Invitations to Treat & Offers - Ads, Auctions, Tenders Flashcards
FISHER v BELL [1967] 1 QB 394
Goods on display in a shop window are generally an invitation to treat
In Fisher v Bell [1961] 1 QB 394, the defendant was charged with offering for sale a flick knife contrary to s 1(1) of the Restriction of Offensive Weapons Act 1959. He had displayed the knife in his shop window labelled ‘Ejector knife -4s’ (4s (ie 4 shillings) was the price of the knife). ). The court held that the display of the knife was simply an invitation to treat and acquitted the defendant of the charge.
A display of goods may amount to an offer in very limited circumstances where there is a clear intention to be bound (eg a display of goods in a special sale). It is likely that the display of goods on a website will be treated in the same way as goods on display in a supermarket or shop and so amount to an invitation to treat.
PHARACEUTICAL SOCIETY GB v BOOTS CASH CHEMISTS [1953] 1 QB 401, CA
Goods on display in supermarkets and self service shops are generally an invitation to treat
If goods on display were held to be an offer then a customer might be regarded as accepting that offer as soon as he selected the goods and put them in the trolley or basket. If that was the case the contract would be made at that point, and the customer would be unable to change his mind and put the goods back. The customer would be bound to buy or be in breach of contract. This argument was used by counsel for the defendant in Pharmaceutical Society of Great Britain v Boots Cash Chemists. (b) The customer offers to buy the goods when he presents them at the payment point, and acceptance takes place when the shop takes payment for the goods (Pharmaceutical Society of Great Britain v Boots Cash Chemists.
PARTRIDGE v CRITTENDEN [1968] 1 WLR 1204
Advertisements are generally regarded as an invitation to treat.
An advertisement will normally be an invitation to treat (Partridge v Crittenden), but in exceptional cases may be an offer if there is a clear intention to be bound - see, for example, Carlill v Carbolic Smoke Ball.
Here the defendant was charged with ‘offering for sale’ a live wild bird contrary to s 6(1) of the Protection of Birds Act 1954. He had placed the following advertisement in a periodical: ‘Bramblefinch cocks, bramblefinch hens 25s each.’ (25s (ie 25 shillings) was the price of the birds). The court held that the defendant was not guilty of the offence, as the advertisement was simply an invitation to treat (ie inviting the public to offer to buy a bird at 25s). If such advertisements were offers, it would mean that anyone asking for the advertised goods would be accepting, in which case it would be a problem if the advertiser had run out of stock.
CARLILL v CARBOLIC SMOKE BALL CO [1893] 1 QB 256, CA
An advertisement can constitute an offer if there is a clear intention to be bound. An offer can be made to the world. The need for acceptance to be communicated can be waived.
Carlill therefore is authority for the proposition that an advertisement can constitute an offer to ‘the world’ (that is anyone who learns of it), and that it may, by the way in which it is stated, waive the need for communication of acceptance prior to a claim under it.
Advertisements of reward, then, are offers, but other types of advertisement will usually be invitations to treat. However, if there are special circumstances which show an intention to be bound, an advert may amount to an offer. Each case depends on what the court interprets as the objective intention behind the advertisement.
In Carlill v Carbolic Smoke Ball, the reason the court dismissed the plea that the advertisement was a mere puff was the fact that the defendant claimed to have deposited £1,000 with Alliance Bank as evidence of its sincerity. As a result of that claim, a reasonable person reading the advertisement would treat the promise to pay £100 as one that was to be taken seriously and one which could create a binding obligation in the factual situation which had arisen. The advertisement was therefore an offer.
The defendant’s plea that the advertisement had not been addressed to specific persons was not seen as a problem by the court. Here the offer was being made to anyone, such as Mrs Carlill, who fulfilled the condition stated in the advertisement. The court drew an analogy with an offer of reward which can be accepted by anyone who fulfils the condition.
In relation to the defendant’s plea that Mrs Carlill should have given them notice of her acceptance, the court again drew an analogy with the reward cases and held that from the wording of the advertisement the Carbolic Smoke Ball Company could be taken as having waived the need to communicate acceptance. The company could not have expected every purchaser of the smoke ball to contact them, but only those purchasers who used the smoke ball (as directed) and then caught influenza.
BARRY V DAVIES (T/A HEATHCOTE BALL & CO [2001] 1 WLR 1962, CA
In a ‘without reserve’ auction the promise to accept the highest bid is an offer of a unilateral contract.
An auctioneer was instructed to sell two machines. Mr Barry had been told by the auctioneer that the sale was to be ‘without reserve’. The machines were new and had a list price of £14,000 each. Mr Barry was the only person interested. He bid £200 for each machine. The auctioneer refused to accept his bid and withdrew the machines from the sale. Mr Barry sued the auctioneer for breach of contract.
The court decided that there was a contract between the auctioneer and Mr Barry. If an auction is advertised as being ‘without reserve’, the auctioneer is effectively promising to sell to the highest bidder (because there is no reserve price). In other words, he is saying, ‘If you make the highest bid, I will sell the lot to you’. Such a promise amounts to an offer of a unilateral contract (ie a promise inviting an act). Here Mr Barry had accepted the auctioneer’s offer of a unilateral contract by performing the required act, ie making the highest bid. Consequently, the auctioneer was held to be in breach of contract and Mr Barry was awarded damages representing the difference between the value of both machines and what he bid for them (ie £27,600). 2. Mr Barry could not have sued the owner of the machines as he had no contract with the owner
Unilateral Offer
An offer of a unilateral contract – promise in return for an act. As its name suggests the commitment is one-sided. The promisor is bound to perform if, and only if, the person (or persons) to whom the promise is made performs the specified act.)
Bilateral Offer
Bilateral contract arises where one party makes a promise in return for a promise.
WILLIAMS V CARWARDINE (1833) 5 C & P 566
Advertisements of a reward will normally be offers.
However, an advertisement of a reward has traditionally been treated as an offer as there is an intention to be bound as soon as the information is given. Treating the advertisement of a reward as an offer means that the money has to be paid once the offer is accepted by the supply of the information. No negotiation is involved. This should encourage people who have information to come forward.
Williams v Carwardine is another case which involved an offer of reward for information leading to the conviction of a murderer. The claimant knew of the reward, but in fact provided the information because she was dying and wanted to ease her conscience. The court held that this did not preclude a valid acceptance of the offer.
Spencer v Harding
Companies are free to choose whichever tender they wish to accept.
Companies are free to choose whichever tender they wish to accept.
Harvela Investments Ltd v Royal Trust Company of Canada Ltd [1986] AC 207, HL,
Normally, a requestor of tenders is free to accept or reject any tender to do the work, even if it is the lowest. This is because the tender is an offer and the bilateral contract is controlled by the requestor’s decision as to which bid to accept (Spencer v Harding).
However, if the requestor has expressly undertaken to award the work to whichever party submitted the lowest tender, it would be wrong not to recognize that promise. In Harvela Investments Ltd v Royal Trust Co. of Canada (CI) Ltd (1986), Lord Diplock considered this promise to amount to a unilateral offer and therefore adopted a two-contract analysis of the tender situation.
Blackpool & Fylde Aero
Club Ltd v Blackpool Borough Council [1990] 1 WLR 1195, CA.
Council was in breach of an implied term to consider any tender that was submitted in accordance with the detailed procedure set out in the invitation to tender.
An obligation to consider conforming tenders might be implied from the circumstances.
An obligation to consider tenders received before a set deadline was implied on the basis that the council had invited a limited number of parties to submit tenders according to a prescribed procedure.
The Aero Club had been granted a number of concessions to operate pleasure flights from Blackpool airport. When the last concession was nearing expiry, the council sent invitations to tender to the claimant and six other interested parties. The invitation said that the tenders had to be received not later than noon on 17 March 1983. The Aero Club posted its tender in the Town Hall letter box at 11am on 17 March. The letter box was supposed to be emptied at noon each day, but due to an oversight was not emptied at noon on 17 March. Consequently, the claimant’s tender was recorded as late and not considered. The Aero Club sued for breach of an implied promise that a tender, returned on time, would at least be considered
