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9084 · 3.1.2

Offer and acceptance — practice questions

Practice and worked examples for 9084 Offer and acceptance. Short previews only — attempt the full question in MarkScheme against the official scheme.

Worked example 1

A sells land to B for £100,000. B replies offering £95,000. A refuses. B then writes accepting the original £100,000 offer. Has a contract been formed?

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Original offer: A's offer to sell at £100,000 is a valid offer.

Counter-offer: B's reply offering £95,000 is a counter-offer, not acceptance — it destroys A's original offer (Hyde v Wrench).

Attempted acceptance: B's later letter accepting £100,000 is not valid acceptance — there is no live offer to accept. B's counter-offer was itself an offer that A rejected.

Conclusion: No contract formed. B would need A to make a fresh offer at £100,000.

Worked example 2

On 1st June, Sapphire Ltd emails Blue Ltd offering to sell a specialised cutting machine for £50,000, stating the offer is open until 5 pm on 8th June. On 3rd June at 10 am, Blue Ltd posts a letter accepting the offer. On 4th June, Sapphire Ltd receives a better offer and sells the machine to another company. On 5th June at 9 am, Sapphire Ltd emails Blue Ltd revoking their offer. Blue Ltd's director reads the revocation email on 6th June at 11 am. Sapphire Ltd receives Blue Ltd's letter of acceptance on 7th June. Advise Blue Ltd.

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Step 1: Identify the Offer Sapphire Ltd's email on 1st June is a clear and certain offer to sell the machine for £50,000. It is communicated to Blue Ltd.

Step 2: Analyse the Acceptance Blue Ltd posts its letter of acceptance on 3rd June. The postal rule (Adams v Lindsell) states that where post is a reasonable method of acceptance, the contract is formed at the moment the letter is properly posted. Given the offer was open for a week, using the post is likely reasonable.

Calculation of Contract Formation:

  • Offer made: 1st June
  • Acceptance posted: 3rd June, 10 am
  • Contract formed: 3rd June, 10 am

Step 3: Analyse the Revocation Sapphire Ltd attempts to revoke the offer by email on 5th June. The rule for revocation is that it must be communicated to the offeree to be effective (Byrne v Van Tienhoven). The postal rule does not apply to revocation. The revocation was sent on 5th June and received/read on 6th June.

Step 4: Determine the Timeline and Priority

  • Contract formed (by posting acceptance): 3rd June.
  • Revocation communicated (by receiving email): 6th June.

The revocation is ineffective because it was communicated after the contract had already been formed on 3rd June.

Conclusion: A binding contract was formed between Sapphire Ltd and Blue Ltd on 3rd June for the sale of the machine at a price of £50,000. Sapphire Ltd's sale of the machine to another company on 4th June is a breach of their contract with Blue Ltd. Blue Ltd can sue Sapphire Ltd for damages.

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