Contract Law: Acceptance and Termination of an Offer

Introduction of the Issue

Kat saw a poster at Steaks Alive restaurant that invited customers to a challenge where they would not pay for ten steaks eaten within an hour. Although Kat signed up for the challenge and ate ten steaks in 59 minutes, Nikita, the restaurant manager, forfeits the promise, giving her a $50 discount instead. Consequently, she removed the poster from the front window of the business to revoke and withdraw the offer. The court will be convinced that Kat accepted an existing offer, entered into a contract with the restaurant, and deserves compensation.

Law

Australian Woollen Mills Pty Ltd v The Commonwealth defines an offer as the expressed willingness to an agreement once accepted.¹ Carlill v Carbolic Smoke Ball states that the offer could be verbal or written, and its audience may include individuals, teams, or the entire world.² Crown v Clarke requires acceptance to be in response to the existing offer.³ According to Byrne v Van Tienhoven, the revocation or termination of an offer requires communication from the offeror.⁴ Hyde v Wrench stipulates that a counteroffer from the offeree ends the initial offer.⁵ Veivers v Cordingley states that an offer cannot be revoked when consideration is in progress.⁶

Application

According to the definition of an offer in Australian Woollen Mills Pty, the poster displayed on the front window of Steaks Alive constitutes an offer and a willingness to enter into a legal agreement with the public. The requirement was to register for the ‘Steak Eating Challenge’ as a way of accepting the offer. Therefore, Kat accepted the offer by registering for the challenge and was given ten steaks, and a timer was set for one hour. In Crown, an acceptance must be in knowledge of the existence of an offer, which Kat rightly expressed. Therefore, Nikita cannot charge Kat for any of the steaks she ate because all the conditions of the offer were fulfilled. While Hyde states that a counteroffer terminates the initial offer, the idea of a discount was not a counteroffer from Kat but Nikita’s proposal.

After removing the poster from the window, Nikita claims that the offer was ended “just after [Kat] walked in.” In Byrne, revocation or withdrawal of the offer should be communicated before acceptance actions are taken. In Kat’s case, the offer was withdrawn after she had entered the restaurant, and Nikita did not notify her of the withdrawal. Instead, the manager signed her up for the challenge assuming that Kat could not win it. In Veivers, the court determined that when acceptance involves an act, the offer cannot be withdrawn or revoked once the act is being performed. Therefore, Nikita’s withdrawal of the offer after Kat had signed up for the challenge does not end their contractual agreement.

Conclusion

Since Kat stands to win the case and get compensation or be awarded damages, she should sue Steaks Alive restaurant. Kat accepted an offer the restaurant made to the public through writing and met the criterion for the prize, which was free steaks. The offer did not say she would get a discount but rather that the ten steaks would be free. As to the withdrawal of the offer, it does not affect Kat’s contract because it was withdrawn after she had taken action to accept the offer. Therefore, Kat has a strong case against the Steaks Alive restaurant and will get damages.

Bibliography

Australian Woollen Mills Pty Ltd v The Commonwealth (1954) 93 CLR 546.

Byrne v Van Tienhoven (1880) LR 5 CPD 344.

Carlill v Carbolic Smoke Ball Co [1893] 1 QB 256.

Crown v Clarke (1927) 40 CLR 227.

Hyde v Wrench [1840] EWHC Ch J90.

Veivers v Cordingley [1989] 2 Qd R 278.

Footnotes

1. Australian Woollen Mills Pty Ltd v The Commonwealth (1954) 93 CLR 546.
2. Carlill v Carbolic Smoke Ball Co [1893] 1 QB 256.
3. Crown v Clarke (1927) 40 CLR 227.
4. Byrne v Van Tienhoven (1880) LR 5 CPD 344.
5. Hyde v Wrench [1840] EWHC Ch J90.
6. Veivers v Cordingley [1989] 2 Qd R 278.