Offer
Carlill v Carbolic
Smoke Ball Co [1893] 1 QB 256 Court of Appeal
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.
Harvey v Facey
[1893] AC 552 Privy Council
Harvey sent a
Telegram to Facey which stated: -
"Will you
sell us Bumper Hall Pen? Telegraph lowest cash price-answer paid;"
Facey replied
by telegram:-
"Lowest
price for Bumper Hall Pen £900."
Harvey then
replied:-
"We agree
to buy Bumper Hall Pen for the sum of nine hundred pounds asked by you. Please
send us your
title deed in order that we may get early possession."
Held:
The Privy
Council held that there was no contract concluded between the parties. Facey
had not directly answered the first question as to whether they would sell and
the lowest price stated was merely responding to a request for information not
an offer. There was thus no evidence of an intention that the telegram
sent by Facey was to be an offer.
Invitation to treat
Fisher v Bell [1961]
1 QB 394
The defendant had a flick knife displayed in his shop window
with a price tag on it. Statute made it a criminal offence to 'offer' such
flick knives for sale. His conviction was quashed as goods on display in shops
are not 'offers' in the technical sense but an invitation to treat. The court
applied the literal rule of statutory interpretation.
Partridge v
Crittenden (1968) 2 All ER 421
The defendant placed an advert in a classified section of a
magazine offering some bramble finches for sale. S.6 of the Protection of Birds
Act 1954 made it an offence to offer such birds for sale. He was charged and
convicted of the offence and appealed against his conviction.
Held:
The defendant's conviction was quashed. The advert was an
invitation to treat not an offer. The literal rule of statutory interpretation
was applied.
Carlill
v Carbolic Smoke Ball Co
[1893] 1 QB 256 Court of Appeal
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.
Spencer v Harding Law Rep. 5 C. P. 561
The defendants
advertised a sale by tender of the stock in trade belonging Eilbeck & co. The
advertisement specified where the goods could be viewed, the time of opening
for tenders and that the goods must be paid for in cash. No reserve was stated.
The claimant submitted the highest tender but the defendant refused to sell to
him.
Held:
Unless the
advertisement specifies that the highest tender would be accepted there was no
obligation to sell to the person submitting the highest tender. The advert
amounted to an invitation to treat, the tender was an offer, the defendant
could choose whether to accept the offer or not.
Heathcote Ball v Barry [2000] EWCA Civ
235
The claimant had
submitted the highest (and only) bids at an auction stated to be without
reserve. The items were two Alan Smart engine analysers which were worth
£14,000. The claimant had submitted bids of £200 each. The auctioneer refused
to sell them at that price. The claimant brought an action for breach of
contract claiming damages of £27,600.
Held:
The claimant was
entitled to damages. Where an auction takes place without reserve the
auctioneer makes a unilateral offer which is accepted by submitting the highest
bid. There was thus a binding contract and the claimant entitled to damages
covering the loss of bargain.
Termination of offers
Ramsgate Victoria Hotel v Montefoire
(1866) LR 1 Ex 109
The defendant
offered to purchase shares in the claimant company at a certain price. Six
months later the claimant accepted this offer by which time the value of the
shares had fallen. The defendant had not withdrawn the offer but refused to go
through with the sale. The claimant brought an action for specific performance
of the contract.
Held:
The offer was no
longer open as due to the nature of the subject matter of the contract the
offer lapsed after a reasonable period of time. Therefore there was no contract
and the claimant's action for specific performance was unsuccessful.
Dickinson
v Dodds (1876) 2
Ch D 463
The defendant
offered to sell his house to the claimant and promised to keep the offer open
until Friday. On the Thursday the defendant accepted an offer from a third
party to purchase the house. The defendant then asked a friend to tell the
claimant that the offer was withdrawn. On hearing the news, the claimant went
round to the claimant's house first thing Friday morning purporting to accept
the offer. He then brought an action seeking specific performance of the
contract.
Held:
The offer had
been effectively revoked. Therefore no contract existed between the parties.
There was no obligation to keep the offer open until Friday since the claimant
had provided no consideration in exchange for the promise.
The offeror is
free to withdraw the offer at any time before acceptance takes place unless a
deposit has been paid.
Errington
v Errington Woods [1952] 1 KB 290 Court of Appeal
A
father-in-law purchased a house for his son and daughter-in-law to live in. The
house was put in the father's name alone. He paid the deposit as a wedding gift
and promised the couple that if they paid the mortgage instalments, the father
would transfer the house to them. The father then became ill and died. The
mother inherited the house. After the father's death the son went to live with
his mother but the wife refused to live with the mother and continued to pay the
mortgage instalments. The mother brought an action to remove the wife from the
house.
Held:
The
wife was entitled to remain in the house. The father had made the couple a
unilateral offer. The wife was in course of performing the acceptance of the offer
by continuing to meet the mortgage payments. Under normal contract principles
an offer may be revoked at any time before acceptance takes place, however,
with unilateral contracts acceptance takes place only on full performance. Lord
Denning held that once performance had commenced the Mother was estopped from
revoking the offer since it would be unconscionable for her to do so.
Furthermore there was an intention to create legal relations despite it being a
family agreement.
Hyde v
Wrench (1840) 49 ER
132 Chancery Division (Decided by Lord Langdale MR)
The defendant
offered to sell a farm to the claimant for £1,000. The claimant in reply
offered £950 which the defendant refused. The claimant then sought to accept
the original offer of £1,000. The defendant refused to sell to the claimant and
the claimant brought an action for specific performance.
Held:
There was no
contract. Where a counter offer is made this destroys the original offer so
that it is no longer open to the offeree to accept.
