Offers

Formation of a contract requires:

1. Offer

2. Acceptance

3. Intention to create Legal Relations

4. Consideration

Invitation to Treat (ITT)

Definition (AO1)

An ITT is an expression by words or conduct of willingness to negotiate

(Must distinguish from an offer in an exam Q!!!)

Invitation to Treat (ITT)

Examples

1. Display of goods in shop window

2. Display of goods on self-service display

3. Advertisements

4. Auctions

5. A Request for information / further inquiry

Invitation to Treat (ITT) - Display of goods in shop window

Case

(Fisher v Bell)

D had a flick knife displayed in shop window with price tag. Charged with ‘offering’ flick knives for sale. The court held that displaying the knife constituted an invitation to treat, not an offer.

Invitation to Treat (ITT) - Display of goods on self-service display

Case

(Pharmaceutical Society of GB v Boots)

The case involved Boots' self-service pharmacy where goods were displayed on shelves. The court ruled that the display constituted an invitation to treat, and a sale contract was formed when the customer presented goods at the checkout.

Invitation to Treat (ITT) - Advertisements

Case

(Partridge v Crittenden)

-D advertised birds in a classified section of a magazine. Protection of birds act made it an offence to ‘offer’ birds for sale. Conviction quashed as ad was ITT. This was too prevent the Offeror being bound to agreements when they were out of stock.

Invitation to Treat (ITT) - Auctions

Case

(British Car Auctions v Wright) - With reserve

Auctioneer charged with offering to sell unroadworthy car. Q was if bidding was ‘offering’ to sell. Final acceptance occurred when hammer fell.

(Barry v Davies) - Without reserve

Invitation to Treat (ITT) - A Request for information / a further enquiry

Case

(Harvey v Facey)

C asked for lowest price and D replied. C accepted that price but courts said that it was not an offer but just a reply to the request for info.

Offers

Definition (AO1)

An offer is an ‘expression’ by the offeror:

• by words or conduct

• of willingness to be bound by the terms of the offer

• as soon as the offer is accepted by the offeree

  (Must not include words of uncertainty i.e if or might)

Offers

Case

(Biggs v Boyd Gibbins)

• The defendant had made an offer to sell a property and later attempted to withdraw it, but the court held that an acceptance had already occurred when the plaintiff acted on the offer.

‘Mirror Image’ Rule

Definition (AO1)

If an offer is exactly matched by the acceptance, there is an agreement.

What amounts to an offer?

1. A Bilateral Offer

2. A Unilateral offer

3. A statement of price where an offer is also intended

How can an offer be made?

1. Oral

2. Written

3. Conduct

As long as there is objective evidence of intention to offer

Bilateral Offer

Definition (AO1)

An offer that is made to a specific party.

Unilateral Offer

Definition (AO1)

• A party will enter a contract with whoever carries out that specified conduct.

• The offer is made from ‘one to the world’

• ‘Often’ associated with rewards (lost cat etc) but don’t have to be

• Often referred to as ‘if’ offers “if you do this, I will enter a contract with you”

• Cannot be accepted by saying yes, only by some form of conduct.

Unilateral Offer

Case

(Carlill v Carbolic Smoke Ball Co)

In this landmark case, the court established that a unilateral offer is binding when the offeree performs the required action, demonstrating acceptance, as was seen when Mrs. Carlill used the smoke ball as instructed and became entitled to the reward.

A statement of price where an offer is also intended

Definition (AO1)

A simple statement of price is not binding, but if other factors indicate an offer is included in the statement then it will be binding.

A statement of price where an offer is also intended

Case

(Biggs v Boyd Gibbins)

Selling a house

Auction advertised as ‘with reserve’ when bidding starts

Definition (AO1)

A reserve price is a minimum price acceptable to the seller, no contract is formed unless the bidders reach this reserve price

Auction advertised as ‘without reserve’ when bidding starts

Definition (AO1)

‘Without reserve’ goods will become property of the highest bidder, once bidding opens

Auction advertised as ‘without reserve’ when bidding starts

Case

(Barry v Heathcote Ball & Co)

Rules - Termination of Offers (3 ways)

Definition (AO1)

An offer can be terminated - therefore not capable of being accepted:

1. By revocation by the offeror

2. By rejection / Counter off by the offeree

3. By lapse of time

4. Death

Termination of Offers - Revocation by the offeror

Principle (AO1)

Offeror can revoke the offer:

• At any time prior to acceptance

• Including within the specified time for acceptance

• Provided revocation is communicated to the offeree

  (Communication of revocation need not be by offeror)

Termination of Offers - Revocation by the offeror

Cases

(Routledge v Grant) - Within specified time for acceptance

(Byrne v Tienhoven) - After Acceptance

(Dickinson v Dodds) - Offeree heard of revocation from third party

Termination of Offers - Revocation of a Unilateral Offer

Principle (AO1)

A unilateral offer can be revoked any time before offeree starts to perform terms of the offer.

Exception - The offeror is not bound by the offer until offeree’s performance is complete

Consider:

• Method / notice of revoking a unilateral offer

• By same / similar method as offer originally made.

  (Shuey v US)

Termination of Offers - Revocation of a Unilateral Offer

Case

(Daulia v Four Millbank Nominees)

The offeror is entitled to require full performance of the condition he has imposed, but that he has an implied obligation not to do anything to prevent the condition being satisfied

Termination of Offers - Rejection / counter offer by offeree

Principle (AO1)

A rejection of offer or counter offer by the Offeree ‘kills’ the original offer.

Distinguish between:

• Rejection

• Counter Offer

• Mere request for info (Stevenson v McClean)

Termination of Offers - Rejection / counter offer by offeree

Case

(Hyde v Wrench) - Counter Offer

Termination of Offers - Lapse of Time

Definition (AO1)

An offer will be terminated by:

• Expiry of specified period for acceptance

  Or

• Expiry of reasonable time

What is reasonable time?

Look at subject matter of offer i.e Perishable items will lapse over a short time

Termination of Offers - Lapse of Time

Case

(Ramsgate Victoria Hotel v Montefiore)

• Lapse of time occurred after the expiration of the reasonable period for acceptance. Offered to buy shares

Termination of Offers - Death

Definition (AO1)

-Death may end an offer if the offeree is aware that the offeror has died and the contract is one that requires personal performance

-However if the contract can be performed by another person (someone from the deceased’s company) and the oferee was unaware of the offeror’s death, then it may be decided that the offer has not ended.

Termination of Offers - Death

Case

(Bradbury v Morgan)