Offer

Question 1

What is a bilateral contract?

Answer 1

Promise formed by 2 parties

Starting point is offer + acceptance

Question 2

What is an offer?

Answer 2

A promise/ indication by a party that s(he) is prepared to enter into a contract with another party, on certain terms

Question 3

How do the Cts look for to determine if there had been an offer?

Answer 3

Cts will look for some behaviour which indicates a willingness to enter into a contractual agreement
Indication can be done by words or conduct, but MUST be communicated to the potential acceptor

Question 4

What must the term of the offer be?

Why is this important?

Answer 4

Clear - there can be no ambiguity otherwise it may not lead to a valid offer/ contract

Question 5

Does the offer have to include all the terms?

Answer 5

No, it can refer to terms which were discussed in earlier communications

Question 6

What does the term ‘tender’ mean?

Answer 6

Wanting people to bid for it

Spencer v Harding (1870)

Question 7

Spencer v Harding (1870)

Answer 7

Circular issued by the Ds read ‘we are instructed to offer to the wholesale trade by tender the stock in trade…’
Claimants made the highest tender but the Ds refused to grant them the goods
Ct: all they were doing was inviting people to bid
If the had also said that they would guarantee to go into a contract with the highest bidder, there would have been making an offer
Held: the request for tenders was not an offer

Question 8

What was held by the Cts in the case of Spencer v Harding (1870)?

Answer 8

The request for tenders was not an offer

Question 9

What is the distinction between an offer and an invitation to treat?

Answer 9

If a statement will lead to a binding contract by a simple ‘yes’, then it is an offer
It therefore must be clear that the statement/ action indicates an intention to be bound
An intention to be open to negotiations is not an OFFER

Question 10

Gibson v Manchester City Council (1979)

Answer 10

G received a letter which indicated a price for the house + stated as follows:
‘The Corporation may be prepared to sell the house to you…’
The letter instructed G, if he wished to make a ‘formal application’, to complete a form + return it to the Council
HL: the letter from the Council was not an offer
The offer was the formal invitation that G made when he sent the letter to the Council

Question 11

Storer v Manchester City Council (1974)

Answer 11

S signed + returned a document titled ‘Agreement for sale’
Cts: there was a contract
The ‘agreement for sale’ document was deemed to be an offer from the Council - it had all aspects of an offer
When S signed it, it was acceptance of the contract
Cts upheld the contract

Question 12

Fisher v Bell (1961)

Answer 12

D displayed a flick knife in his shop window, with a price tag attached to it
Offensive Weapons Act 1959 prohibited the ‘offering of sale’ of various offensive weapons, including flick knifes
Held: the display of the knife in the window was an invitation to treat rather than an offer
Shopkeeper was therefore not offering it for sale
There was something else that needed to be done for a contract to be formed, couldn’t just pick it up and walk out

Question 13

What did Lord Parker say in the case of Fisher v Bell (1961)?

Answer 13

‘It is clear that according to the ordinary law of contract, the display of an article with a price on it in a shop window is merely an invitation to treat’

Question 14

Is the display of good in a shop window an offer?

What case illustrates this point?

Answer 14

No - they are merely an invitation to treat
Something else has to be done before a contract is formed

Fisher v Bell (1961)

Question 15

Is the display of goods in shops/ self service an offer?

What case illustrates this point?

Answer 15

No - the customers make an offer at the till
The cashier could accept/ reject it
The display of the shelves is an invitation to treat

Pharmaceutical Society of GB v Boots Cash Chemists (1953)

Question 16

Pharmaceutical Society of GB v Boots Cash Chemists (1953)

Answer 16

PS sued Boots for selling poisons (drugs)
Contrary to s18 Pharmacy and Poisons Act 1993
Made it an offence to sell certain drugs without the supervision of a registered pharmacist
PS argued that Boots putting them on the shelve was an offer
When customers pick them up, = acceptance
CA: the sale was made at the cashier’s desk
The customer made the offer at the till, the cashier could accept/ reject it
The display on the shelves was an invitation to treat

Question 17

Partridge v Crittenden (1968)

Answer 17

D placed an advertisement in a magazine indicating that he had bramble finches fro sale at 25 cents each
He was charged under s6 Protection of Birds Act 1954 - offering the sale of a wild bird
Cts applied the limited stock argument
Held: the advertisement was an invitation to treat, not an offer

Question 18

What was the limited stock argument that was applied in the case of Partridge v Crittenden (1968)?

Answer 18

Advertisements that don’t come from the manufacture of goods, it doesn’t make business sense to interpret it as an offer
If you’re not the manufacture, you have a limited stock
If the advert were to be interpreted as an offer, anyone who accepted it would have made a contract with the D
D would be bound by contract to give everyone a bramble finch
If not, there was a breach in contract
Understanding the status of the advert = KEY

Question 19

What was held in the case of Lefkowitz v Great Minneapolis Surplus Stores (1957)?
(American case)

Answer 19

Whether an advertisement will be treated as an offer will be determined by the context in which it appears + the practical consequences of treating it as either an offer or an invitation to treat
An advert can therefore amount to an offer

PERSUASIVE PRECEDENT

Question 20

How is a contract made in an auction?

Answer 20

The lot itself is an invitation to treat
Each bid represents an offer to buy the lot at the price offered
Acceptance occurs at the fall of the auctioneer’s hammer
CL principle
Also upheld by s57 The Sales of Goods Act 1979

Question 21

What does ‘sale without reserve’ mean?

Answer 21

The auctioneer is guaranteeing that they will sell to the highest bidder

Question 22

Barry v Davies (Heathcote Ball + Co) (2001)

Answer 22

2 engine parts, at the value of £14,000 were offered for sale in an auction without reserve
The highest bid was £200 for each
Auctioneer withdrew the goods
Held: the auctioneer was in breach of contract

Question 23

What are tenders generally considered to be?

What case illustrates this?

Answer 23

Invitations to treat
- Spencer v Harding (1870)

There is no obligation unless they specify
- Blackpool + Flyde Aero Club v Blackpool Borough Council (1990)

Question 24

Blackpool + Flyde Aero Club v Blackpool Borough Council (1990)

Answer 24

Ds = local authority that managed the local airport
Had granted the plaintiff a concession to operate casual flights out of the airport
when the concession came up for renewal, tender invitations were sent to the plaintiffs + 6 other companies
Tender had a clause: tenders would not be considered if they missed the time + date stipulated
Town’s clerk failed to empty the letterbox on time
Plaintiff’s tender missed the deadline as a result
D accepted a lower proposal
Plaintiffs brought an action for damages against the Ds for breach of contract
CA: invitations to submit a tender was no more than an offer to receive bids BUT in this circumstance, the parties had a clear intention to create a contract
The failure to consider the plaintiff’s application made them liable

Question 25

What are unilateral offers?

Answer 25

When a party promises to do something if the other will do something specified without making any promise to that effect

Question 26

How are unilateral offers accepted?

Answer 26

When the other party does the ‘thing’ that is required
This is called performance

BUT there is no obligation on the party to do the particular thing required

Question 27

Carlill v Carbolic Smoke Ball Co (1893)

Answer 27

The manufactures of a ‘smoke ball’ published an advert during the influenza epidemic
Claimed that their product could cure all kinds of ailments
Stated: anyone who brought it, used it as directed and then caught influenza, would be paid £100 from the company
Also stated: ‘£1,000 is deposited with the Alliance Bank, showing our sincerity…’
Claimant caught the flu after using the ball as directed and claimed the sum of £100
Ds argued that the advertisement was a ‘mere puff’ + there was no offer made to anyone in particular
CA: was a unilateral offer to the world which was accepted by the claimant
Nature of the offer waived the need of acceptance to be communicated
Acceptance is undertaken by performance

Question 28

What are mere statements of price?
What are these regarded as in contract law?
What case illustrates this?

Answer 28

Where a party simply states the minimum price at which they would be willing to sell
This is an invitation to treat rather than an offer

Harvey v Facey (1983)

Question 29

Harvey v Facey (1983)

Answer 29

F was going to sell his store to another party
H telegraphed him: ‘will you sell us Bumper Hall Pen? Telegraph lowest cash price’
F answered: ‘Lowest price for Bumper Hall Pen £900’
H: ‘we agree to buy Bumper Hall Pen for the sum of £900 asked by you’
H claimed that he had accepted the offer + sued for specific performance
Held: there had been no offer
F’s statement was merely a statement of price, not an offer capable of acceptance

Question 30

Must an offer be communicated?

Answer 30

YES!
IOT be valid an offer must be communicated to the offer
Means that no party can be bound by an offer which they were unaware
True for bilateral + unilateral offers