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B: Correct. Factual causation is the but-for test; the result would have occurred without the act. Authority: R v White [1910] 2 KB 124. A: Wrong, substantial cause is the legal-causation threshold, not factual.
B: Correct. Silence cannot constitute acceptance, even if the offeror attempts to impose it. In Felthouse v Bindley (1862) an uncle wrote to his nephew in similar terms; no contract was formed because acceptance must be communicated.
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Alice advertises her vintage motorcycle online for £4,500. Bob emails saying he would pay £4,000. Alice replies 'I might consider £4,200.' Bob does not respond. One week later, Bob emails accepting at £4,500. Alice has by then sold the motorcycle to Carol. Bob has turned down a similar motorcycle elsewhere, relying on Alice's eventual willingness to negotiate. Bob claims breach of contract.
QuestionAdvise Bob as to whether he has any claim in contract against Alice. In your answer, consider the effect of the counter-offer, whether a contract was formed, and whether promissory estoppel assists Bob.
Alice's online advertisement is an invitation to treat (Partridge v Crittenden [1968]), not an offer capable of acceptance. Bob's email saying he would pay £4,000 is therefore an offer to buy, not a counter-offer, because there was no offer from Alice for it to answer. Alice's reply that she 'might consider £4,200' is not an acceptance of Bob's offer; it is at most an invitation to continue negotiating.
When Bob later emailed agreeing to pay £4,500, he was responding to an advertisement (an invitation to treat), so his email was itself a fresh offer, which Alice never accepted. Accordingly, no contract was formed, and there was no offer by Alice that she needed to revoke before selling to Carol. Even if the advertisement were treated as an offer, Bob's £4,000 email would have been a counter-offer that destroyed it (Hyde v Wrench [1840]), so the later £4,500 'acceptance' would still fail.
Promissory estoppel cannot assist Bob: the doctrine requires a clear and unequivocal promise to abandon strict legal rights (High Trees [1947]). The phrase 'might consider' is insufficiently clear to found an estoppel. Moreover, promissory estoppel cannot be used as a cause of action — only as a shield (Combe v Combe [1951]). Bob therefore has no claim against Alice.
The House of Lords unanimously held that the company was a validly incorporated separate legal entity, entirely distinct from its members and directors. Salomon's secured debentures took priority over the unsecured creditors because the company, not Salomon, owed the debts. The fact that one person owned almost all the shares and was the directing mind did not collapse the distinction between the individual and the corporation.
Lord Halsbury LC emphasised that once a company is duly formed and registered, it is a body corporate with rights and liabilities of its own; the court cannot go behind the legal entity to investigate the motives of the incorporators. Lord Macnaghten stated that the company is at law a different person altogether from the subscribers to the memorandum. There was no fraud or evasion of the law, Salomon's use of the corporate structure was entirely lawful.
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