Offer Flashcards
What is the legal definition of an offer?
A clear and unambiguous statement of the terms upon which the offeror is willing to contract should the offeree decide to accept.
How is an invitation to treat different than an offer?
With an invitation to treat you are merely inviting offers.
Fisher v. Bell [1961]
British case
The defendant was charged with the offence of offering for sale a flick knife.
The defendant displayed such a knife in his window. The court had to decide whether by displaying his goods in such a manner the shopkeeper was “offering” them for sale.
The defendant was acquitted by the Court with Lord Parker CJ stated that “the display of an article with a price on it in a shop window is an invitation to treat.”
Pharmaceutical Society of Great Britain v. Boots Cash Chemists [1953]
British case
The defendant was being prosecuted under s 17 of the Pharmacy and Poisons Act 1933 for allowing the sale of a listed poison to be effected without the supervision of a registered pharmacist.
The Court decided that the goods displayed were merely invitations to treat, the customer made an offer when he presented the goods for payment at which stage the pharmacist could accept or reject the offer. The contract for sale took place at the cash desk and not when the goods were placed in the basket.
Lord Goddard CJ referred to “the well-established principle that the mere exposure of goods for sale by a shopkeeper indicates to the public that he is willing to treat but does not amount to an offer to sell.”
To hold otherwise would mean that the shop could insist that a shopper pay for goods which he had picked up and then returned to the shelf which is at variance with the commonly accepted practice in self-service shops.
Lefkowitz v. Great Minneapolis Surplus Store (1957)
American case
Here the defendant store placed a newspaper advertisement offering to sell three furs worth $100 for $1 at 9am sharp on Saturday on a “first come, first served basis”. A week later the shop published a second advertisement offering two new mink scarves worth $90 dollars for $1.
Both times he was turned away for being a dude, store personnel claiming it was a “house rule” that these advertisements only applied to ladies.
The Supreme Court of Minnesota held that the advertisement was an offer and not an invitation to treat with the Court noting that “…where the offer is clear, definite and explicit, and leaves nothing open for negotiation, it constitutes an offer, acceptance of which will complete the contract.”
On the issue of the house rules the court held that the defendant was not entitled to confine their offer to women only because no such restriction was explicit in the offer itself with the Court noting that “while an advertiser has the right at any time before acceptance to modify his offer, he does not have the right, after acceptance to impose new or arbitrary conditions not contained in the published offer.”
What is the difference between a bilateral offer and a unilateral offer?
A bilateral offer is an exchange of promises. (You get a cup of coffee in return for handing the coffee shop 4 EUR)
A unilateral offer is one party promising to do something in return for an action. (100 EUR award for return of lost pet.)
Advertisements are (generally) examples of unilateral offers.
Carlill v. Carbolic Smoke Ball Co [1893]
British case
The defendants manufactured a product called a “carbolic smoke ball” which they advertised in the newspapers as being so efficient that the defendants would pay £100 to any person who purchased a smoke ball and used it as directed and contracted influenza.
The advertisement further stated that a sum of £1000 had been deposited in the Alliance Bank as evidence of the manufacturers’ sincerity.
Mrs Carlill contracted influenza despite her having purchased and used the smoke ball as directed. She subsequently claimed that she was entitled to the £100.
The court said that with a unilateral contract performance constituted acceptance and the right to notification is waived.
The defendant said that there was no consideration. The court said that consideration was the buying and using of the product in the agreed manner.
The Court concluded that as the defendant company had deposited £1,000 in the bank this showed that the promise made in the advertisement could not be dismissed as mere sales puff but constituted an offer and in all the circumstances the plaintiff was entitled to the £100.
When does an offer terminate?
- Upon revocation of the offeror. Revocation must be communicated to offerees but doesn’t have to be communicated by offeror.
- Rejection - if an offer is rejected, the offer terminates. This applies even if a counter offer is made. Counter offers are seen to extinguish the original offer.
- Lapse of time - If not expiration date is specified, offer is considered to have terminated after a reasonable amount of time. What is considered reasonable is varied by the subject matter of the contract. A stock price may be valid for mere seconds, while durable items may be longer.
- Death of the offeror.
Leonard v. PepsiCo, District Court of New York 4/8/99
American case
The alleged offer was at most an invitation to treat as no reasonable person could have believed that the advertisement actually offered Pepsi drinkers a fighter plane. It was an advertising puff especially as you would not use the jet to get to school and to amass the points you would have to drink 7 million Pepsis or roughly 190 a day for the next 100 years.
Dickinson v. Dodds (1876)
British case
The defendant offered to sell property to the plaintiff for £800 stating that the offer would be open until 9am on Friday 12th June.
On the Thursday afternoon the plaintiff was informed by a third party that the property had been sold to somebody else. This third party was a stranger to the transaction and had not been asked by the defendant to inform the plaintiff that the property had been sold.
Armed with this knowledge on Thursday evening the plaintiff then handed in a letter of acceptance and, subsequently, sued for breach of contract.
The Court said that the revocation was reasonably communicated to the plaintiff and was valid. The purported acceptance came too late as the plaintiff knew that the vendor no longer wished to sell to him.
Hyde v. Wrench (1840)
British case
A property was offered for sale for £1,000. The plaintiff initially indicated that he was willing to pay £950 for the property and when this was refused he attempted to accept the offer to sell it for £1,000 but the defendant refused to complete the sale. The court took the view that the original offer had been terminated by the plaintiff’s counter offer.
Boyers v Duke
Irish law
Quotation of a price does not constitute an offer.
The defendant was charged with the offence of offering for sale a flick knife.
The defendant displayed such a knife in his window. The court had to decide whether by displaying his goods in such a manner the shopkeeper was “offering” them for sale.
The defendant was acquitted by the Court with Lord Parker CJ stated that “the display of an article with a price on it in a shop window is an invitation to treat.”
Fisher v. Bell [1961] - British law
The defendant was being prosecuted under s 17 of the Pharmacy and Poisons Act 1933 for allowing the sale of a listed poison to be effected without the supervision of a registered pharmacist.
The Court decided that the goods displayed were merely invitations to treat, the customer made an offer when he presented the goods for payment at which stage the pharmacist could accept or reject the offer. The contract for sale took place at the cash desk and not when the goods were placed in the basket.
Lord Goddard CJ referred to “the well-established principle that the mere exposure of goods for sale by a shopkeeper indicates to the public that he is willing to treat but does not amount to an offer to sell.”
To hold otherwise would mean that the shop could insist that a shopper pay for goods which he had picked up and then returned to the shelf which is at variance with the commonly accepted practice in self-service shops.
Pharmaceutical Society of Great Britain v. Boots Cash Chemists [1953] - British law
Here the defendant store placed a newspaper advertisement offering to sell three furs worth $100 for $1 at 9am sharp on Saturday on a “first come, first served basis”. A week later the shop published a second advertisement offering two new mink scarves worth $90 dollars for $1.
Both times he was turned away for being a dude, store personnel claiming it was a “house rule” that these advertisements only applied to ladies.
The Supreme Court of Minnesota held that the advertisement was an offer and not an invitation to treat with the Court noting that “…where the offer is clear, definite and explicit, and leaves nothing open for negotiation, it constitutes an offer, acceptance of which will complete the contract.”
On the issue of the house rules the court held that the defendant was not entitled to confine their offer to women only because no such restriction was explicit in the offer itself with the Court noting that “while an advertiser has the right at any time before acceptance to modify his offer, he does not have the right, after acceptance to impose new or arbitrary conditions not contained in the published offer.”
Lefkowitz v. Great Minneapolis Surplus Store (1957)
American law
