Contract Law Cases - Complete Set

Front 1

Harvey v Facey [1893] UKPC 1
Offer

In order to amount to an offer it must be shown that the offeror had the intention to be bound:

Back 1

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 hundred pounds asked by you. Please
send us your title deed in order that we may get early possession."

Front 2

Harvey v Facey [1893] UKPC 1
Offer

In order to amount to an offer it must be shown that the offeror had the intention to be bound:

Back 2

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.

Front 3

Carlill v Carbolic Smoke Ball co [1893] 1 QB 256
Offer

In order to amount to an offer it must be shown that the offeror had the intention to be bound:
Advertisements
Advertisements are also generally invitations to treat:

Back 3

A Newspaper advert placed by the defendant stated:-£100 reward will be paid by the Carbolic Smoke Ball Company to any person who contracts the influenza after having used the ball three times daily for two weeks according to the printed directions supplied with each ball...£1000 is deposited with the Alliance Bank, shewing our sincerity in the matter."Mrs Carlill purchased some smoke balls and used them according to the directions and caught flu. She sought to claim the stated £100 reward.
The defendant raised the following arguments in defence:
1. The advert was a sales puff and lacked intent to be an offer.
2. It is not possible to make an offer to the world.
3. There was no notification of acceptance.
4. The wording was too vague to constitute an offer since there was no stated time limit as to catching the flu.
5. There was no consideration provided since the 'offer' did not specify that the user of the balls must have purchased them.

Front 4

Carlill v Carbolic Smoke Ball co [1893] 1 QB 256
Offer

In order to amount to an offer it must be shown that the offeror had the intention to be bound:
Advertisements
Advertisements are also generally invitations to treat:

Back 4

Held:The Court of Appeal held that Mrs Carlill was entitled to the reward as the advert constituted an offer of a unilateral contract which she had accepted by performing the conditions stated in the offer. The court rejected all the arguments put forward by the defendants for the following reasons:
1. The statement referring to the deposit of £1,000 demonstrated intent and therefore it was not a mere sales puff.
2. It is quite possible to make an offer to the world.
3. In unilateral contracts there is no requirement that the offeree communicates an intention to accept, since acceptance is through full performance.
4. Whilst there may be some ambiguity in the wording this was capable of being resolved by applying a reasonable time limit or confining it to only those who caught flu whilst still using the balls.
5. The defendants would have value in people using the balls even if they had not been purchased by them directly.

Front 5

Fisher v Bell [1961] 1 QB 394
Goods on display in shops

Goods on display in shops are generally not offers but an invitation to treat. The customer makes an offer to purchase the goods. The trader will decide whether to accept the offer:

Back 5

The defendant had a flick knife displayed in his shop window with a price tag on it. Statute made it a criminal offence to 'offer' such flick knives for sale. His conviction was quashed as goods on display in shops are not 'offers' in the technical sense but an invitation to treat. The court applied the literal rule of statutory interpretation.

Front 6

Partridge v Crittenden (1968) 2 All ER 421
Advertisements
Advertisements are also generally invitations to treat:

Back 6

The defendant placed an advert in a classified section of a magazine offering some bramble finches for sale. S.6 of the Protection of Birds Act 1954 made it an offence to offer such birds for sale. He was charged and convicted of the offence and appealed against his conviction.

Held:

The defendant's conviction was quashed. The advert was an invitation to treat not an offer. The literal rule of statutory interpretation was applied.

Front 7

Ramsgate Victoria Hotel v Montefoire (1866) LR 1 Ex 109
Termination of offers

An offer may be terminated by:

1. Death of offeror or offeree

2. Lapse of time

An offer will terminate after a reasonable lapse of time. What amounts to a reasonable period will depend on the circumstances.

Back 7

The defendant offered to purchase shares in the claimant company at a certain price. Six months later the claimant accepted this offer by which time the value of the shares had fallen. The defendant had not withdrawn the offer but refused to go through with the sale. The claimant brought an action for specific performance of the contract.

Held:

The offer was no longer open as due to the nature of the subject matter of the contract the offer lapsed after a reasonable period of time. Therefore there was no contract and the claimant's action for specific performance was unsuccessful.

Front 8

Dickinson v Dodds (1876) 2 Ch D 463
3. Revocation
An offeror may revoke an offer at any time before acceptance takes place:

Back 8

The defendant offered to sell his house to the claimant and promised to keep the offer open until Friday. On the Thursday the defendant accepted an offer from a third party to purchase the house. The defendant then asked a friend to tell the claimant that the offer was withdrawn. On hearing the news, the claimant went round to the claimant's house first thing Friday morning purporting to accept the offer. He then brought an action seeking specific performance of the contract.

Held:

The offer had been effectively revoked. Therefore no contract existed between the parties. There was no obligation to keep the offer open until Friday since the claimant had provided no consideration in exchange for the promise.

The offeror is free to withdraw the offer at any time before acceptance takes place unless a deposit has been paid.

Front 9

Hyde v Wrench (1840) 49 ER 132 Chancery Division (Decided by Lord Langdale MR)
Counter offer

A counter offer is where an offeree responds to an offer by making an offer on different terms. This has the affect of destroying the original offer so that it is no longer open for the offeree to accept.

Back 9

The defendant offered to sell a farm to the claimant for £1,000. The claimant in reply offered £950 which the defendant refused. The claimant then sought to accept the original offer of £1,000. The defendant refused to sell to the claimant and the claimant brought an action for specific performance.

Held:

There was no contract. Where a counter offer is made this destroys the original offer so that it is no longer open to the offeree to accept.

Front 10

Felthouse v Bindley [1862] EWHC CP J35 Court of Common Pleas
The general rule is that the offeror must receive the acceptance before it is effective:
Silence will not amount to acceptance:

Back 10

A nephew discussed buying a horse from his uncle. He offered to purchase the horse and said if I don't hear from you by the weekend I will consider him mine. The horse was then sold by mistake at auction. The auctioneer had been asked not to sell the horse but had forgotten. The uncle commenced proceedings against the auctioneer for conversion. The action depended upon whether a valid contract existed between the nephew and the uncle.

Held:

There was no contract. You cannot have silence as acceptance.

Front 11

Adams v Lindsell (1818) 106 ER 250
The postal rule

Where it is agreed that the parties will use the post as a means of communication the postal rule will apply. The postal rule states that where a letter is properly addressed and stamped the acceptance takes place when the letter is placed in the post box:

Back 11

The defendant wrote to the claimant offering to sell them some wool and asking for a reply 'in the course of post'. The letter was delayed in the post. On receiving the letter the claimant posted a letter of acceptance the same day. However, due to the delay the defendant's had assumed the claimant was not interested in the wool and sold it on to a third party. The claimant sued for breach of contract.

Held:

There was a valid contract which came in to existence the moment the letter of acceptance was placed in the post box.

This case established the postal rule. This applies where post is the agreed form of communication between the parties and the letter of acceptance is correctly addressed and carries the right postage stamp. The acceptance then becomes effective when the letter is posted.

Front 12

Hyde v Wrench (1840) 49 ER 132 Chancery Division (Decided by Lord Langdale MR)

The terms of the acceptance must exactly match the terms of the offer.



If the terms differ this will amount to a counter offer and no contract will exist:

Back 12

The defendant offered to sell a farm to the claimant for £1,000. The claimant in reply offered £950 which the defendant refused. The claimant then sought to accept the original offer of £1,000. The defendant refused to sell to the claimant and the claimant brought an action for specific performance.

Held:

There was no contract. Where a counter offer is made this destroys the original offer so that it is no longer open to the offeree to accept.