The invitations to treat. An invitation to treat

The principle of a contract is an agreement between parties
that is enforceable by law. For a contract to be recognised by law there are
certain criteria that must be met, if all of these criteria are not met then
the contract may be void, voidable or unenforceable. The essential features of
a valid contract are; offer, acceptance, consideration, intention to create legal
relations and certainty of terms. The purpose of this essay is to analyse the
elements that create a valid agreement. Agreement is the collective term given
for offer and acceptance.

An offer is defined by Edwin Peel and G. H. Treital (2015, p.241)
as an ‘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 who it is addressed.’ For
an offer to be valid the offeree must be aware of the offer, a party cannot be
held accountable unless they are aware that an offer has been made. An offer
can be made bilaterally to an individual/group or unilaterally to the whole
world. The authority for a unilateral offer is the case of ‘Carlill v Carbolic Smoke Ball Co.’ (1892).
This case set the precedent for unilateral offers. This case was upheld since
unilateral offers do not need acceptance, as long as the conditions are followed.
It is still cited in many cases to this day, an example of this being the case
of ‘Azevedo v IMCOPA’ (2013). However,
not all advertisements are regarded as offers. Advertisements that do not
contain unilateral offers are regarded as invitations to treat. An invitation
to treat is an initial statement that conveys an openness to receiving offers,
which can then be accepted or rejected. The authority for this is the case of ‘Partridge v Crittenden’ (1968).
There are many examples of invitations to treat such as items on a shelf, this
is shown in the case of ‘Pharmaceutical
Society of Great Britain v Boots Cash Chemists (Southern) Ltd’ (1953)
and items that are priced up, shown in the case of ‘Fisher v Bell’ (1960). Both cases have been cited in the
case of ‘WM Morrisons Supermarkets
Plce v Reading Borough Council’ (2012) a very recent case showing that
these cases are the authority to which cases involving invitations to treat are
held.

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An offer comes to an end when it has either been rejected, the
time the offer was valid for or a reasonable period has lapsed, death or
revocation.

For an offer to be accepted the mirror image rule, which
states that the acceptance must exactly match the offer, must be followed. If
the acceptance is not the exact same as the offer, then this is regarded as a
counter offer. Counter offers mean that the original offer has been rejected,
it is now up to the original offeror to accept, reject or counter the newly
proposed offer. Acceptance is defined by Edwin Peel and G. H. Treital (2015,
p.246) as a ‘final and unqualified
expression of assent to the terms of an offer’, which means that for an
offer to be accepted that there must be no conditions that come with the acceptance.
Offers can be accepted by an outward expression of acceptance or it can be inferred
from conduct as seen in the case of ‘Alexander
Brogden v Metropolitan Railway Co’ (1877). This case has been cited
numerous times since as it set the authority for acceptance, some of the most
recent cases of this are seen in the ‘Finmoon
Ltd v Baltic Reefers Management Ltd’ (2012) and in the case of ‘Reeille Independent LLC v Anotech
International (UK) Ltd’ (2016). Silence, however, generally will not
constitute valid acceptance, this can be seen in the case of ‘Felthouse v Bindley’ (1862),
this is also a very important case as it set the example for future cases. A
recent example of where this case has been cited is the ‘Linnett v Halliwells LLP’ (2009) case.

There are rules regarding when acceptance is valid depending
on how acceptance is communicated. When acceptance is posted, acceptance is
valid when the letter is posted and not when the letter is received, this can
be seen in the case of ‘Adams v
Lindsell’ (1818) this case is based on the postal rule. For
instantaneous forms of communication (e.g. telex, phone conversation, fax), acceptance
occurs when it is received, this is shown in the case of ‘Entores Ltd v Miles Far East Corp.’ (1955). This means that
acceptance sent outside of the working hours only becomes valid at the start of
the next working day. Both cases are very important regarding acceptance and were
recently cited in the case of ‘Four
Seasons Inc v Brownlie’ (2017), showing how significant these cases are
with regards to acceptance as they are still being used in modern day trials.
Not all forms of communication are instant, emails and texts are not classed as
an instantaneous form of communication. There is currently no authority on when
the contract is formed when a non-instantaneous method is used for acceptance,
due to this there are different ways to decide when acceptance occurred.
Either, the contract is formed when; the message is read, the message is
received or when the acceptance is sent. The Sale of Goods Act 1979 is an act
that contains many regulations relating to contract law. Part II of the act is
based on the formation of contracts, it states that the sale of goods is a contract
by which for a price the seller will deliver goods to the buyer (legislation.gov.uk,
2017).

If issues arise once a contract is in place or during the
formation of a contract, as long as the contract is enforceable, it can go
through the courts system. For civil cases, which contract law is part of, the
case will usually be seen in the County Court, these can then go to the High
Court, then through the Court of Appeal and then to the UK Supreme Court which
is the highest court within our system. A contract is only enforceable if the
contract that is in place is based on an agreement between the parties and both
parties had capacity to enter into a binding contract. All living adults who
are sober and of sound mind have the ability to enter into such contracts. This
means that minors, anyone aged under 18, do not have the ability to enter into such
contracts. Due to this the other party will be unable to enforce the contract
against the minor, however, the minor is able to enforce the contract against
them. There are of course some exceptions to this rule, this includes where it
is necessary that a minor enter into such contract; an example being buying food
or drink, or accessing medical services. The Sale of Goods Act 1979 contains
the rules regarding capacity to buy and sell. Stating that only necessaries can
be sold, at a fair price, to a person who isn’t competent to contract (legislation.gov.uk,
2017). Another exception is when entering employment or becoming an apprentice,
as long as the contract is of benefit to the minor.

Overall, an agreement occurs when an offer is made to an offeree
who accepts the proposed offer. As long as the criteria are met, and the
contract is enforceable, the courts will be able to take action against one or
both of the parties should a case be brought to court. There are many cases
that are used as the authority when these cases go to trial as shown above and
explained further in the appendix.

 

 

 

 

 

 

 

 

 

 

 

References

Peel, E and Treital, G.H (2015) Treitel on the law of contract. 14th edn.
London: Sweet and Maxwell

‘Carlill v Carbolic Smoke Ball Co.’ (1892) United Kingdom
Court of Appeal, case 256. Westlaw
Online.
(Accessed 8th January 2018)

‘Azevedo v IMCOPA’ (2013) United Kingdom Court of Appeal,
case A3/2012/1532. Westlaw Online
(Accessed 8th January 2018)

‘Partridge v Crittenden’ (1968) United Kingdom Queen’s Bench
Division. Lexis Online
(Accessed 8th January 2018)

‘Pharmaceutical Society of Great Britain v Boots Cash
Chemists (Southern) Ltd.’ (1953) United Kingdom Queen’s Bench Divisional Court,
case 1413. Lexis Online
(Accessed 8th January 2018)

‘Fisher v Bell’ (1960) United Kingdom Queen’s Bench
Division, case 394. Westlaw Online
(Accessed 8th January 2018)

‘WM Morrisons Supermarkets Plce v Reading Borough Council’
(2012) United Kingdom High Court of Justice Queen’s Bench Division Divisional
Court, case CO/2962/2011. Westlaw
Online
(Accessed 8th January 2018)

‘Alexander Brogden v Metropolitan Railway Co’ (1877) United
Kingdom House of Lords, case 666. Lexis
Online
(Accessed 8th January 2018)

‘Finmoon Ltd v Baltic Reefers Management Ltd’ (2012) United
Kingdom Queen’s Bench Division (Commercial Court) case 2011 FOLIO 115. Westlaw Online
(Accessed 8th January 2018)

‘Revielle Independent LLC v Anotech International (UK) Ltd’
(2016) United Kingdom Court of Appeal, case 443. Lexis Online
(Accessed 8th January 2018)

‘Felthouse v Bindley’ (1862) United Kingdom Court of Common
Pleas. Westlaw Online
(Accessed 8th January 2018)

‘Linnett v Halliwell LLP’ (2009) United Kingdom Queen’s
Bench Division (Technology & Construction Court), case 8QZ06856. Westlaw Online 
(Accessed 8th January 2018)

‘Adams v Lindsell’ (1818) United Kingdom Court of King’s
Bench, case 250. Westlaw Online
(Accessed 8th January 2018)

‘Entores Ltd v Miles Far East Corp.’ (1955) United Kingdom
Court of Appeal, case 327. Lexis Online
(Accessed 8th January 2018)

 ‘Four Seasons Holding
Inc v Brownlie’ (2017) United Kingdom Supreme Court, case 2015/0175. Westlaw Online
(Accessed 8th January 2018)

Legislation.gov.uk (2017) Sale of Goods Act 1979. Available at: https://www.legislation.gov.uk/ukpga/1979/54
(Accessed 9th January 2018)

 

Appendix

 ‘Carlill v Carbolic Smoke Ball Co.’ (1892)
where an advert was placed in the newspaper offering £100 to anyone who caught
the flu after using their product, they deposited £1000 into the bank as a sign
of sincerity. This case was upheld by the court and Carlill won her case as the
court deemed that the advert was a unilateral offer meaning that acceptance did
not need to be communicated and the deposit of £1000 showed they had the
intention to pay out for any claims.

‘Azevedo
v IMCOPA’ (2013)        
An offer was made in terms of an ‘if’ contract; if you case the votes in favour
of the resolution, and if the resolution is duly passed, then I will pay you
the stated amount. So, on the authority of Carlill v Carbolic Smoke Ball Co.,
if the resolution is passed, and if the noteholder voted in favour they would
be entitled to a payment in line with the offer

‘Partridge
v Crittenden’ (1968)  
An advertisement was put in the ‘Classified Advertisements’ section of a paper,
there were no use of the words ‘offer for sale’. The bird sold was a wild live
bird which is against the Protection of Birds Act 1945. However, the
advertisement on appeal was seen as an invitation to sell and not an offer for
sale so the offence was not established.

‘Pharmaceutical
Society of Great Britain v Boots Cash Chemists (Southern) Ltd.’ (1953)    
A customer took items off the shelf, that were specified in Part I of the
Poisons List, then took them to the counter this constituted an offer to buy
from the customer and not the acceptance of an offer by Boots. A Pharmacist
supervised the transaction, in line with the provision provided in the Pharmacy
and Poisons Act 1933.

‘Fisher
v Bell’ (1960)
A “flick knife” was displayed in the window of a shop, police alleged that the
knife was offered for sale. The court deemed that in the absence of a
definition of “offer for sale” in the Restriction of Offensive Weapons Act
1959, that it was merely an invitation to treat and not an offer for sale.

‘WM
Morrisons Supermarkets Plce v Reading Borough Council’ (2012)    
A young person acting on behalf of the local authority was sold tobacco
products; the case of Fisher v Bell was used as this case establishes that the
meaning given by the law of contract must prevail unless a different meaning is
given in the statute. As “sells” was not given a meaning in the statute, the
contractual meaning stands. Therefore, as the young person was acting an agent
for the local authority who are the principle, meaning the sale was to the
principle and the tobacco was not sold to the young man. 

‘Alexander
Brogden v Metropolitan Railway Co’ (1877)   
A contract was drawn up between the two parties, B added to it and gave it to
the arbitrator who wrote approved at the bottom and signed it. Both parties
then acted in accordance with the arrangements in the contract. When issues
started to arise Brogden denied that there was a contract in place. Aa
acceptance was implied by conduct and the arbitrator signed the agreement, the
contract was enforced.

‘Finmoon
Ltd v Baltic Reefers Management Ltd’ (2012)   
A contract of affreightment was in place between the parties, weekly shipments
were taken to Petersburg from Ecuador. After the COAs came to an end the weekly
vessels for the shipments were still supplied. Based on the conduct it was
inferred that a COA was still in place on the authority of Alexander Brogden v
Metropolitan Railway Co                

‘Revielle
Independent LLC v Anotech International (UK) Ltd’ (2016)           
A standard form ‘Deal Memo’ was sent to Anotech, it was also expected that a
long form agreement would be entered into, Anotech’s director signed the
document and sent it back along with handwritten amendments. The long form
agreement was also never reached. Anotech wouldn’t pay and stated that no
contract had been formed. It was ruled that acceptance was implied by conduct.
Referred to the Brogden v Metropolitan Railway Co.

‘Felthouse
v Bindley’ (1862)        
There was a discussion involving the sale of a horse and an offer was made, the
horse was then sold at an auction. However, as the offer had never been
accepted (silence does not constitute acceptance) the auction of the horse was
legal as it had not been sold.

‘Linnett
v Halliwell LLP’ (2009)   
An adjudicator did not have jurisdiction and a contract was formed by conduct
with an obligation to pay the adjudicators fees and expenses. Silence does not
constitute acceptance of an offer and as there was no acceptance a contract was
not formed. The authority for this is the case of Felthouse v Bindley.

‘Adams
v Lindsell’ (1818)             
An offer was made by post and acceptance sent by post however by the time the
acceptance had reached the offeree they had already sold the goods. As
acceptance occurs when the letter is sent, the offeree was in breach and
therefore owed damages. This is based on the postal rule.            

‘Entores
Ltd v Miles Far East Corp.’ (1955)            
Offer and acceptance were sent via Telex which is an instantaneous form of
communication. As the acceptance to the offer was received in London, the
contract was made within the jurisdiction and the leave to serve notice of the
writ in an action for damages due to breach of contract could be served. This
case references Adams v Lindsell

 ‘Four Seasons Holding Inc v Brownlie’ (2017)     
Following an excursion in Egypt, a car accident occurred where Brownlie was
injured and her husband was killed, which she had organised from the UK via
telephone. Citing both Entores v Miles Far East Corp with reference to
instantaneous forms of communications and citing Adams v Lindsell regarding
when acceptance is posted.

 

 

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