offer v invitation to treat - formation

Question 1

define offer

Answer 1

an offer is a proposal showing a willingness to contract on firm and definitive terms, there must be a clear offer which can then be accepted by the recipient, legally binding

Question 2

define ‘invitation to treat’

Answer 2

an indication that one person is willing to negotiate a contract with another, but that they are not yet willing to make a legal offer, this is the beginning of negotiations and is not legally binding

Question 3

Gibson v Manchester City council (1979)

Answer 3

Gibson (C) applied for details and D’s treasurer replied stating that D ‘may be prepared to sell’ at a certain price and on certain mortgage terms, but stated that C still had to ‘make formal application to buy’
Was there a binding contract?
HoL found no clear indication in the letter that it intended to make a binding promise and it was no more than an invitation to treat as the form had never been accepted.

Legal principle: defined the difference in wording between an offer and invitation to treat

Question 4

Storer v Manchester City council (1974)

Answer 4

The tenant Storer received communication from the council which stated ‘if you will sign the agreement a d return it to me, I will send you the agreement signed on behalf of the council in exchange

this was held as the words of the communication were deemed to fulfil the formalities required to constitute a valid offer, which created a binding agreement

legal principle: define difference in wording between an offer and invitation to treat

Question 5

advertisement- overview and key case

Answer 5

classed as an invitation to treat with the exception of unilateral contracts as seen in Partridge v Crittenden

Question 6

Partridge v Crittenden (1968)

Answer 6

The D was charged with the offence of offering a live wild bird (against another law) Crittenden had placed an advertisement stating ‘Bramblefinch cocks, 25s each)
Held: he was found not guilty of offering these wild birds because the advertisement was an invitation to treat and not an offer, the person responding would be the offerer

Legal principle: advertisements are an invitation to treat

Question 7

goods in a shop window- overview and key case

Answer 7

they are an invitation to treat, key case: fisher v bell

Question 8

Fisher v Bell (1961)

Answer 8

A flick- knife was displayed with a price in a shop window, to offer this would be an offence against the Offensive Weapons Act 1961,

Held: the shop keeper was not guilty as it was only an invitation to treat

Legal principle: goods in a shop window are an invitation to treat

Question 9

Pharmaceutical Society of Great Britain v Boots cash chemists (1953)

Answer 9

Boots introduced the then new self service system into their shops whereby customers would pick up goods from the shelf put them in their basket and then take them to the cash till to pay. The Pharmaceutical Society of Great Britain brought an action to determine the legality of the system with regard to the sale of pharmaceutical products which were required by law to be sold in the presence of a pharmacist. The court thus needed to determine where the contract came into existence.

Held:

Goods on the shelf constitute an invitation to treat not an offer. A customer takes the goods to the till and makes an offer to purchase. The shop assistant then chooses whether to accept the offer. The contract is therefore concluded at the till in the presence of a pharmacist.

Legal principle: items on display are an invitation to treat

Question 10

Lots at an auction- overview and key case

Answer 10

the bidder is the one to make an offer and the auctioneer accepts or declines the offer by banging the hammer so an auction is an invitation to treat,

Key case: British Car Auctions v Wright

Question 11

British Car Auctions v Wright

Answer 11

The auctioneers were prosecuted for offering to sell an unfit vehicle at an auction. However the prosecution failed because there was no offer, only an invitation to treat

key principle: an auction is only an invitation to treat

Question 12

Request for information- overview and key case

Answer 12

this is not an offer

key case: Harvey v Facey

Question 13

Harvey v Facey (1893)

Answer 13

Harvey wanted to buy Faceys farm and sent a message of ‘Will you sell me the farm? State lowest price’

Facey replied: ‘Lowest price acceptable £900’

Harvey tried to buy the farm for £900 but could not as the reply was merely a reply to the request for information, not an offer

legal principle: a request for information is not an offer

Question 14

exception to the rule- advertisements

Answer 14

Carlill v Carbolic Smoke ball set that unilateral contracts in advertisements will be seen as offers whereas bilateral contracts are an invitation to treat

Question 15

define unilateral contracts

Answer 15

an agreement to pay in exchange for performance, if the potential performer chooses to act, there is no obligation to perform the act
- acceptance is fulfillment of the task
- aren’t mandatory
- don’t require formal acceptance

Question 16

define bilateral contracts

Answer 16

the requires both the offeror and offeree to do something, both parties have obligations,

Question 17

Carlill v Carbolic Smoke ball Co. (1893)

Answer 17

A Newspaper advert placed by the defendant stated:-

£100 reward will be paid by the Carbolic Smoke Ball Company to any person who contracts the influenza after having used the ball three times daily for two weeks according to the printed directions supplied with each ball…

£1000 is deposited with the Alliance Bank, shewing our sincerity in the matter.”

Mrs Carlill purchased some smoke balls and used them according to the directions and caught flu. She sought to claim the stated £100 reward.

The defendant raised the following arguments to demonstrate the advertisement was a mere invitation to treat rather than an offer:

1. The advert was a sales puff and lacked intent to be an offer.
2. It is not possible to make an offer to the world.
3. There was no notification of acceptance.
4. The wording was too vague to constitute an offer since there was no stated time limit as to catching the flu.
5. There was no consideration provided since the ‘offer’ did not specify that the user of the balls must have purchased them.

Held:

The Court of Appeal held that Mrs Carlill was entitled to the reward as the advert constituted an offer of a unilateral contract which she had accepted by performing the conditions stated in the offer. The court rejected all the arguments put forward by the defendants for the following reasons:

1. The statement referring to the deposit of £1,000 demonstrated intent and therefore it was not a mere sales puff.
2. It is quite possible to make an offer to the world.
3. In unilateral contracts there is no requirement that the offeree communicates an intention to accept, since acceptance is through full performance.
4. Whilst there may be some ambiguity in the wording this was capable of being resolved by applying a reasonable time limit or confining it to only those who caught flu whilst still using the balls.
5. The defendants would have value in people using the balls even if they had not been purchased by them directly.

Question 18

Thornton v Shoe lane parking

Answer 18

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.