a definite promise to be bound provided that certain specified terms are accepted per Furmston Offer An intimation by words or conduct, of a willingness to enter into a legally binding contract, which in its terms expressly or impliedly indicates that it is to become binding on the offeror as soon as it has been accepted by an act, forbearance or return promise on the part of the person to whom it is addressed. Per Anson.
Offeror and Offeree Offeror person making the offer. Offeree person who receives the offer. Who an offer can be made to? Offeror can make an offer to: i) an individual ii) group of people iii) whole world Carlill v Carbolic Smokeball Company.
Invitation to Treat Not statement of intention to be bound instead it is an invitation to the offeror to make an offer.
Invitation to do business at the preliminary stagescome and make an offer.
Offer or invitation to treat
Depends on intention of parties by using an objective test.
Advertisement Will usually be an invitation to treat.
Grainger v Gough [1896] AC 325
Wine merchant sent out circular listing wines and their prices. Was that circular an offer or invitation to treat. Court held that it was an invitation to treat.
Invitation to treat Mere display on shelf
Fisher v Bell [1961] 1 QB 394 Goods were on display in window. A flick knife categorised as an offensive weapon. Held that the display was not an offer but an invitation to treat. To avoid breach of contracts courts used practical approach. Contrast Grainger v Gough with Carlill v Carbolic Smokeball Co. There was a definite promise for which 1000 pounds was set aside. The more detail you give, the more likely it is to be an offer Mere Puff Just sales talk, extravagant sales talk. Goods displayed in shop case. Pharmaceutical Society of Great Britain v Boots Cash Chemists (Southern) Ltd [1953] 1 QB 401, where prescribed drugs had to be bought from a pharmacist. Boots tried to sell drugs in a supermarket way. The case was an overlap between contracts and criminal law. Criminal defence putting goods on shelf was an invitation to treat, as only at check out was a contract made.
Invitation to Treat Auction Payne v Cave (1789) 100 ER 502
A man bid 40 pounds for goods that were auctioned. He withdrew his offer before the hammer went down. Court held that that was fine because bid was only an offer which could be withdrawn at any time.
Tenders an announcement inviting tenders is categorized as an invitation to treat. Only when people send in what they are prepared to pay an offer is made. Sivams Transport v Nadi Town Council (1981) 27 FLR 192 Sometimes it is very difficult to distinguish between the two. Ie an offer and an invitation to treat.
Ask 2 questions i) Is it specific and clear?
ii) Is it made with the intention of being bound by acceptance?
Need to distinguish an offer from mere supply of information. Harvey v Facey [1893] AC 552 Plaintiffs said to defendants will you sell us your piece of land? Defendant did not give any details but just told the price. Just supplying the price.
Offer has to be communicated. Cannot accept an offer without being aware. Court made it clear that offer can not be accepted unless offeree is aware. Taylor v Laird (1856) 25 LJ Ex 239.
Offeree has to be aware of the offer. Offer has to be communicated to be accepted so cross offers are not binding.