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Question Seminar 3


In this question, Brown & Co offered to sell steel for £20.000 on 5th October and by email to Khan &
Co. But was it an offer or an invitation to treat? An offer is an expression of willingness to contract
on specified terms, made with intention that is to become binding as soon as it is accepted to the
person which is addressed to, Harvey v Facey, Loftus v Roberts. While, an invitation to treat is a
preliminary statement expressing a willingness to receive offers, Fisher v Bell, Partridge v Crittenden.
Taking in consideration both meanings, it can be said that Brown & Co made an offer to Khan & Co,
since they made an offer including the price, with all terms fixed. This means that, Brown & Co, had
consideration and intention to create legal relationship, so it was an offer.

Khan & Co wrote back by letter on 6th October saying they would pay £17.500 and if Brown & Co
agree, they should accept due the 12th October. In this sentence, Khan & Co made a counter offer to
Brown & Co. But what is a counter offer? A counter offer is when an offeree responds to an offer by
making an offer on different terms, which means that it will destroy the original offer, Hyde v
Wrench. So, Khan & Co by saying that they would pay £17.500 instead of the original £20.000, Khan
& Co changed the terms of the offer, which means that the original offer was destroyed by the new
terms fixed by Khan & Co. Well, how could I know it was not just a request for information? A
request for information is a mere request for information, so it is treated differently to a counter
offer, Stevenson v McLean, and in this case, it was not a request of information, because Khan & Co
stated that Brown & Co had to let them know if they accept the new terms or not by the 12th

Brown & Co decided to accept the new offer by letter, which it would be post on the 8th October. If
communication was by post and the letter was properly stamped and addressed, the acceptance of
the offer would take place whenever the letter was posted, by the postal rule, Adams v Lindsell,
Holwell Securities v Hughes. This means that, even if the letter would arrive after the 12th October, if
it was properly stamped and addressed, it would be easy to prove that the letter was posted on the
8th October, which means that, even though, Khan & Co only received it after 12th October , Brown &
Co, accepted before it and sent it before the due date, so there would be a contract made.

On the morning of 7th October, Khan & Co entered in a contract with Steel Supplies, which means
that, in case of Brown & Co accepting Khan & Co offer, Khan & Co, would have to breach the
contract with either one of the companies, since they would have binding to both companies.

On the afternoon of 7th October, Brown & Co revoked their acceptance by phone. What is a
revocation? Revocation is the rescinding, withdrawal or annulling of an offer before the acceptance
takes place unless there was already paid the deposit, Bryne v Van Tienhoven. Since in this case,
Khan & Co did not had paid any deposit, this means that Brown & Co could revoke their acceptance.

On the morning of 8th October, the secretary of Brown & Co posted the acceptance letter to Khan
and Co. What is acceptance? Acceptance is the method of communication to accept an offer, as it
was said it is a method of communication, which means, to an offer be accepted, it must be
communicated and both parties must know it has been communicated. As Lord Denning stated in
the case of Entores v Miles Far East Co, if someone shout across the river to someone an offer, and
the second party shout the acceptance and at the same time an airplane passes by the river, making
the first party to not understand the communication, this means that acceptance was not made,
since both parties were not known of the communication. In other words, if acceptance is not
properly communicated, there would not be a binding contract.
In conclusion, since Brown & Co, revoked the acceptance before the letter was posted, this means
that they did not have a contract with Khan & Co, when the letter was posted. It also means that,
Khan & Co, in case of Brown & Co did not revoked the offer, Khan & Co would be in trouble because
they would have to breach the contract with either company, leading them to have to pay for
damage. Also, by Brown & Co revoking the offer, it would mean that there would be a good contract
made between Khan & co and Steel Supplies.

b) Taking in consideration, everything said above, if the letter was posted on the morning of 7th
October, even if they revoked on the afternoon of 7th October as said on the question, and if the
letter was well addressed and stamped, this means that the revocation would no longer be
acceptable, so there would be a binding contract between Brown & Co and Khan & Co. Which, also
means that if Khan & Co had entered in a contract with Steel Supplies, they would probably be in a
bad situation, since they would breach a contract with either company and pay by damages to the
company who Khan & Co breach contract with.