Key Cases Flashcards
Smith v Hughes 1871
Supports the principle that courts apply an objective test when considering whether a contract has been formed.i.e. Would a reasonable person consider that a contract has been formed given the circumstances and conduct of the other party.
In this case the claimant agreed after sampling some of the defendant’s oats agreed to enter a contract to purchase oats. The sample oats and the oats being sold were the same and were new oats, however the defendant mistakenly believed they were old oats which is why he agreed to the sale.
The courts found that the was a contract as a reasonable person in the defendants position would believe there was one.
The courts also ruled that the defendant did not mislead the claimant by remaining silent about what oats he was selling as he never described them as old oats
Harvey v. Facey 1893
This case illustrates the difference between an offer and an invite to treat.
In this case the claimant wrote to the defendant asking them what cash price they would be willing to sell Bumper Hall Pen at. The defendants replied saying the minimum cash price would be £900.
The claimant replied confirming he accepted the offer to buy the property at £900, however the defendants did not sell to him.the courts confirmed that a recognised offer was only made on the claimants second correspondence and therefore the defendants were free to reject it.
Gibson v. Manchester city council 1979
The claimant was a council tenant. He received correspondence from the council stating that they “may be prepared to sell” the property to him at a stated price and an application form. The claimant completed and returned the application form but the council was no longer interested in selling. The courts found that due to the wording of the letter the offer was only made when the tenant returned the form and therefore the council was within its rights to reject the offer and not sell. The initial communication from the council is considered an invite to treat.
Stoer v. Manchester city council 1974
The defendant was a council tenant who received a letter from the council stating that it was willing to sell its house to him at a stated price. To apply for this he had to sign and return an included ‘agreement for sale’ form which he did.
The council rejected the sale. The courts agreed this was a breach of contract as the wording on the form made it clear the original letter was an offer and the return of the ‘agreement for sale’ form was the agreement therefore a contract existed.
Pharmaceutical society of Great Britain v. Boots cash chemist 1953
The pharmaceutical society of Great Britain took action against boots for selling pharmaceutical products contrary to s.18 of the Pharmacy and poisons Act 1933.
Certain drugs are only able to be sold under the supervision of registered pharmacists. The concern was that the self service style ( as opposed to the traditional shop style of all products being kept behind the counter) meant that this was not being adhered to.
The court found for Boots, stating that the goods on the shelves were not offers but were invites to treat, and the offer was made to buy them once they were presented at the counter which was manned by a registered pharmacist.
Fisher v. Bell 1967
Criminal case in which a shop which displayed a flick knife. S. 1(1) of the Restriction of offensive weapons Act 1951 forbids the sale of these knives.
The courts ruled that the window display was not an offer to sell but an invite to treat.
Carlill v. Carbonic smoke ball company ltd. 1893.
The carbonic smoke ball company manufactured a patented medicine called the smoke ball. They took out an advert in a newspaper to promote their product in which they offered £100 to anyone who contracted influenza after using the smoke all 3 times a day for two weeks as directed in the instructions.
They stated they had deposited £1000 in the bank for such claims.
British car auctions v. Wright 1972
The defendant was prosecuted for offering an unroadworthy vehicle for sale. The prosecution failed as the vehicle was a lot in an auction and therefore was an invitation to treat
Warlow v. Harrison 1859
The claimant attended an auction and made a bid on a lot that did not have a reserve price and as advertised as going to highest bidder. The claimant bid 60 guineas but the owner bid 61 and the auctioneer put down his hammer on 61.
The claimant took action as he was the highest legitimate bidder but the courts were unable to conclude that a contract existed as there had been no existence.
Barry v. Davies (Heathcote Ball company )2000
The claimant took part in an auction that was advertised as without reserve. He bid £200 each on a pair of machines used in the motor industry and was the highest bidder. The auctioneer put down his hammer on the claimants bid. The seller of the machines however refused to sell to the claimant as the machines were worth £14000 each.
The courts found for the claimant as there was a contract breach and awarded him £27600 in damages.
Spencer v. Harding 1870
An invitation for tenders is an invite to treat.
In this case the defendant sent a circular requesting tenders for the purchase of stock in trade.
The claimant gave the highest bid but the defendant refused to sell.
The courts ruled there was no contract as there had been no acceptance. The claimants bid was the offer and the defendant was not bound to accept it. They did note that there may be situations where this would be different. E.g if the circular had stated the highest offer would be successful.
What is the legal principle in Blackpool & Fyld Aero club ltd v. Blackpool borough council 1990
The party issuing invites is bound to consider ( but not necessarily accept) any tender submitted correctly before any deadline.
