Introduction

• necessary to distinguish between an offer and an invitation to treat
• invitation to treat is a preliminary statement, merely supply of information and often inducing negotiation
• no commitment to sell or offer which could be accepted

Distinction between offer and invitation to treat

• the distinction has been discussed in a number of cases

  Harvey v Facey [1893] AC 552

  Facts:

  • dispute over the sale of a property (in Jamaica) and an alleged agreement made via telegram correspondence
  • Plaintiff (P): Will you sell us Bumper Hall Pen? Telegraph lowest cash price
  • Defendant (D): Lowest price for Bumper Hall Pen £900
  • P: We agree to buy Bumper Hall Pen for the sum of nine hundred pounds asked by you

  Issue:

  • whether there had been an offer and acceptance of that offer

  Held:

  • Privy Council decided in the initial exchange of telgrams: P was asking questions about the property and clearly not making an offer and D was simply answering second part of P's question
  • D discussed but did not commit, so D's first telegram invitation to treat not an offer
  • P's last telegram is first unequivocal statement but D has not made an offer P can accept
  • P has now made an offer, which D has chosen not to accept
  • case criticised as some argue D implied a promise to sell for £900
  • today contracts for sale of land must be written and signed by both parties (Law of Property (Miscellaneous Provisions) Act 1989 s2(1))

  Gibson v Manchester City Council [1979] 1 WLR 294

  Facts:

  • P was a council tenant and recived a letter from D inviting an application to buy the council house
  • D's letter stated: .. The Corporation may be prepared to sell the house to you at the purchase price of £2,725... If you would like to make formal application to buy your Council house, please complete the enclosed application form...
  • P completed the application
  • D was a newly elected council and refused to accept P's application
  • P sued for breach of contract

  Issue:

  • did D make an offer or invitation to treat?

  Held:

  • held that D's letter was not a contractual offer, which P could accept
  • formal application by P was an offer, that D did not accept
  • Lord Diplock: The words 'may be prepared to sell' are fatal... [D's letter is] setting out the financial terms on which it may be the council will be prepared to consider a sale and purchase in due course...

  Storer v Manchester City Council [1974] 3 All ER 824

  Facts:

  • earlier case also involving a council tenant's right to buy his property
  • D sent P a document titled Agreement for Sale and a letter which stated: If you will sign the Agreement and return it, I will send you the Agreement signed on behalf of the council in exchange
  • P signed and returned the Agreement for Sale
  • Labour party took control of the council and did not return a signed copy, refusing to sell the property
  • P sued for breach of contract

  Issue:

  • was there an agreement?

  Held:

  • there was a binding obligation on D to sell
  • Lord Denning: In contracts you do not look into the actual intent in a man's mind. You look to what he said and did. A contract is formed when there is, to all outward appearances, contract. A man cannot get out of a contract by saying 'I did not intend to contract' if by his words he has done so...
  • objectively, to a reaosnable man D's letter appeared to commit to selling the property if P returned the documents

Shops

• whether items on display in a shop constitute an offer or an invitation to treat
• timing of the acceptance is a central factor
• a contract is concluded and becomes binding on the parties once the offeree accepts the offer (in full and to all the terms)
• after a customer selects a product from the shelf he can change his mind until he takes the item to a checkout
• at this point the customer is making an offer to pay for the goods and the store accepts when payment is taken

  Pharmaceutical Society of Great Britain v Boots Cash Chemists [1953] 1 QB 401

  Facts:

  • regulations required a registered pharmacist to supervise sale of certain drugs
  • customers select items from shelves and take to specific pay point to purchase
  • D had suitably qualified persons at the pay point in stores

  Issue:

  • when was the contract of sale was concluded?

  Held:

  • contract not concluded until the sale at pay point, D not committing an offence
• self-service in a shop is classified as an invitation to treat

  Fisher v Bell [1967] 1 QB 394

  Facts:

  • a criminal case involving the sale of restricted weapons
  • D had a knife displayed in his shop window with a sale price
  • sale of that type of flick knife was prohibited under Restriction of Offensive Weapons Act 1959

  Issue:

  • was the display an offer for sale?

  Held:

  • that the knife in the window was an invitation to treat
  • D was acquitted

Advertisements

• general rule is that advertisements are invitations to treat not offers

  Partridge v Crittenden [1968] 2 All ER 421

  Facts:

  • D placed dvertisement in periodical, Classified Advertisements section: Bramblefinch cocks, Bramblefinch hens 25s each

  Issue:

  • was D offering for sale a wild bird contrary to the Protection of Birds Act 1954?

  Held:

  • advertisement was invitation to treat not an offer
  • D acquitted
• it is reasoned that if an advertisement was considered an offer then anyone responding and asking for the items would be accepting
• this would mean the seller would be bound and could cause difficulties
• cases are determined on the objective intention behind the advertisement
• courts will consider whether: the wording is sufficiently clear to be an offer, the advertiser intended to be bound and there are issues of limited supply

Rewards

For information

• advertisements of rewards for information have generally been treated as offers not invitations to treat

  Williams v Carwardine [1833] EWHC KB J44

  Facts:

  • D advertised: .. whosoever would give such information as might lead to a discovery of the murder of the said Walter Carwardine, should, on conviction, receive a reward of £20...
  • P gave information but was refused the reward

  Issue:

  • was D obliged to pay the reward advertised?

  Held:

  • the advertisement was sufficiently precise, with no negotiation required so constituted an offer
  • supply of information was an acceptance and the money should be paid

For consumers

• rewards advertised to encourage consumers can also be offers

  Lefkowitz v Great Minneapolis Surplus Stores (1957)

  Facts:

  • American case which is not binding on English courts
  • D placed the following advertisement in a newspaper: Saturday 9 A.M. Sharp 3 Brand New Fur Coats Worth to $100.00. First Come First Served $1 Each
  • P was the first person to come into the store but D refused to sell to him

  Issue:

  • was D's advertisement an offer?

  Held:

  • the wording was sufficiently precise and there would be no issues of limited supply, as only three coats were advertised as available
  • advertisement was found to be an offer and P had accepted it by being the first person to come into the store, as specified

  Carlill v Carbolic Smoke Ball Co. [1893] 1 QB 256

  Facts:

  • D's advertisement 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, showing our sincerity in the matter...
  • P's claim was refused and D argued that the advertisement: was mere puff, had not been addressed to specific persons and that the P had not communicated notice of her acceptance

  Issue:

  • was D's advertisement an offer?

  Held:

  • advertisement was not mere puff as D had explicitly stated money had been set aside to make such payments
  • a reasonable person reading the advertisement would take it to be a serious offer which amounted to a binding obligation
  • although an offer must usually be addressed to specific person or class of persons, the advertisement was being made to anyone who met the criteria set out and this was sufficient
  • the wording of the advertisement meant P did not have to communicate acceptance, as clearly D did not expect every customer to contact them on purchasing the item, rather only those who used the product as directed and then caught influenza
  • case established that advertisements can constitute an offer to the public at large and can be worded to waive the need to communicate acceptance prior to a claim
• rewards are unilateral contracts where the promisor is bound to perform his promise if the other party performs the required act
• in contrast to a bilateral contract where one party offers a promise in return for the promise of the other