument  assumes  that  emails  are  a  form  of  instantaneous   communication  and  that  the  general  rule  should  apply.  Nevertheless,  it  still   remains  unproven  by  hard  fact  that  emails  are  instantaneous  forms  of   communication  and  perhaps  the  postal  acceptance  rule  should  be  applied  in  this   case.  To  decide  between  the  general  rule  and  the  postal  acceptance  rule,  I   contend  that  the  local  obiter  made  by  Justice  VK  Rajah  be  taken  into   consideration.     In  the  local  Singaporean  context  of  Chwee  Kin  Kiong  v  Digilandmall.com.  under   Section  98  and  99  Justice  VK  Rajah  mentions  email  communications  as  part  of  his   judgement.  “Once  and  offer  is  sent  over  the  internet,  the  sender  loses  control   over  the  route  and  delivery  time  of  the  message.  In  that  sense,  it  is  akin  to   ordinary  posting.”     Following  this  line  of  thought  in  S98  it  could  be  said  that  the  postal  acceptance   rule  should  apply.  Therefore  the  despatch  principle  which  states  that  the  time  of   despatch  of  an  electronic  communication  should  be  the  time  that  the  time  the   information  leaves  the  system  that  it  within  the  control  of  the  sender.     Therefore,  applying  this  rule,  the  time  of  acceptance  was…   As  a  result  of  the  valid  acceptance,  a  contract  has  been  formed  …       It  seems  that  both  schools  of  thought  are  incredibly  strong  and  the  cogency   match  each  other  inch  for  inch.  However,  referring  to  the  section  99  of  VK   Rajah’s  obiter  in  Chwee  Kin  Kiong  v  Digilandmall.com.  We  realise  that  there  is   one  more  factor  which  has  to  be  taken  into  consideration.     That  is  the  actual  construction  of  the  case.  In  CKK  v  digilandmall.com.  Vk  Rajah   said  in  obiter  that  a  default  rule  should  be  implemented  for  ccertainty  whilst   accepting  that  such  a  rule  should  be  applied  flexibly  to  minimise  unjustness.  He   then  went  on  to  construct  the  case  and  determine  the  usage  of  the  rules.             16  of  16   © Tham Zhi Yang. 2012  Offer  and  Acceptance   Drawing  the  parallel  to  this  case,  the  email  of  acceptance  was  sent  to  A  at  an   appropriate  time  before  the  offer  had  lapsed.  This  showed  that  B  had  stuck  by   the  rule  set  out  in  the  game.  However,  the  fault  lied  on  A’s  ISP  which  crashed.   Therefore  the  brunt  of  this  mistake  should  be  thus  beared  by  A  whose  ISP  had   crashed.  Applying  this  chain  of  thought,  the  despatch  principle  and  the  postal   acceptance  rule  should  be  applied  concluding  that  A  is  liable  for  a  breach  of   contract.     However,  oncemore,  the  legitimacy  of  such  a  claim  that  the  fault  should  lie  with   A  is  highly  disputable.  First  and  foremost,  A  did  not  intend  to  make  the  mistake   and  the  mistake  was  way  beyond  A’s  control.  Therefore  it  can  be  argued  that  A   should  not  bear  the  burden  of  the  fault.       To  refute  this  school  of  thought,  A  had  a  choice  over  the  ISP  he  subscribed  to  and   hence  it  could  then  be  proven  that  he  had  an  actual  role  to  play  in  making  the   bad  decision  of  choosing  the  wrong  ISP.  Hence  A  had  to  be  liable  for  the  poor   judgement  that  he  has  made.     17  of  16   © Tham Zhi Yang. 2012