#14767 - Agreement Itclr And Capacity To Contract - GDL Contract Law

GIBSON V MAN CITY COUNCIL

STORER V MAN CITY COUNCIL

• EXCEPTION: Manufacturers

• EXCEPTION: Promise is made to consider all bids, then an offer has been made to consider

• EXCEPTION: auction held without reserve – unilateral offer made to accept to highest bid

• An offer must be clear and certain

GIBSON V MANCHESTER CC

City treasurer wrote to G saying that the council ‘may be prepared to sell the house at 2180. G completed application form and sent it back, as requested. Council subsequently changed its policy and could not proceed with G’s application.

HELD: There was no binding contract because no offer was made. The council’s letter stated it ‘may be prepared’ to sell the house – this lacked clarity and certainty.

STORER V MANCHESTER CC

Town clerk sent C a letter which stated ‘I enclose an agreement for sale’. C signed and returned agreement as instructed. Council’s policy changed prior to town clerk signing agreement.

HELD: Letter = offer because its terms were clear and certain. Acceptance took place when C signed and returned letter therefore there was a binding contract.

• Adverts are not offers, but invitations to treat.

PARTRIDGE V CRITTENDON

Partridge placed an advertisement containing the words ‘Advertisement of Bramble Finch Cocks and Hens’. Partridge was convicted of the offence of offering the birds for sale contrary to the Protection of Birds Act 1954 and appealed.

HELD: Advert was not an offer, but an invitation to treat therefore Partridge had not committed an offence.

1. Clear and certain adverts from manufacturers with unlimited supply.

2. Unilateral offers

1. GRAINGER V GOUGH

Price list submitted by a wine merchant was held to be an invitation to treat and not an offer because the wine merchant would only have limited stock.

Obiter from Lord Herschell suggests that if the supplier is also a manufacturer, the advert could amount to an offer as, theoretically, they would have an unlimited supply of goods.

2. CARLILL V CARBOLIC SMOKE BALL CO

D placed an advert om a newspaper offering to pay 100 to anyone who contracted influenza after buying and using their smoke ball as prescribed. C used smoke ball as instructed but still caught the flu.

HELD: The advert was a unilateral offer. Carlill had accepted the offer by completing the required act therefore there was a binding contract.

• Display of goods on shelves is not an offer, but an invitation to treat.

PHARMACEUTICAL SOC OF GB V BOOTS

Under the Pharmacy and Poisons Act 1933, it was an offence to sell prohibited medicines unless the sale was supervised by a registered pharmacist. Two customers took prohibited medicines from the shelves of a self-service shop and bought them.

HELD: Display of goods on shelves = ITT. Offer is made by the purchaser and accepted by the seller at the tills. Since there was a registered pharmacist supervising sales at the tills, Boots = not guilty.

Auction Sales

GR: An auctioneer’s request for bids is an invitation to treat, not an offer.

Auctioneer is entitled to accept/reject bids.

Acceptance takes place when the auctioneer drops his hammer, and a bidder can revoke his offer before that point.

PAYNE V CAVE

D made a bid of 40 and revoked his offer when the auctioneer delated in accepting his bid.

HELD: D entitled to withdraw bid, as it was merely an offer that he could revoke any time before acceptance.

1. When an auction is held ‘without reserve’ the auctioneer is offering to sell to the highest bidder.

1. BARRY V DAVIES

C made a bid of 200 each for two new engine analysers at an auction held without reserve. List price of items was 14,000 each and auctioneer refused to sell to C because the bid was too low. C sought damages of 27,600.

HELD: In auctions without reserve, two contracts are made. 1 = bilateral contract as usual in all auction sales where an offer is made by the bidder and the fall of the hammer constitutes acceptance. 2 = unilateral where the auctioneer offers to sell to the person who makes the highest bid. Making the highest bid = acceptance. Therefore, D is in breach of the unilateral contract and C was entitled to damages amounting to the difference between the bid and the list price of the goods.

• EXCEPTION: Request for further information is not a counter-offer.