Agreement and contractual intention

Question 1

what is an offer?

Answer 1

an offer is an expression of willingness to contract on specified terms, made w/the intention that it is to become binding as soon as it is accepted by the person whom it is addressed.

makes the offer: offeror
person who the offer is addressed to: offeree

Question 2

objective test to the intention of the offeree?

Answer 2

this is how the courts determine whether or not an agreement had been reached.

Therefore, if a reasonable person believed the alleged offeror implied by his words/conduct that he intended to be bound, then this may be sufficent for the offer actually to be valid in law.

Question 3

what is an invitation to treat?

Answer 3

ITT is a preliminary statement expressing a willingness to receive offers.

it is a statement made by a party inviting offers which that party can then accept or reject.

ITT ALWAYS precedes an offer.

Question 4

difficult to distinguish between a genuine offer and a ITT?

Answer 4

this will depend on the intention of the party making the statement, there are certain situations in which the distinction can be made by applying rules of law.

INCLUDING:

• ads (partidge v crittenden)
• self-service/shop window displays
• auctions
• invitations to tender
• mere statements of price

Question 5

ADVERTISEMENTS:

Answer 5

• generally considered to be ITT

Partidge V Crittenden:
FACTS:
- D placed an ad in mag stating ‘bramblefinch cocks, hens 25s each’
- he was prosecuted for ‘offering for sale’ wild birds.

LEGAL PRINCIPLE:
- the court held that the ad was an ITT and NOT an offer.
it was an expression of willingness to recieve offers as the starting point of negoitations.

Question 6

catalogues and price lists

Answer 6

Grainger and Sons V Gough: catalogue is an ITT

Question 7

exceptions w/ adversitements?

Answer 7

under certain circumstances, an advertisement MAY be regarded as an offer… this will be the case if the ad involves a UNILATERAL OFFER: carbolic smoke ball case.

Question 8

what is a unilateral offer?

Answer 8

is made when one party promises to pay the other a sum of money (or to do some other act) if the other will do something (or forebear from doing so) without making any promises to that effect.

Question 9

bilateral contract?

Answer 9

• where a promise is exchanged for a promise.
• offer and acceptance are BOTH promises
• both parties are immediately bound (provided there is consideration and intention to create legal relations)

Question 10

unilateral contract?

Answer 10

• a promise in return for an act
• an ‘if…’ contract-offer is a promise
• offeror is bound only if the specific act is performed (provided there is consideration and intention to create legal relations)

Question 11

Case regarding unilateral adverstisement…

Answer 11

Carlill V Carbolic Smoke Ball Company Ltd
FACTS:
- D sold a patent medicine, ‘smoke ball’
- they places a npaper ad stating that they would pay £100, to anyone who ‘contracts the increasing epidemic influenza, flu etc after using the ball as instructed’
- The C contracted the flu and wanted to claim £100
- The D argued the ad was a ‘mere puff’ and that, in any case, there was no offer made to any particular person
- ‘it was impossible to contract w/the whole world’

LEGAL PRINCIPLE:

• COA held that the offer in the AD was a unilateral offer to the world at large which was accepted by the claimant
• this unilateral offer waived the need for communication of acceptance prior to a claim being made on the basis of it.
• claimant thus entitled to the £100

Question 12

advertisements offering rewards

Answer 12

traditionally treated as offers, rather than ITT, since their is an intention for the offeror to be bound as soon as the information is given…

Williams V Carwardine

Question 13

self-service/shop window displays?

Answer 13

there are INVITATIONS TO TREAT and not an offer.

Question 14

self-service?

Answer 14

Pharmaceutical Society of GB V Boots Cash Chemists:
FACTS:
- the D changed the format of their shop from counter service to self-service. S18 of the Pharmacy and Posions Act 1933, provided that the sale of certain drugs should not occur ‘other than under supervision of a registered pharmacist’
LEGAL PRINCIPLE:
- COA considered whether the contract was formed at the time the cust removed the goods from the shelves (not under the supervision of a registered pharmacist ) OR at the time the goods were presented at the counter for payment (under supervision of pharmacist) it was held : contract formed when goods presented at the cash desk and the display of goods: ITT.

Question 15

what does Boots Cash Chemist mean?

Answer 15

that the offer to purchase is made at the cash desk by the purchaser. The shop is THEN free to accept/reject. This means that shops are NOT compelled to sell goods at the price at which they are displayed, as the purchaser is offering to buy the item at the stated price at the checkout: the shopkeeper can reject that offer if desired.

this principle is also applied to goods at a shop window.

Question 16

display of goods in a shop window… invitation to treat:

Answer 16

Fisher V Bell:

FACTS:

• a shopkeeper displaying flick knife in window
• the offensive weapons act 1959 prohibited ‘offering for sale’ of various offensive weapons, inc these knives
• the shopkeeper was prosecuted under this act

LEGAL PRINCIPLE:

• the prosecution FAILED
• the court held that the display of the knife in the window was an ITT rather than an offer.
• therefore, the shopkeeper was NOT offering it for sale.

Question 17

What is an auction?

Answer 17

AN ITT
each bid = offer
acceptance occurs at the fall of the auctioneers hammer

Question 18

auctions and ITT case…

Answer 18

British Car Auctions V Wright

• D prosecuted for offering unroadworthy vehicle for sale.
• the prosecution FAILED.

LEGAL PRINCIPLE:

• the car had NOT been offered for sale.
• there had only been an ITT (bid)

Question 19

Sale of Goods Act 1979 Section 57 (2)

Answer 19

A sale by auction is complete when the auctioneer announces its completion by the fall of the hammer, or in other customary manner.
AND until the announcement is made… any bidder may retract their bid.

Question 20

auction with no reserve price?

Answer 20

‘without reserve’ : i.e. there is NO minimum price that must be reached before the offer is accepted
then this equates to an offer to sell to the highest bidder which is accepted by the submission of the highest bid.

stated within Harris V Nickerson

Question 21

Harris V Nickerson

Answer 21

auction sale:
furniture in newspaper and claimant wants to buy
the auction being held at a specific location.
BUT furniture is NOT put up for sale, despite the AD.
the claimant sues BUT
issue: is there a contract?
HELD: the court held a unilateral contract BUT no loss is suffered and it is SO speculative… beyond deserving recognition from the law.

Question 22

invitations to tender

Answer 22

normally is an invitation to treat.
therefore, the person making the ITT is NOT bound to accept any of the resources (offers to the tender)

HOWEVER, if the person making the tender states that he will accept the highest offer OR the lowest offer for the supply of goods and services, then the tender may be considered to be either an offer or an invitation to submit offers w/the undertaking to accept the most favourable… concluding the contract at the time that the best offer is communicated (Harvela Investments Ltd V Royal Trust of Canada.)