Summary
Summary Contract Law Case Law Summaries (formative elements)
- Module
- Contract Law (4FFLK902)
- Institution
- Kings College London (KCL)
Contract Law Case Law Summaries (formative elements)
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CONTRACT LAW – FORMATIVE ELEMENTS CASELIST:
1. AGREEMENT
A. THE OFFER
(i) Invitations to treat
*Fisher v Bell [1961]
Facts
The defendant shopkeeper displayed in his shop window a
flick knife accompanied by a price ticket displayed just behind
it. He was charged with offering for sale a flick knife, contrary
to s. 1 (1) of the Restriction of Offensive Weapons Act
1959.
Issue
The issue was whether the display of the knife constituted an
offer for sale (in which case the defendant was guilty) or an in-
vitation to treat (in which case he was not).
Held
The court held that in accordance with the general principles
of contract law, the display of the knife was not an offer of
sale but merely an invitation to treat, and as such the defend-
ant had not offered the knife for sale within the meaning of
s1(1) of the Act. Although it was acknowledged that in ordin-
ary language a layman might consider the knife to be offered
for sale, in legal terms its position in the window was inviting
customers to offer to buy it.
It is well established in contract law that the display of an item
in a shop window is an invitation to potential customers to
treat. The defendant was therefore not guilty of the offence
with which he had been charged.
*Pharmaceutical Society v Boots Cash Chemists [1953]
Facts
The defendant ran a self-service shop in which non-prescrip-
tion drugs and medicines, many of which were listed in the
Poisons List provided in the Pharmacy and Poisons Act
1933, were sold. These items were displayed in open shelves
from which they could be selected by the customer, placed in
a shopping basket, and taken to the till where they would be
paid for. The till was operated by a registered pharmacist.
,However, the claimant brought proceedings against the de-
fendant for breach of section 18(1) of the Pharmacy and
Poisons Act 1933, which requires the supervision of a re-
gistered pharmacist for the sale of any item in the Poisons
List.
Issue
The question was whether the contract of sale was concluded
when the customer selected the product from the shelves (in
which case the defendant was in breach of the Act due to the
lack of supervision at this point) or when the items were paid
for (in which case there was no breach due to the presence of
the pharmacist at the till).
Held
The Court of Appeal held that the defendant was not in breach
of the Act, as the contract was completed on payment under
the supervision of the pharmacist. The display of the goods on
the shelves were not an offer which was accepted when the
customer selected the item; rather, the proper construction
was that the customer made an offer to the cashier upon ar-
riving at the till, which was accepted when payment was
taken. This analysis was supported by the fact that the cus-
tomer would have been free to return any of the items to the
shelves before a payment had been made.
Spencer v Harding (1870)
Facts
The defendants advertised a sale by tender of the stock in
trade belonging Eilbeck & co. The advertisement specified
where the goods could be viewed, the time of opening for
tenders and that the goods must be paid for in cash. No re-
serve was stated. The claimant submitted the highest tender
but the defendant refused to sell to him.
Held
Unless the advertisement specifies that the highest tender
would be accepted there was no obligation to sell to the per-
son submitting the highest tender. The advert amounted to an
invitation to treat, the tender was an offer, the defendant
could choose whether to accept the offer or not.
*Harvey v Facey [1893]
Facts
, Harvey sent a Telegram to Facey which stated: -
"Will you sell us Bumper Hall Pen? Telegraph lowest cash
price-answer paid;"
Facey replied by telegram:
"Lowest price for Bumper Hall Pen £900."
Harvey then replied:
"We agree to buy Bumper Hall Pen for the sum of nine hun-
dred pounds asked by you. Please
send us your title deed in order that we may get early posses-
sion."
Held:
The Privy Council held that there was no contract concluded
between the parties. Facey had not directly answered the first
question as to whether they would sell and the lowest price
stated was merely responding to a request for information not
an offer. There was thus no evidence of an intention that the
telegram sent by Facey was to be an offer.
(ii) General Offers
*Carlill v Carbolic Smoke Ball Co [1893]
Emphasised the significance of offer and acceptance in con-
tract law; distinguishes between offers and invitations to treat.
Facts
The defendant, the Carbolic Smoke Ball Company, placed an
advertisement in a newspaper for their products, stating that
any person who purchased and used their product but still
contracted influenza despite properly following the instruc-
tions would be entitled to a £100 reward. The advert further
stated that the company had demonstrated its sincerity by
placing £1000 in a bank account to act as the reward. The
claimant, Mrs Carlill, thus purchased some smoke balls and,
despite proper use, contracted influenza and attempted to
claim the £100 reward from the defendants. The defendants
contended that they could not be bound by the advert as it
was an invitation to treat rather than an offer on the grounds
that the advert was: mere ‘puff’ and lacking true intent; that
an offer could not be made ‘to the world’; the claimant had
not technically provided acceptance; the wording of the ad-
vert was insufficiently precise; and, that there was no consid-
eration, as necessary for the creation of a binding contract in
law.
, Issue
Whether the advert in question constituted an offer or an in-
vitation to treat.
Held
The Court of Appeal found for the claimant, determining that
the advert amounted to the offer for a unilateral contract by
the defendants. In completing the conditions stipulated by the
advert, Mrs Carlill provided acceptance. The Court further
found that: the advert’s own claim to sincerity negated the
company’s assertion of lacking intent; an offer could indeed
be made to the world; wording need only be reasonably clear
to imply terms rather than entirely clear; and consideration
was identifiable in the use of the balls.
(iii) Auction Sales
*Barry v Davies (t/a Heathcote Ball & Co.) [2001]
Facts
Two brand new engine analyser machines owned by Customs
and Excise were put up for auction by the defendant auction-
eer. Each could be procured from the manufacturer for
£14,521 but despite this were listed without a reserve price.
The auctioneer failed to obtain bids of £5000 and £3000, upon
which the claimant bid £200 for each machine, but the auc-
tioneer refused to accept these bids and withdrew the ma-
chines from auction. A few days later the machines were sold
for £750 each through an advert in a magazine.
The claimant brought proceedings against the defendant, con-
tending that in an auction without a reserve price the auction-
eer was bound to deliver the goods to the highest bidder.
Issue
The issue was whether the holding of an auction without a re-
serve price amounted to a contractually binding offer to sell
the property to the highest bidder.
Held
The Court held that the holding of an auction for sale
without reserve is an offer by the auctioneer to sell to
the highest bidder, so the defendant was contractually ob-
liged to sell to the claimant. The reasoning behind this was
that the auctioneer acted as agent of the owner in the forma-
tion of the contract with the highest bidder, and this gave rise
to a collateral contract with the auctioneer himself. There was
consideration in the form of detriment to the bidder, as his bid
could be accepted unless and until it was withdrawn, and be-
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