#16123 - Offer And Acceptance

An offer is (i) a proposal of the terms of exchange and (ii) an expression of willingness to be bound as soon as offeree accepts. It can be distinguished from:

A request for or supply of information (ex. Upon C’s request asking whether D will sell them Y and price, D replied with a price, and C purported to accept the “offer” – held that it was not an offer because D merely supplied information – Harvey v Facey (PC))
An invitation to treat, i.e. an expression of willingness to embark on negotiations.

In negotiations, there will only be an offer where one party confers on the other the power to bind the speaker. Contrast:

Storer v Manchester CC (1974)

Facts: D, council, sent a brochure advertising the details of a scheme for tenants to buy their council houses. C ascertained the price and sent an application to buy. The council sent a letter saying “I enclose the agreement for sale. If you sign it and return it to me I will send you the agreement signed in exchange”. C signed and returned the agreement.
Held (CoA): a contract was concluded because the council’s letter evinced an intention to be bound by the terms of the agreement as soon as C accepted it by signing and returning it.

*Gibson v Manchester CC [1979] 1 WLR 294

Facts: C inquired and council responded informing him of the price at which the “council may be prepared to sell the house” and giving details of a mortgage proposal while expressly stating that the letter should not be regarded as a firm offer of a mortgage and that C should complete a further form if C wished to make a formal application. C applied, made some repairs, and the council put the house on the house purchase list.
Held (HL): the letter did not confer power on C to bind the council to sell the house as soon as C assented; the council warned against regarding the letter as a firm offer and invited C to make a formal application (which became an offer). The council’s conduct manifested an intention to accept C’s offer, but had not yet completed the acceptance by communicating it to C.

NB here Lord Denning (CoA) suggested that the sole test of offer/acceptance should be whether parties reached an agreement rather than forcing the facts into the template of offer and acceptance (so in this case a binding contract HAS been reached).

Lord Diplock rejected this, holding that while some exceptional types of contract may not fit into offer/acceptance, this is not such a case. CoA was led into error by departing from the conception of a contract made from offer/acceptance. In this case, the letter was an invitation to make an application, not accept an offer. Hard cases offer a strong temptation to let them have their proverbial consequences. It is a temptation that the judicial mind must be vigilant to resist.

1/ Displays and advertisements

a/ Principle = Invitation to Treat

Even if the word “offer” is used the court may still say it’s an invitation to treat because the owrd is not used in its legal sense (Spencer v Harding), so the customer is generally regarded as making the offer when they present goods at the cash desk (and the trader can accept or reject).

*PSGB v Boots [1952] 2 QB 795

Facts: legislation required sales of certain pharmaceuticals to be supervised by pharmacists. Boots introduced self-service shopping and supervision only came at the cashier’s desk, so the question was at what point offer and acceptance came together.
Held: Boots did not contravene the legislation because displays and advertisements are not offers, because:
- If displays were offers, then the customer putting it into the basket amounts to acceptance so the customer can no longer change their mind¹
- If displays were offers, then vendors lose their freedom not to deal with particular customers²
- If displays were offers, then vendors would have to trade with everyone who accepts even if they run out of stock³

The actual reason was probably that the court didn’t want to deter self-service pharmacies by convicting Boots of an offence.

Partridge v Crittenden [1968] 1 WLR 1204

Facts: D advertised birds for sale at a stated price, and was charged with the offence of “offering for sale” wild live birds contrary to legislation.
Held: not guilty because an advertisement was only an invitation to treat and not an offer.

b/ Exception = offer

Chapelton v Barry UDC (1940)

Facts: the display of deckchairs for hire on a beach with notice of the charges was an offer, which was accepted by a customer taking the chair. This means that the ticket issued to the customer containing an exclusion of liability was not part of the contract (so that the customer could claim compensation when the deckchair injured him.

*Carlill v Carbolic Smoke Ball Co [1893] 1 QB 256

Facts: the advertisement was held to be an offer to the whole world and that a unilateral contract was created with those who met the condtion on the faith of the advertisement.

2/ Timetables and automatic vending machines

Subject to express disclaimers of obligations to provide services, railway and bus timetables and automatic machines outside car parks are offers that the customer accepts by buying a ticket.

Thornton v Shoe Lane (1971)

Lord Denning: an automatic machine outside a car park stating charge rates makes an offer which the driver accepts by driving in and prompting the machine to issue a ticket (so any exclusion of liability contained in a notice inside the car park was ineffective). This is because there is no expectation or opportunity for negotiation, and no scope for withdrawal once the customer drives in.

3/ Tenders

a/ General rule = invitation to treat

General rule (Harvela Investments)

An invitation to tender is an invitation to treat
Submitting the tender is the offer
When the invitor accepts one of the tenders, there is acceptance

b/ Exception = two-contract analysis

However, when justice requires, courts have invoked two-contract analyses to impose liability for failure to consider (or accept)...

#16123 - Offer And Acceptance - Contract Law

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