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Contract Law, Basic Principle of

Offer and Acceptance

Unilateral Contracts
Last updated: 21-Jun-2015

Per Goff LJ in Daulia Ltd v Four Millbank Nominees Ltd [1978] Ch 231, 239:

Whilst I think the true view of a unilateral contract must in general be that the offeror is entitled to require full performance of the condition which he has imposed and short of that he is not bound, that must be subject to one important qualification, which stems from the fact that there must be an implied obligation on the part of the offeror not to prevent the condition becoming satisfied, which obligation it seems to me must arise as soon as the offeree starts to perform. Until then the offeror can revoke the whole thing, but once the offeree has embarked on performance it is too late for the offeror to revoke his offer.

Intense Investments Ltd v Development Ventures Ltd [2006] EWHC 1586 per Coulson J at paras 73-74:

73. An offer of a unilateral contract is made when one party promises to pay the other a sum of money, or do something or to forbear from doing something, if the other party will do, or forbear from doing, something else, but without making any promise to that effect. The classic example of such a contract is where A promised to pay B £100 if B will walk from London to York: see Rogers v Snow [1573] Dalison 94. Another authority often cited in this context is Great Northern Railway v Witham [1873] L.R. 9 C.P. 16. The contract in these cases was described as unilateral because B had not made any counter-promise to perform the stipulated act or forbearance.

74. If a contract is a unilateral contract, the offer can be accepted by fully performing the required act or forbearance: see, for example, Harvela Investments Ltd v Royal Trust of Canada (CI) Ltd [1986] AC 207. In addition, there is no need to give advance notice of any such acceptance to the offeror: see Carlill v Carbolic Smoke Ball Co [1893] 1 QB 256. Furthermore, in the case of a unilateral contract, it is probable that an offer can only be accepted by performance, and not by a counter-promise: see Chitty on Contracts, 29th Edition, Volume 1, para 2-076.

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