Offer, Acceptance and Intention to create legal relations Summarised Notes for the Contract Law module, LLB, at City, University of London (achieved a 1st class using these) - can of course be used for other universities as well!
Would recommend the full bundle of notes
OFFER AND ACCEPTANCE AND INTENTION TO CREATE LEGAL RELATIONS
Offer
o Offer= expression of willingness to contract on specified terms, made with the intention that it
is to become binding as soon as it is accepted by the person to whom it is addressed – party
who makes offer (offeror) and party whom the offer is addressed (offeree)
o Court will see if agreement has been reached with meeting of the minds; or now objective
test as to offeror’s intention (if reasonable person would believe offeror implied by
words/conduct that he intended to be bound is sufficient, regardless of state of mind)
University made unconditional offer to an applicant in error (Moran v University College
Salford (1994))
Invitation to treat
o Invitation to treat= preliminary statement expressing willingness to receive offers, free to
accept or reject
o It is before offer and acceptance
o Situations of invitation to treat: Advertisements; Self-service and shop window displays;
Auctions; Invitation to tender; Mere statements of price
o Advertisements: generally considered as invitations to treat
*Partridge v Crittenden (1968)*: D placed advertisement in magazine ‘Bramblefinch cocks,
bramblefinch hens 25s each’, prosecuted under Protection of Birds Act 1953 for ‘offering for
sale’ wild bird court held advertisement was an invitation to treat, express of willingness to
receive offer, starting negotiations
o Advertisements with unilateral offer considered as an offer
Unilateral offer: when one party promises to pay the other sum of money (or act) if other does
something of advertisement indicates that advertiser promises to pay something in return
for a course of action then advertiser bound by that promise
e.g. £100 to anyone that finds my dog (unilateral); I will give you £100 if you find my dog
(bilateral)
*Carlill v Carbolic Smoke Ball (1893)*: D sold a patent medicine (smoke ball), placed on
newspaper stating would pay £100 to anyone ‘who contracts influenza, colds or any disease,
after used ball 3 times for 2 weeks’. Claimant caught flue after using ball as directed,
defendant argued advert was a ‘mere puff’ COA held offer was unilateral to the world at
large which was accepted by claimant entitled to £100
Principle of Carlill also applies to advertisements offering rewards treated as offers since
intention for offeror to be bound as soon as information is given (Williams v Carwardine
(1833))
o Self-service and shop window displays
Goods on display in self-service shop or window is an invitation to treat
*Pharmaceutical society Great Britain v Boots Cash Chemists (1953)*: Boots introduced self-
service, s.18 of Pharmacy and Poisons Act 1933 provided sale of certain drugs to be under
supervision of a registered pharmacist held contract formed when goods were presented at
cash desk and that display was merely an invitation to treat
*Fisher v Bell (1961)*: shopkeeper displayed flick knife in window, Offence Weapons Act
1959 prohibited for sale ‘offering for sale’ of various offensive weapons, including flick
knives shop keeper charged under the Act Held display of knife was invitation to treat
shopkeeper was not offering it for sale
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, o Auctions: lot itself (with auctioneer’s request for bids) is invitation to treat, each bid represents
an offer to buy, acceptance is when hammer falls
*British Car Auctions v Wright (1972)*: D prosecuted for offering an unroadworthy vehicle for
sale held car not offered for sale, there had been an invitation to treat (bid) like said in
Sales of Goods Act 1979, s57(2): sale by auction is complete when the auctioneer announces
its completion by fall of the hammer
oAuction ‘without reserve’ highest bid is accepted= offer Barry v Davies (2000)
oBarry v Davies (2000): auctioneer withdrew goods from an auction when a bid had been
correctly placed, auction was advertised as one without reserve held cannot withdraw, have
to sell to highest bidder
oInvitations to tender: normally invitations to treat
contract for specific job e.g. building a kitchen person who makes invitation not bound to
accept any offers (Spencer v Harding (1870))
Goods can be sold by tender, services can be done by tender
The person inviting the tender chooses the lowest offer→ the offeror can use a lot of money
to make the offer, but may not get accepted
Separate contract for this (feel aggrieved if offer is not accepted) can sue (Harvela)
Harvela V Royal Trust of Canada – involves sale of shares
Court found a remedy for the aggrieved offeror – with an implied contract to accept the
highest bid
Case involves sale of controlling shares (influence decisions in a company)
Invites confidential seal bids (no one else know what each other is bidding) with the seller
saying they are bind to accept the highest bid
A referential bid came, a bid with an x amount of cash, or higher than the highest offer
HOL: said presumed intention to accept fixed bids, when said they are bind to accept highest
offer
The referential bid lost due to this
oParties issuing invitation to tender bound to consider tender properly before any deadline
(Blackpool)
Blackpool and Fylde Aero Club v Blackpool Borough Council (1990)
company offer pleasure fights was granted by council; council invited the company to bid for
the rights to fly them for the next period; council said no tender received after the last date
and time will be considered
But mistakes in the council, it was recorded as arriving late (someone in the office did not
check the mail)
Another company then gets the tenderaggrieved
They sue the council and argue that in making the contract was making a unilateral contract
that they would consider any tender that was on time
Court agreed that the use of the language with no tender would be considered after the
given date and time→ so got some remedy, but could not sue for breach of contract (so
almost like a side deal) → the company was accepted in this exception due to contractual
rights
oMere statements of price: simply stating minimum price of willing to sell= invitation to treat
*Harvey v Facey (1893)*: Harvey telegrammed ‘will you sell us Bumper Hall Pen? Telegraph
lowest cash price’; Facey answered ‘lowest price for BHP is £900’; Harvey answered: ‘we agree
to buy BHP for £900 asked by you’ Harvey claimed Facey accepted and sued for specific
performance held no offer, statement of price is not an offer capable of acceptance
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