offers Flashcards
offer defined
an expression of a willingness to be legally bound on a given set of terms, effective as soon as the person whom the offer is made accepts
how do courts decide if an offer has been made?
objective test
-> if a reasonable person believed the alleged words/conduct implied that they intended to be bound; then may because a sufficient offer [regardless of their state of mind]
invitation to treat
a preliminary statement expressing a willingness to receive offers
-> party is free to accept or reject
-> invitations to treat always lead to offers
how to distinguish between an offer + an ITT
depends on the intention of the party making the statement
-> certain situations in which the distinction can be made by applying the rules of law
advertisements
invitations to treat
partridge v crittenden [1968]
- advertised in magazine, 25s for various chicken types
-> prosecuted under protection of birds act 1954 for offering sale of wild birds
-> ad was ITT, willingness to receive offers as the starting point of negotiations
-> Lord Parker CJ: - business sense in constructing advertisements; unless coming from manufactures, as they are ITT and not offers for sale
in what circumstance may an advertisement be regarded as an offer?
if the advertisement involves a unilateral offer
unilateral offer
a unilateral offer is made when one party promises to pay the other a sum of money; if the other will do something without making any promise to that effect
unilateral contract
a contract by which only one party takes obligation
(a promise in return for an act)
- offeror is bound only if the specific act is performed [provided there is consideration and intention to create legal intentions]
bilateral contract
a contract in which each party takes obligation
- offer and acceptance are both promises
- both parties are immediately bound
unilateral offer explained
- if an advertisement indicates that they promise to pay something in return for a particular course of action, then advertiser is bound by that promise
“£100 will be paid to anyone who can find my dog” - unilateral
“I will give you £100 if you find my dog” - bilateral; if accepted would give rise to bilateral contract
[promise is the important factor, advertisement is irrelevant]
Carlill v Carbolic Smoke Ball Company Ltd (1893)
- medicine, 3x a day 2x weeks, if anyone contracted influenza, advertised they would give £100
- claimant caught flu, CSBC claimed mere puff, as no offer to specific person + can’t contract with whole world
-> CoA held unilateral offer with world at large, accepted by claimant; waived need for communication of acceptance prior to a claim being made on the basis of it [entitled to the 100] - established existence of unilateral offers
window displays
not an offer, invitation to treat
Pharmaceutical Society of GB v Boots Cash Chemsists Ltd [1953]
- counter to self service
- s18 pharmacy + poisons act 1933 claimed sale of drugs should not occur other than under supervision of a registered pharmacist
-> CoA considered if contract was formed when items taken off the shelf or when presented for payment, held when presented for payment; drugs on display merely an ITT
-> well-established case dealing with formation of contracts in all self-service shops
analysis; boots case
- means offer to purchase is made at cash desk by purchaser
- shop is then free to reject or accept
- shops are not compelled to sell goods at the price at which they are displayed; as purchaser is offering to buy item at stated price
- shopkeeper can reject the offer that is desired
Fisher v Bell
- display of knife in shop window
- Offensive Weapons Act 1959 prohibited the offering for sale of various offensive weapons
- shop keeper prosecuted under act but failed
- court held display of knife was ITT > offer
- therefore shopkeeper was not offering it for sale
auctions
- invitation to treat
- each bid represents an offer to buy the lot at the price offered; acceptance occurs at the fall of the auctioneers hammer
British Car Auctions v Wright 1972
- defendants prosecuted for offering an unroadworthy vehicle for sale
- prosecution failed ] as car had not been offered for sale, only had been an ITT [bid]
sales of goods act 1979 [s.57 (2)]
- ‘a sale of auction is complete when the auctioneer announces its completion by the fall of the hammer, or in other customary manner; until the announcement is made any bidder may retract his bid
where there is an auction sale ‘without reserve’
i.e no minimum price that must be reached before the offer is accepted
-> then this equates to an offer to sell the highest bidder, which is accepted by the submission of the highest bid
- first stated in obiter, by Harris v Nickerson
invitations to tender
- normally invitations to treat; therefore the person making the invitation to tender is not bound to accept any of the responses to the tender
- however if the person making the tender states that he will accept the highest offer to buy the goods or the lowest offer for the supply of goods; then the tender may be considered to be an offer or invitation to submit offers with the undertaking to accept the most favourable
statements of price
- where a party simply states the minimum price at which they would be willing to sell, ITT > offer
Harvey v Facey 1893
- Face going to sell store, Harvey telegraphed ‘will you sell us bumper hall eon, lowest cash price - answer paid’ -> responses ‘lowest price for bumper hall pen £900?’ -> “we agree tp buy bumper hall pen for the sum of 900 asked by you
-> Harvey claimed accepted offer and sued for specific performance of agreement, for an injunction to restraining Kingston from taking conveyance of the property
LP: no offer, F was statement of price and not an offer of acceptance
Analysis: case demonstrates that the application of the general principle that offers must be capable of immediate acceptance
communication of offers
- to be valid an offer must be communicated to the offeree, no party can be bound by an offer of which they were unaware; both of unilateral and bilateral
-> offeree must have clear knowledge of the existence of the offer for it to be valid
termination of offers: cease to exist
acceptance + express rejection:
- offer is accepted
- contract is formed provided that intention to create legal intentions and consideration are present
- offer may be refused or extinguished by a counter offer
4 ways offers can be terminated
- revocation
- lapse of time
- failure to comply with a condition precedent
- death of one of the parties
revocation
refers to the rescinding, annulling or withdrawal of an offer
-> an offer may be withdrawn at anytime prior to acceptance; the revocation must also be communicated to the offeree
Bryne v Van Tienhoven (1880)
- letters passed back and forth offering to sell tinplates;
1st: offered, 8th: changed mind, 11th: received, 15th: acceptance, 20th: received letter of oct 8th withdrawing
LP -> - offer of 1st had not been withdrawn at the time that it was accepted, and therefore contract was formed on acceptance on October 11th; despite the lack of agreement between the parties
-» it would be unfair for a party to back out of a contract if they had already sent a valid offer to the other party, not knowing of the intended revocation, had already accepted
revocation of offer must be communicated although:
- it does not always have to be communicated by the offeror themselves
-> revocation made by a third party is valid, provided that - the third party is a reliable source of infomation
- the third party is one on whom both parties can rely on
revocation of offer of unilateral offers
- as unilateral offer is a promise in return for an act, it may be accepted by anyone who performs the act stipulated in the offer
-> in order to revoke a unilateral offer, the offeror must take reasonable steps to notify the persons who may be likely to accept - if the offeree has started performance of the act specified in a unilateral offer then it may not be revoked, even if the act is complete
Errington v Errington & Woods (1952)
- father bought house using mortgage, son + DIL to live in
- promised to transfer legal title of property to them if they paid off all the payments
- couple made no promise in return
- father died after some repayments ; other family claimed possession of house; which failed
LP -> - contract was a unilateral contract as involved an act in return for a promise
- once performance commenced, promise could not be revoked
-> if couple continued to pay off, then fathers promise would transfer to the house -» still binding
-> would seem unfair to the party who was fulfilling the obligations under a unilateral contract to then be denied the benefit of that contract
lapse of time
- an offer may state that it is to terminate on a particular date or after a certain fixed period; after which it is no longer capable of acceptance
- where no particular date specified for the offer to terminate, then it will lapse after a reasonable time has passed
Ramsgate Victoria Hotel Co Ltd v Montefiore 1866
- claimant offered to buy shares in a hotel company in June, but company did not issue shares for sale until November
-> court held offer would lapse after a reasonable time, what is reasonable would depend on the offer and the subject matter of the contract
-> in cases where matter of contract would fluctuate rapidly or perishable; the offer would terminate after a short time
failure to comply with a condition precedent
- an offer may terminate if the parties to it had agreed to meet certain conditions and then failed to do so
Financings Ltd v Stimson 1962
- offer to sell a car on hire purchase was considered to be subject to the condition that it would remain in the same condition from the time of the offer to the time of acceptance
- when the car in question had been damages due to being stolen from showroom; contract concluded
death of the offeror
- the offerors personal representatives may still be bound by an acceptance, provided that
-> the contract does not involve the personal services of the deceased
-> the offeree is ignorant of the offerors death
death of the offeree
- where the offeree dies before acceptance, then the offer lapses and the offerees personal representatives will be unable to accept on behalf of the deceased
