“An expression of willingness to contract on certain terms, made with the intention that it shall become binding as soon as it is accepted by the person to whom it is addressed.”

Treitel

Carlill v Carbolic Smoke Ball Company [1893]

CSB made a product that they claimed would keep the flu away from anyone who took it. They published it in the papers claiming that anyone who got the flu after taking it would be rewarded with £100.

Mrs. Carlill claimed that she got the flu, but CSB refused to pay, so she sued for breach of contract.

Ruling: Usually, acceptance must be communicated, but one who makes a unilateral offer for the sale of goods by means of an advertisement impliedly waives notification of acceptance if his purpose is to sell as much product as possible

Powell v Lee (1908): P applied for job and received informal acceptance from a board member. After the board changed its mind, P sued the school.

R v Clarke (1927)Reward "for such information as shall lead to the arrest and conviction of the person or persons who committed the murders“Held: Necessary to act in "reliance on" an offer in order to accept it

Bloom v American Swiss Watch Co. (1915)

The claimant gave evidence to the authorities which led to the arrest of some jewel thieves. He then discovered that the defendant had previously advertised a reward for such information. The defendant refused payment.

Held: the defendant was not legally obliged to pay as no contract to do so existed between the parties, since the offer of the reward had not been communicated to the claimant prior to his giving the information

Williams v Carwardine (1833)

Mrs. Carwardine’s husband was murdered, so she offered a reward of £20 for whomever would give information that would lead to the arrest and conviction of the murderers. Mrs. Williams knew about the reward, but did not say anything about her husband being the murderer until he savagely beat her.

Mrs. C refused to pay, stating that Mrs. W’s reason for giving evidence was not for the reward, but for revenge

A vague offer cannot be accepted

Loftus v Roberts (1902) – “salary to be arranged”

Scammel v Ousten (1941) – no certainty as to the terms of the agreement

An agreement to make an agreement or an agreement to negotioate at a later date will not constitute a valid contract. It will be void ab initio (void from the beginning/never existed):

Walford v Miles (1992)

Gibson v Manchester City Council (1979)

Invitation to treat - invitation for others to make an offer

Public Advertisements – Partidge v Crittenden (1968)

Goods in a shop window – Fisher v Bell (1961)

Goods on a shelf – Timothy v Simpson (1834)

• Offer can be withdrawn at any time before acceptance, but it MUST be communicated to the offeree before acceptance

• Byrne v Van Tienhoven (1880)• 1st October – V posted letter offering goods for sale• 8th October – V revoked the offer, which arrived on

20th Oct.• 11th October – B accepted offer• 15 October – B posted letter confirming acceptance

Payne v Cave (1789) – auction is invitation to treat until hammer goes down

Buyers & Auctioneers

Warlow v Harrison (1859) – Owner made highest bid to “win” auction to prevent underselling. There was a breach of contract between auctioneer and highest bona fide bidder, therefore the plaintiff has the right of action against the auctioneer.

Barry v Davies [2000] – A “without reserve” auction cannot be cancelled because of low bid

Buyers & Sellers

McGowan & Co. v Gomes [1891-93] L.R.B.G. 171

Facts: A merchant’s stock was offered for sale in an advertisement headed “highest offer gets it” and in which tenders were invited. The Plaintiff made a tender; the defendants refused to sell at the price tendered, there being only one tender.

Held: The advertisement constituted an offer to sell, and there being no condition in the advertisement that there should be more than one offer, the plaintiff’s tender was an acceptance which bound the defendant.

Situations where the revocation of an offer does not need to be communicated to the offeree

1.Where offers are made to the world at large

2.Where communication does not occur because of the offeree’s conduct; e.g., changing address or receiving mail but not reading it

An acceptance is a final and unqualified assent to the terms of an offer

Acceptance Rules1. Acceptance must be unconditional

2. A counter-offer is not an acceptance

3. Acceptance must be communicated

Prohibits an offeree from changing the terms of that offer

Counter-Offer negates initial offer

Hyde v Wrench (1840)W offered to sell a farm to H for 1000. H offered

to pay 950, but W rejected the offer. H then agreed to pay the 1000, but W refused to sell him the farm

Stevenson, Jaques, & Co. v McLean [1880]However, a request for more information is not a

counter-offer.

Cannot form basis of contract even though party to whom made may have acted upon it.

Re Fickus (1900)

Supply of information cannot amount to an offerHarvey v Facey (1893)

H: "Will you sell us Bumper Hall Pen? Telegraph lowest cash price-answer paid;" 

F: "Lowest price for Bumper Hall Pen £900."

H:"We agree to buy Bumper Hall Pen for the sum of nine hundred pounds asked by you.

"Frequently an offeree, while making a positive acceptance of the offer, also makes a request or suggestion that some addition or modification be made. So long as it is clear that the meaning of the acceptance is positively and unequivocally to accept the offer whether such request is granted or not, a contract is formed."

Masters v Cameron (1954) [Australian] – Initial judgment suggested a contract, but was reversed on appeal. Ardente v Horan (1976) [American]

1. Acceptance must be according to method unless it does not disadvantage offerer and gets there in the same amount of time as the prescribed method – Yates v Pulleyn (1975): Ordinary post instead of recorded

2. Silence is not acceptance

Silence is not acceptance – Felthouse v Bindley (1862): “If I hear no more from him, I consider the horse mine…”

Acceptance must actually be communicated: “receipt rule” – Adams v Lindsell (1818)

2nd September – Offer letter to sell goods asking for “reply in the post”

5th September – Offer received and acceptance sent

9th September – Acceptance received, but goods were sold on the 8th

Courts: Binding contract

Effective communication of acceptance by letter, is on posting… until

Entores Ltd. v Miles Far East Corp. [1955]

The contract is only complete when the acceptance is received by the offeror.