Offer and Acceptance Flashcards
Gibson v Manchester City Council
The council decided to offer council houses for sale to the current tenants. They sent Gibson a form on how to buy. C returned the form and the £3 fee and asked for the price. The council replied, “may be prepared to sell the house”, with an invitation “to make a formal application to buy” use the enclosed application form. Mr Gibson held this to be an offer. They then said ‘If you would like to make formal application…” thus this is not the letter of an offer. C returned the form leaving the price blank saying that there was a lot of work to be done on the house so the price should be lowered in which they replied that has already been taken into consideration of the house price given. Therefore the money price had taken the repairs into consideration so then he sent a letter formally accepting their apparent offer. He proceeded on the assumption that it was legally binding, so began work on his property. This should have been done by the Council but they told him that they had now removed C from the maintenance list and placed on list of owner occupied houses where responsibility for maintenance lay with owner and not the council. In 1971 political control of council changed as well as the change of policy on selling council houses. The D informed C that the sale would not be proceeded. C sued.
In the Court of Appeal, Lord Denning said that there is not always a need for an offer and acceptance. He thought you should look at the custom and conduct of the parties. Therefore, Gibson won in the Court of Appeals. HL said there was not an acceptance from the council.
However, D appealed to the HL, they disagreed with Denning and said there needs to be an offer and acceptance. (“may be prepared” is NOT an offer, by giving a price they were not offering, it was more an invitation to treat; therefore Cs application was an offer, which was never accepted).
Thornton v Shoe Lane Parking
The claimant was injured in a car park partly due to the defendant’s negligence. The claimant was given a ticket on entering the car park after putting money into a machine. The ticket stated the contract of parking was subject to terms and conditions which were displayed on the inside of the car park. One of the terms excluded liability for personal injuries arising through negligence.
Held: The machine itself constituted the offer. The acceptance was by putting the money into the machine. The ticket was dispensed after the acceptance took place and therefore the clause was not incorporated into the contract.
Smith v Hughes
Blackburn - ‘If whatever a man’s real intention may be, he so conducts himself that a reasonable man would believe [he is].. equally bound as if he had intended to agree to the other’s terms.’
Harvey v Facey
C telegraphed D, “will you sell us Bumper Hall pen? Telegraph the lowest cash price”. D replied, “lowest price is £900”. C then telegraphed his agreement to buy at that price. D did not respond. Held (PC) there was no contract. D was inviting to treat not an offer. C’s agreement to buy was therefore an offer which D had not accepted.
Steven v Bromley
Charterparty (i.e. a contract for the use of a ship) for the carriage of specified cargo. The Charterer then loaded a different cargo not the specified cargo. It was held that shipowners were entitled to damages as it was different cargo specified. The charterer by conduct by loading different goods had offered thereby a new contract. He didn’t say it but his conduct was interpreted that way.
Clifton v Palumbo
‘I am prepared to offer you … my … estate for £600,000’. Held: merely a preliminary statement as to price and not an offer).
The Leonidas D
Charterers gave notice of arbitration and two arbitrators appointed. The charterers then did and said nothing for five and a half years. Was there an implied offer to abandon the arbitration proceedings? CA: no. The inactivity and silence may have been because of incompetence or negligence on the part of the relevant people in the charterers’ organisation. Any assertion of an implied offer to drop the proceedings was, in the circumstances, pure speculation.
Goff LJ said that “silence will not normally amount to acceptance of an offer since acceptance cannot be inferred from silence alone ‘save in the most exceptional circumstances”
Sale of Goods Act 1979, s 57(2):
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 his bid.
Warlow v Harrison
The defendant Harrison put a horse for auction without a reserve price. Warlow then bid on the horse for a lot lower than Harrison was expecting. Harrison then bid on his own horse to try and increase the price. Warlow stopped bidding as he knew it was the horse owner. It was held that the property would be sold to the highest honest bidder, even if this means that it is sold at a lower price. Therefore Warlow won against the auctioneer.
Putting up for sale without reserve is both invitation to treat in respect of contract of sale and collateral offer to whoever proves to be the highest genuine bidder accepted by fact of making highest genuine bid.
Barry v Davies
The claimant sought damages from an auctioneer who had failed to accept his bid, and withdrawn the items from the sale. Held: In an auction without reserve the auctioneer was not entitled to withdraw an item on the basis that the highest or only bid was too low.
Harris v Nickerson
There was an advertisement in a newspaper that certain office furniture would be sold by auction at a specific place. C reads the advertisement and attends the auction, but it was withdrawn from the sale. C sued for wasted expenses. CA: no contract until a bid was accepted. The advertisement was a declaration of intent.
Fisher v Bell
There were flick knives on display. It is a criminal offense to offer to sale this knife. However, the court held that the display of the knife was an invitation to treat and not an offer.
Pharmaceutical society v Boots Cash Chemists
It is a criminal offense to sell certain drugs without the supervision of a pharmacist. The drug was displayed on the shelves. The customer then took the drug from the shelf and pays at the till where a qualified pharmacist is present. It was held that it is an invitation to treat when the drugs are on the shelves. Then the individual makes the offer at the till and the pharmacist can accept or not.
Partridge v Crittenden
It was a criminal offense to offer the sale of bramble finches. Crittenden then advertised the sale at a stated price. However, the court said that the advertisement was an offer to treat, not an offer so it is not wrong.
Grainger v Gough
A wine merchant put a list of wines in a catalogue, the customers responded by placing an order. It was held that this was an invitation to treat though as if it was a contract the merchant might not have all the available wine.
Chwee Kin Keong v Digiland Mall
The respondent, a company selling IT products, had established its own website to offer various products over the Internet. It also operated another website for a similar purpose. One of the products offered on both websites was a HP laser printer. The printer was a fixed price on both websites.
An error committed by an employee caused the price of the printer to be altered to a very low price on both websites.
The appellants came to know of the printer’s extraordinarily low price and placed orders through the Internet for a substantial number of printers.
The mistake was subsequently discovered and the respondent informed the appellants that it would not honour the orders placed for the printer. The appellants sued for breach of contract.
The Court held that the contract was void at common law, as the plaintiffs knew or ought to have known that the defendant was mistaken as to a fundamental term of the contract.
Carlill v Carbolic Smoke Ball Co
Carbolic smoke ball advertises a medicinal product to prevent influenza. Carlill read and purchases the medicine and used it three times a day. But she then suffered from Influenza. Carlill sued for breach of contract as Carbolic smoke ball were so sure that it worked that they offered £100 to show good faith. They even said that they set up a bank account and put the money aside. However, when Carlill got influenza they didn’t want to pay. They said they made an invitation to treat not an offer, but it was held that it was an offer.
One of five defences attempted by the company was that Mrs Carlill had not told them she was accepting their offer. This failed, as did all the other defences. Impliedly, the company had waived the communication requirement.
Lefkowitz v Great Minneapolis Surplus Stores
D places an advertisement in newspaper on: ‘Sat. 9 a.m. sharp; 3 Brand new fur coats, worth to $100, First come first served, $1 each’. On April 13, D places a similar advertisement in the same newspaper. Each relevant Saturday, C is the first person to respond to the advertisement at the store. D refuses to sell on each occasion. C sues D for breach of contract.
Spencer v Harding
The defendants advertised a sale by tender. The claimant submitted the highest tender but the defendant refused to sell to him. It was held that there was no obligation to sell to the person submitting the highest tender. The advert was an invitation to treat, the tender was an offer, the defendant could choose whether to accept the offer or not.
If the invitation to tender is coupled with a promise to accept the best financial terms, this is a unilateral offer. This unilateral offer is accepted by submitting the best bid, which is automatically accepted so it turns from a unilateral contract into a bilateral contract.
Harvela Investments Ltd v Royal Trust Company of Canada
A put shares of a company for sale. A invited offers by sealed tender before the deadline, A would accept the highest bidder. B offered a fixed amount whereas C offered an amount and said that they would pay $101,000 in excess of any other offer which may be recieved. A went with that offer. The HL that A’s invitation constituted as an offer to sell to the highest bidder. A’s invitation implicitly required the bids to be of a fixed figure, so C’s bid was the fixed figure not the one of £101,000 more. As C offered $101,000 more this is not a referential bid. Therefore, you have broken the rules and this does not generate a contract as it has to be an agreement which is clear.
Fixed bidding sale requires blind bid.From vendor’s perspective, auction runs risk of lack of competition to drive price up, while fixed bid sale compels bidders to declare their best offer.
Blackpool and Fylde Aero Club Ltd v Blackpool BC
The local authority sent seven parties an invitation to tender. D expressly said that they were not bound to accept any tender. C submitted tender in time but was overlooked by mistake by D. CA held that there was an obligation to consider all tenders submitted in time as there was a collateral contract that you would consider all tenders if made in time. However, it was impossible to award damaged as they had no obligation to accept it.
Bingham - “ if he submits a conforming tender before the deadline he is entitled…to be… considered in conjunction with all other conforming tenders”.
Difference between fixed and referential bidding
Fixed Bidding - This is where you have something to sell, you say everyone has one bid and they do not know what the others have bid. Therefore, everyone bids their highest amount. Fixed bidding requires blind bid.
Referential bid - is where a price is determined by reference to the price offered by another party in a bidding contest.
May and Butcher v The King
May & Butcher wanted to buy tentage from the Disposals Board. In June of 1921, the Board defined terms of agreement:
▪ the Board agrees to sell (and May & Butcher agree to purchase) all old tents ▪ the price and dates on which payment will be made shall be agreed on by the parties as the tents become available, upon time to time the price will be determined when the teenage becomes available. ▪ all disputes will be submitted to arbitration
May & Butcher made a deposit of £1,000 as security.
The control of the Disposals Board changed at this time and the Board refused to deliver specifications to May & Butcher or to allow them to inspect the goods. As May & Butcher insisted on this, the Board no longer considered itself bound by the contract and May & Butcher sued for breach.
Lord Buckmaster, for a unanimous court, held that no contract existed since part of contract was undetermined, specifically the price. An agreement to enter into an agreement is not a contract.
Section 8 of the Sale of Goods Act provides for a price to be fixed in the future, but section 9 holds that is the price cannot be fixed by a third party, no agreement is formed.
Sale of goods ‘at a price to be agreed between the parties’ void for uncertainty as a form of agreement to agree on a fundamental matter. Moreover, implication of reasonable price precluded because contract stipulated how price to be determined.
This should not be taken literally. The requirement is not that every matter should have been agreed, but rather that all essential matters have been agreed.
Lord Buckmaster”settles everything that is necessary to be settled and leaves nothing to be settled by agreement between the parties.”
Foley v CLASSIQUE COACHES
Foley owned a gas station. He sold a piece of land attached to Classique Coaches to use for their business on the condition that they purchase all of their gas from Foley for as long as he can supply it. There was no indication of price in the contract, however there was a clause stating that any arguments should be settled by arbitration.
Coaches claimed that because there was no stated price, the contract is not valid, at which point Classique Coaches began purchasing gas from other suppliers, and Foley sued for breach.
CA: petrol agreement binding. Given the long-term nature of the contract and the fact that petrol prices were bound to increase, it was not credible that the parties were unaware that a disagreement as to price could arise. Moreover, the parties clearly believed the agreement to be binding and had acted for three years on that basis. Therefore, a term was to be implied that in default of agreement a reasonable price was payable, determination of which would fall within the arbitration clause.
Hillas and Co v Arcos Ltd
Hillas & Company were merchants purchasing timber from Arcos. They reached an agreement to purchase timber, under the specific condition that they should also have the option of entering into a contract with Arcos to purchase 100,000 standards the following year with a 5% reduction on price. This was agreed but Arcos then refused to sell them the 100,000 standards the following year. The court held there was a contract
Scammell andNephew v Ouston
Order of a van, £100 part exchange, ‘on the understanding that the purchase price can be had on hire-purchase terms; It was held that ‘hire-purchase terms’ were too vague to be enforceable.
Courtney & Fairbairn v Tolaini Brothers
The plaintiffs are builders, the defendants are developers. The defendants got in touch with the plaintiffs to discuss construction. The plaintiff’s offered the defendants to help them attain financing for the project, in return for being contractors, with a promise to negotiate between them to come to agree on a price for construction.The plaintiffs sued on breach of contract when the defendants hired another contracting company. The court held that no contract as only an agreement to agree.
Courtney v Tolaini
An agreement to negotiate -“ is too uncertain to have any binding force”
Walford v Miles
(Agree to negotiate) Walford and Miles orally to deal with each other and to terminate any negotiations between them and any other competing buyer. The sellers later decided not to proceed with their negotiations with the buyers and went on to sell the company to another party. The buyers sued for breach of the oral agreement. HL: agreement unenforceable. A bare agreement to negotiate lacks the necessary certainty. The agreement had no fixed duration, therefore lock out agreement are workable but there has to be a fixed duration.
