OFFER
•Law of Contract
•The Agreement - Offer and Acceptance
•Offer
•Offer – a definite proposal or final statement by one party of the terms in which s/he will enter into a contract
•Can be made in writing, orally or by conduct
•Can be made to a specific person(s) or to the whole world
•Leads to a contract if matched by ‘acceptance’ by the other party
•Offer
•Generally, courts require to identify an offer matched by acceptance for there to be a contract
•Gibson v Manchester CC [1979] 1 WLR 294
–MCC wrote to G explaining that they may be prepared to sell the property he occupied to him for £2180
–G completed and returned the relevant form, but left the space for the price blank – asking for possibility of a price reduction
–MCC replied that the price could not be changed
–G asked them to ‘carry on with the purchase as per my application’
–MCC later refused to sell the house to G
–Held: there was no contract as MCC’s letter was not an offer and thus not capable of acceptance
•Compare Storer v Manchester CC [1974] 1 WLR 1403 (CA)
•Offer
•Distinguished from ‘invitation to treat’ or preliminary negotiations/enquiries
•‘Invitation to treat’ = general expression of willingness to enter into a contract i.e. not definitive
•Generally, advertisements are ‘invitations to treat’
•Partridge v Crittenden [1968] 1 WLR1204
–Applt placed ff advert in a periodical
–“Bramblefinch cocks, Bramblefinch hens 25s each”
–Charged with unlawfully offering for sale wild live birds
–Held (QB): the advert was only an invitation to treat; it was not an offer for sale; thus, applt could not be guilty of the offence
•Offer
•Distinguished from ‘invitation to treat’
•Adverts are generally invitations to treat and not offers
•Fisher v Bell [1961] 1 QB 394
–Shopkeeper displayed a flick-knife in shop window with tag: “Ejector knife – 4s”
–Charged with offence of “offering” a knife for sale under Restriction of Offensive Weapons Act 1959
–Held (QB): no offence had been committed; a mere display of goods in a shop window with a price tag is not an offer for sale but an invitation to treat
•See also: Pharmaceutical Soc. Of GB v Boots etc [1953] 1 QB 401
•Offer
•Offer and Auction Sales
•Adverts that auction will be held are only invitations to treat
•Harris v Nickerson [1873] LR 8 QB 286
–Auctioneer advertised auction to be held at Bury St. Edmunds including some office furniture
–Clmt travelled up from London
–The office furniture were withdrawn from the sale
–Clmt sued for loss of time and for expenses
–Held (QB): clmt had no right of action; the advert was an invitation to treat and not a promise that all the items would be put up for sale
•Offer
•Offer and Auction Sales
•At ‘ordinary’ auction, auctioneer’s request for bids is also an invitation to treat
–Each bid is an offer
–“A sale by auction is complete when the auctioneer announces its completion by the fall of the hammer, or in other customary manner; and until the announcement is made any bidder may retract his bid.” S. 57(2) Sale of Goods Act 1979
•See also Payne v Cave (1789) 3 Durn & E 148
•Offer
•Offer and Auction Sales
•In an auction ‘without reserve’, again the contract of sale is only concluded on the fall of the hammer
•However, there is a collateral contract between the auctioneer and the highest bidder that the item would be sold to the highest bidder
•The advert of the auction of an item ‘without reserve’ amounts to an offer by the auctioneer to sell to the highest bidder
•The offer is accepted by the person making the highest bid
•Offer
•Offer and Auction Sales
•Auction ‘without reserve’ creates collateral contract
•Barry v Davies (t/a Heathcote Ball & Co) [2000] 1 WLR 1962
–Auction of two engine analysers stated to be without reserve
–Clmt made the only bid
–Auctioneer withdrew the items because he thought the bid was too low
–Clmt sued for breach of contract
–Held (CA): the auctioneer was liable in breach
–at an auction without reserve, there is a collateral contract between the auctioneer and the highest bidder to sell to the highest bidder
–that collateral contract is distinct from the actual sale – which would only be concluded on the fall of the hammer.
•Offer
•Offers and Tenders
•An invitation to submit tenders is not an offer; only an invitation to negotiate
•Normally, each tender submitted is an offer open to acceptance
•Spencer v Harding (1870) LR 5 CP 561
–Deft published a circular “to offer … for sale by tender” the stock in trade of a business
–Held: this did not amount to a contractual offer to sell to the highest bidder but an attempt to ascertain whether an offer can be obtained.
•Offer
•Offers and Tenders
•An invitation to tender may amount to an offer in exceptional circumstances
•Harvela Investments Ltd v Royal Trust Co of Canada [1986] AC 207
–Defts telexed two parties inviting them to submit tenders to buy shares
–They also said that they (defts) bound themselves to accept the highest offer
–Held (HL): that the defts’ telex amounted to a unilateral offer – a contractual offer to sell to the highest bidder
•Offer
•Offers and Tenders
•An invitation to tender may also itself be, exceptionally, regarded as an offer
•Albeit, not an offer to accept any particular tender, but an offer to consider all tenders submitted correctly
•Blackpool & Fylde Aero Club Ltd v Blackpool Borough Council [1990] 1 WLR 1195
•Offer
•Invitation to Tender, exceptionally, as an offer
•Blackpool & Fylde Aero Club Ltd v Blackpool Borough Council [1990] 1 WLR 1195
–Deft council invited tenders to operate pleasure flights from the local airport
–Tenders were to be submitted by a deadline
–Clmt’s bid was submitted by deadline but deft mistakenly thought it had arrived late and refused to consider it
–Clmt sued for breach of contract
–Held (CA): deft was liable to clmt in breach;
–although deft was not obliged to accept any of the tenders, the terms of the invitation to tender amounted to an offer to at least consider any properly submitted tender
–That offer was accepted by any person who correctly submitted a tender --- thereby creating a unilateral contract.
•Offer
•Termination of the Offer
•An offer may be terminated in 5 principal ways
–Withdrawal
–Rejection
–Lapse of Time
–Upon Occurrence of a Specific Event
–Death of the Offeror
•Offer
•Termination by Withdrawal
•Generally, an offer may be withdrawn at any time before acceptance
•Notice of withdrawal must actually reach the offeree though it may be communicated by a third party
•Dickinson v Dodds (1876) 2 Ch D 463
•Offer
•Termination by Withdrawal
•Dickinson v Dodds (1876) 2 Ch D 463
–On Wed, deft offered to sell his house to clmt and promised to leave the offer ‘over’ till 9AM on Friday
–Clmt learned (from a third party) on Thursday that deft was planning to sell the house to someone else
–Clmt left a formal acceptance for the deft same day but the deft did not see it
–At 7AM on Friday Clmt handed an ‘acceptance’ to the deft but the house had been sold by then
–Held: there was no contract as the offer had been withdrawn
–that there is neither principle nor authority for saying that there must be an express and actual withdrawal of the offer
–that the clmt knew, through a third party, that the deft was no longer minded to sell the house to him and this was as plain and clear as if the deft had expressly said he withdrew the offer
–that the deft would not have been able to withdraw the offer only if both parties agreed that it was a continuing offer until acceptance
•Offer
•Termination by Withdrawal
•Note in relation to leaving the offer ‘over’
–Such a promise will only be binding if supported by consideration; sometimes called ‘buying the option’;
–See Routledge v Grant 130 ER 920
•Note also that the ‘postal rule’ does not apply in relation to withdrawal/revocation of an offer
•Byrne v Van Tienhoven (1880) CPD 344
–Defts posted letter of offer (from Cardiff to NY) on 1 October
–Clmt received the letter on 11 October and immediately accepted by telegram
–Meanwhile, defts had posted a withdrawal on 8 October which did not reach clmt until 20 October
–Held: binding contract was made on 11 October; revocation is not effective until it is communicated --- in this case on 20 October.
•offer
•Termination by Rejection
•Rejection may be express or by a counter-offer; a counter-offer kills off the last offer
•Hyde v Wrench (1840) 3 Beav 334
–Deft offered to sell his farm to clmt for £1000
–Clmt replied offering to buy it for £950
–Deft refused
–Later, clmt sent letter of “acceptance” to buy it for the original £1000; the deft refused to sell
–Held: no contract; the initial response which was a counter-offer had put an end to the offer
•Offer
•Other ways of termination
–Lapse of time
–Upon occurrence of stated specific event
–Death of the offeror.
•The Agreement - Offer and Acceptance
•Offer
•Offer – a definite proposal or final statement by one party of the terms in which s/he will enter into a contract
•Can be made in writing, orally or by conduct
•Can be made to a specific person(s) or to the whole world
•Leads to a contract if matched by ‘acceptance’ by the other party
•Offer
•Generally, courts require to identify an offer matched by acceptance for there to be a contract
•Gibson v Manchester CC [1979] 1 WLR 294
–MCC wrote to G explaining that they may be prepared to sell the property he occupied to him for £2180
–G completed and returned the relevant form, but left the space for the price blank – asking for possibility of a price reduction
–MCC replied that the price could not be changed
–G asked them to ‘carry on with the purchase as per my application’
–MCC later refused to sell the house to G
–Held: there was no contract as MCC’s letter was not an offer and thus not capable of acceptance
•Compare Storer v Manchester CC [1974] 1 WLR 1403 (CA)
•Offer
•Distinguished from ‘invitation to treat’ or preliminary negotiations/enquiries
•‘Invitation to treat’ = general expression of willingness to enter into a contract i.e. not definitive
•Generally, advertisements are ‘invitations to treat’
•Partridge v Crittenden [1968] 1 WLR1204
–Applt placed ff advert in a periodical
–“Bramblefinch cocks, Bramblefinch hens 25s each”
–Charged with unlawfully offering for sale wild live birds
–Held (QB): the advert was only an invitation to treat; it was not an offer for sale; thus, applt could not be guilty of the offence
•Offer
•Distinguished from ‘invitation to treat’
•Adverts are generally invitations to treat and not offers
•Fisher v Bell [1961] 1 QB 394
–Shopkeeper displayed a flick-knife in shop window with tag: “Ejector knife – 4s”
–Charged with offence of “offering” a knife for sale under Restriction of Offensive Weapons Act 1959
–Held (QB): no offence had been committed; a mere display of goods in a shop window with a price tag is not an offer for sale but an invitation to treat
•See also: Pharmaceutical Soc. Of GB v Boots etc [1953] 1 QB 401
•Offer
•Offer and Auction Sales
•Adverts that auction will be held are only invitations to treat
•Harris v Nickerson [1873] LR 8 QB 286
–Auctioneer advertised auction to be held at Bury St. Edmunds including some office furniture
–Clmt travelled up from London
–The office furniture were withdrawn from the sale
–Clmt sued for loss of time and for expenses
–Held (QB): clmt had no right of action; the advert was an invitation to treat and not a promise that all the items would be put up for sale
•Offer
•Offer and Auction Sales
•At ‘ordinary’ auction, auctioneer’s request for bids is also an invitation to treat
–Each bid is an offer
–“A sale by auction is complete when the auctioneer announces its completion by the fall of the hammer, or in other customary manner; and until the announcement is made any bidder may retract his bid.” S. 57(2) Sale of Goods Act 1979
•See also Payne v Cave (1789) 3 Durn & E 148
•Offer
•Offer and Auction Sales
•In an auction ‘without reserve’, again the contract of sale is only concluded on the fall of the hammer
•However, there is a collateral contract between the auctioneer and the highest bidder that the item would be sold to the highest bidder
•The advert of the auction of an item ‘without reserve’ amounts to an offer by the auctioneer to sell to the highest bidder
•The offer is accepted by the person making the highest bid
•Offer
•Offer and Auction Sales
•Auction ‘without reserve’ creates collateral contract
•Barry v Davies (t/a Heathcote Ball & Co) [2000] 1 WLR 1962
–Auction of two engine analysers stated to be without reserve
–Clmt made the only bid
–Auctioneer withdrew the items because he thought the bid was too low
–Clmt sued for breach of contract
–Held (CA): the auctioneer was liable in breach
–at an auction without reserve, there is a collateral contract between the auctioneer and the highest bidder to sell to the highest bidder
–that collateral contract is distinct from the actual sale – which would only be concluded on the fall of the hammer.
•Offer
•Offers and Tenders
•An invitation to submit tenders is not an offer; only an invitation to negotiate
•Normally, each tender submitted is an offer open to acceptance
•Spencer v Harding (1870) LR 5 CP 561
–Deft published a circular “to offer … for sale by tender” the stock in trade of a business
–Held: this did not amount to a contractual offer to sell to the highest bidder but an attempt to ascertain whether an offer can be obtained.
•Offer
•Offers and Tenders
•An invitation to tender may amount to an offer in exceptional circumstances
•Harvela Investments Ltd v Royal Trust Co of Canada [1986] AC 207
–Defts telexed two parties inviting them to submit tenders to buy shares
–They also said that they (defts) bound themselves to accept the highest offer
–Held (HL): that the defts’ telex amounted to a unilateral offer – a contractual offer to sell to the highest bidder
•Offer
•Offers and Tenders
•An invitation to tender may also itself be, exceptionally, regarded as an offer
•Albeit, not an offer to accept any particular tender, but an offer to consider all tenders submitted correctly
•Blackpool & Fylde Aero Club Ltd v Blackpool Borough Council [1990] 1 WLR 1195
•Offer
•Invitation to Tender, exceptionally, as an offer
•Blackpool & Fylde Aero Club Ltd v Blackpool Borough Council [1990] 1 WLR 1195
–Deft council invited tenders to operate pleasure flights from the local airport
–Tenders were to be submitted by a deadline
–Clmt’s bid was submitted by deadline but deft mistakenly thought it had arrived late and refused to consider it
–Clmt sued for breach of contract
–Held (CA): deft was liable to clmt in breach;
–although deft was not obliged to accept any of the tenders, the terms of the invitation to tender amounted to an offer to at least consider any properly submitted tender
–That offer was accepted by any person who correctly submitted a tender --- thereby creating a unilateral contract.
•Offer
•Termination of the Offer
•An offer may be terminated in 5 principal ways
–Withdrawal
–Rejection
–Lapse of Time
–Upon Occurrence of a Specific Event
–Death of the Offeror
•Offer
•Termination by Withdrawal
•Generally, an offer may be withdrawn at any time before acceptance
•Notice of withdrawal must actually reach the offeree though it may be communicated by a third party
•Dickinson v Dodds (1876) 2 Ch D 463
•Offer
•Termination by Withdrawal
•Dickinson v Dodds (1876) 2 Ch D 463
–On Wed, deft offered to sell his house to clmt and promised to leave the offer ‘over’ till 9AM on Friday
–Clmt learned (from a third party) on Thursday that deft was planning to sell the house to someone else
–Clmt left a formal acceptance for the deft same day but the deft did not see it
–At 7AM on Friday Clmt handed an ‘acceptance’ to the deft but the house had been sold by then
–Held: there was no contract as the offer had been withdrawn
–that there is neither principle nor authority for saying that there must be an express and actual withdrawal of the offer
–that the clmt knew, through a third party, that the deft was no longer minded to sell the house to him and this was as plain and clear as if the deft had expressly said he withdrew the offer
–that the deft would not have been able to withdraw the offer only if both parties agreed that it was a continuing offer until acceptance
•Offer
•Termination by Withdrawal
•Note in relation to leaving the offer ‘over’
–Such a promise will only be binding if supported by consideration; sometimes called ‘buying the option’;
–See Routledge v Grant 130 ER 920
•Note also that the ‘postal rule’ does not apply in relation to withdrawal/revocation of an offer
•Byrne v Van Tienhoven (1880) CPD 344
–Defts posted letter of offer (from Cardiff to NY) on 1 October
–Clmt received the letter on 11 October and immediately accepted by telegram
–Meanwhile, defts had posted a withdrawal on 8 October which did not reach clmt until 20 October
–Held: binding contract was made on 11 October; revocation is not effective until it is communicated --- in this case on 20 October.
•offer
•Termination by Rejection
•Rejection may be express or by a counter-offer; a counter-offer kills off the last offer
•Hyde v Wrench (1840) 3 Beav 334
–Deft offered to sell his farm to clmt for £1000
–Clmt replied offering to buy it for £950
–Deft refused
–Later, clmt sent letter of “acceptance” to buy it for the original £1000; the deft refused to sell
–Held: no contract; the initial response which was a counter-offer had put an end to the offer
•Offer
•Other ways of termination
–Lapse of time
–Upon occurrence of stated specific event
–Death of the offeror.
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