Invitation to Treat!

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1. Pharmaceutical Society of Great Britain v Boots Cash Chemists (Southern) Ltd.(1952)!
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Facts!
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On April 13, 1951 two customers took poison from a shelf in pharmacy, put it in their basket and
paid at the cash register at the exit. The pharmacist station was near the poisons section so they
were able to oversee all transactions but the pharmacist took no part in the transaction. The
Pharmaceutical Society, as the organization responsible for enforcing provisions of the Pharmacy
and Poisons Act, 1933, brought this action as a test case against this type of retailing. At the lower
court they found this type of retailing was not in contravention of the Act and the Society appealed.!

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Issue!
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At what stage of a purchase in a self-serve store is there an acceptance of offer?!

Is the customer bound to a purchase once they place an item in their basket?!
Are Boots liable for selling poisons without a pharmacist's supervision?!
DecisionEdit!
Appeal dismissed.!

Reasons!
Somervell, writing for the court, makes an analogy to a bookseller; the customer is still browsing
while putting items in their basket and there has been no acceptance until completed at the
checkout. As a result a shopkeeper's display cannot be an offer and must be an invitation to treat.
The logical conclusion of the plaintiff's argument would be that once a customer put an item in their
basket they would be committed to the purchase and would not be able to change their mind.!

Ratio!
Goods on a display are invitation not an offer; the customer makes an offer when they take the
goods to the register.!
The cashier is under the shopkeeper's authority to make acceptance, hence a contract has not
been made until the cashier accepts the purchase.!

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2. Partridge v Crittenden (1968) 2 All ER 425!
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Facts: Case concerning the advertisement of a certain type of bird, whose 'offer for sale' was
prohibited by the Protection of Birds Act 1954. Mr Crittenden, on behalf of the RSPCA, prosecuted
Mr Partridge for having 'offered for sale' a bird that was protected under the 1954 statute. The High
Court found: That given that Mr Crittenden had chosen to prosecute on the count of 'offer for sale',
the charge had to be unsuccessful because an advert in a magazine constitutes an invitation to
treat rather than a legal offer under English law. With this finding the High Court overruled the
previous decision of the Magistrates court and quashed Mr Partridge's conviction. The court
explicitly regretted that Mr Crittenden had not chosen to prosecute on counts of 'sale of the bird' or
'possessing for sale of such a bird', both of which had also been outlawed by the very same
statute. However, having chosen to prosecute on count of 'offer for sale', the court found itself
unable to find Mr Partrige to be guilty. Any mischief rule approach to interpreting the statute in such
as way as to assess an advertisement as an offer for sale within the meaning of the statute was
dismissed as 'naked usurpation of the legislative function under the thin guise of interpretation.!

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3. Harvela Investments Ltd v Royal Trust of Canada (CI) Ltd!

Citation: (1986) AC 207!

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Background facts!
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Harvela and Outerbridge (2 companies) were requested to submit tenders for the purchase of
shares!
The Defendants explicitly specified that it binds itself to accept the highest bid from the two.!
Harvela bid $2.175;!
Outerbridge bid $2.1m, or $101k of any other offer (this is called a referential bid).!
Defendants accepted Outerbridge, Harvela sued.!
Legal issues!

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Offer - Tenders!
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Argument!
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By submitting the highest bid, the Plaintiff accepted the Defendants offer and thus was entitled to
purchase the shares.!

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Judgement!
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The Defendants specification that it binds itself to accept the highest bid meant that the invitation
to submit tenders amounted to an offer.!
By submitting the highest bid, the Plaintiff accepted the offer and a unilateral contract was formed.!
Outerbridges referential bid was deemed invalid, because the specification of the invitation to
submit tenders implied no referential bids.!

4. Aotearoa International Ltd v Scancarriers A/S!

Citation(s)!
[1985] 1 NZLR 513!

Aotearoa International Ltd v Scancarriers A/S [1985] 1 NZLR 513 is a cited case in New Zealand
regarding contract formation.[1][2]!

Background[edit]!
Aotearoa Internation was in the business of paper recycling, and were looking to expand by
exporting to India, and was discussing with Scancarriers of shipping 4 shiploads of 1,000 tons
each.!
As a result of these negotiations, Scancarriers sent the following telex "FLWG OUR DISCUSSION
ON FRIDAY [...] WE AGREE TO A PROMOTIONAL RATE OF US$120 [...] AND THIS RATE WILL
BE HELD UNTIL 29/7/82 [...]."!
However, when Aotearoa delivered the first shipment of 919 tons, Scancarriers only had space to
ship some of the paper, with the remaining 271 tons being shipped on a subsequent ship.!
The split sailings caused cashflow problems for Aotearoa, leaving them unable to pay for the
shipping costs for the second shipment resulting in Sancarriers selling the paper to recoup the
shipping costs.!
Aotearoa sued for breach of contract.!

Held[edit]!
The Court ruled that the telex was merely a quote, and not an offer, as Aotearoa's manager
admitted during cross examination that the normal shipping practice was that a freight contract only
starts when the freight is delivered to the port and accepted for loading.!

5. Byrne & Co v Leon Van Tien Hoven & Co [1880] 5 CPD 344 is a leading English contract law
case on the issue of revocation in relation to the postal rule. In it Lindley J of the High Court
Common Pleas Division ruled that an offer is only revoked by direct communication with the

offeree, and that the postal rule does not apply in revocation; while simply posting a letter counts
as a valid acceptance, it does not count as valid revocation.!

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Facts[edit]!
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Van Tienhoven & Co posted a letter from their office in Cardiff to Byrne & Co in New York, offering !
1000 boxes of tinplates for sale on 1 October. Byrne and Co got the letter on 11 October. They
telegraphed acceptance on the same day. But on 8 October Van Tienhoven had sent another letter
withdrawing their offer, because tinplate prices had just risen 25%. They refused to go through with
the sale.[1]!

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Judgement[edit]!
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Lindley J held that the withdrawal of the offer was not effective until it was communicated. His
judgment stated the following.!
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There is no doubt an offer can be withdrawn before it is accepted, and it is immaterial
whether the offer is expressed to be open for acceptance for a given time or not. The offer was
posted on the 1st of October, the withdrawal was posted on the 8th, and did not reach the plaintiff
until after he had posted his letter of the 11th accepting the offer. It may be taken as now settled
that where an offer is made and accepted by letters sent through the post, the contract is
completed the moment the letter accepting the offer is posted: Harris's Case; Dunlop v Higgins,
even although it never reaches its destination. When, however, those authorities are looked at, it
will be seen that they are based upon the principle that the writer of the offer has expressly or
impliedly assented to treat an answer to him by a letter duly posted as a sufficient acceptance and
notification to himself, or, in other words, he has made the post office his agent to receive the
acceptance and notification of it. But this principle appears to me to be inapplicable to the case of
the withdrawal of an offer. In this particular case I find no authority in fact given by the plaintiffs to
the defendants to notify a withdrawal of their offer by merely posting a letter, and there is no legal
principle or decision which compels me to hold, contrary to the fact, that the letter of the 8th of
October is to be treated as communicated to the plaintiff on that day or on any day before the 20th,
when the letter reached him...!
...Before leaving this part of the case it may be as well to point out the extreme injustice and
inconvenience which any other conclusion would produce. If the defendants contention were to
prevail no person who had received an offer by post and had accepted it would know his position
until he had waited such a time as to be quite sure that a letter withdrawing the offer had not been
posted before his acceptance of it.!
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Significance[edit]!
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Revocation of an offer must be received and understood by the offeree before it comes into effect.
An acceptance by the offeree before they receive notice of the revocation will be considered valid.
[2]!

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Termination of offer!
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1. Dickinson v Dodds!
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(1876) 2 Ch D 46!
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Facts!
On 10 June Dodds offered to sell house to Dickinson, stating this offer to remain open until
9.00am on 12 June". Dickinson decided to accept on 11 June but did not advise Dodds
immediately. Later on the 11th Dickinson was informed by a third party that Dodds had sold to
someone else. Dickinson then purported to accept the offer. Dodds replied that it was too late - the
property had already been sold.!

Held!
No particular form of revocation is required. All that is required is that the offeror in some way
conveys (directly or indirectly) to the offeree that s/he had changed his or her mind about the offer.
There was no question that this had occurred here - Dickinson knew Dodds was no longer
prepared to sell before purporting to accept. The promise to keep the offer open was not binding
because it was not supported by consideration.!

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2. Byrne v. Van Tienhoven (1880) C.P.D. 344 (Link) !
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Facts: !
Oct 01, defendants (D) mailed offer to plaintiff regarding tin plates.!
Oct 08, D mailed a revocation of the offer.!
Oct 11, plaintiffs (P) received original offer and immediately telegrammed acceptance.!
Oct 15, P confirmed acceptance by mail.!
Oct 20, P received letter of revocation; P then sued D for breach of contract.!

Issue(s): !
Was a valid contract formed? Does a withdrawal of an offer have any effect before it is
communicated to the person to whom the offer was sent?!

Ratio: !
The mailbox rule does not apply to revocation; revocation sent by post does not take effect until
received by offeree. An offer cannot be revoked after it has been accepted.!

Analysis: !
An uncommunicated revocation is no revocation at all.!

Normally, acceptance occurs when the letter is delivered to the post office. However, that is
inapplicable to the withdrawal of an offer. There is no legal principle stating that revocation occurs
when the letter is posted. Therefore, the offer was accepted on Oct 11. A offer cannot be revoked
after it has been accepted.!

Holding: !
Decision in favour of the plaintiffs.!

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3. Routledge v Grant (1828)!
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In the case, Grant wrote to Routledge offering to purchase the lease of his house. The offer was to
remain open for six weeks. Grant then changed his mind about purchasing the lease and, within
the six weeks, withdrew his offer. After Routledge had received Grants letter withdrawing the offer,
he wrote back to Grant, within the six weeks, accepting Grants offer.!

The issue before the court was whether Grant could withdraw his offer within the six week period
or whether he was bound contractually given that Routledge had accepted the offer within the
timescale.!

The court held the offer could be withdrawn within the six week period without incurring any liability
if one party has six weeks to accept an offer, the other has six weeks to put an end to it. One
party cannot be bound without the other. The offeror (Grant) did not have to keep his offer for any
specific time and, as chief justice Best put it, till both parties are agreed, either has a right to be
off.!

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Lapse of Time!
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Ramsgate Victoria Hotel v Montefiore (1866)!

In this case from the Victorian era, Montefiore had made an offer to buy shares in the Ramsgate
Victoria Hotel for a particular price. The offer was accepted six months after this, and by then, the
value of the shares in the claimant company were worth much less. The offer had never been
withdrawn, but Montefiore said it was too late and would not go ahead with the sale. The claimant
went to court to obtain an order of specific performance a court order forcing the other party to
perform a binding contract. The court held the offer lapsed after a reasonable time and so the
order was not granted. In determining reasonable, the courts will look at the subject matter of the
contract (if the goods are perishable, or if there is some clear, time-sensitive element, such as the
Olympics), what normally happens in that trade and the custom and practice. Offers for sale of
shares must be quick, whereas contracts for land might be longer. - See more at: http://
www.supplymanagement.com/law/court-reports/classic-court-report-ramsgate-victoria-hotel-vmontefiore-1866#sthash.tgGKbvDp.dpuf!

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Offer subject to condition!
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In Financings Ltd v Stimson [1962] 3 All ER 386, the defendant signed an offer to buy a car on
hire-purchase terms from the plaintiff. The defendant signed a form stating the agreement would
bind only after signed by the plaintiff. After the defendant paid the first installment and took it away.
The car was returned to the dealer and cancelled the insurance due to its poor performance. The
car was stolen from dealer and damaged. Not knowing this, the plaintiffs signed the form. The
defendant refused to pay the charge and sued by plaintiff for failure to pay the installments.!

The court held the defendants offer was subject to an implied condition that the car should
continue in its undamaged state. The offer lapsed because of failure of that condition.!

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Death!
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In Fong v Cili (1968) 11FLR 495, the vendor and one of two joint purchasers of a parchel of land
signed the contract of sale, however, before the other joint purchaser signed the contract, the
vendor died. The purchaser was aware of the death of the vendor, before signing the contract.!

The court held as the purchaser was aware of the death of the vendor, the contract already lapse
and cannot be accepted.!

For the death of the offeree, in the Carter v Hyde (1923) 33CLR 115, plaintiff offered to sell a
premise to Hyde and open the offer for three months. Afterwards, Hyde died and within the three
months, Hydes executors accept the offer. Plaintiff argued that the offer is lapsed as Hydes
executors do not have the right to accept the offer.!

The court held plaintiff failed, as the option was not intended to be that was personal to Hyde, the
acceptance could be exercised by his executors. plaintiff was bound to sell.!

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Find out more from UK Essays here: http://www.lawteacher.net/free-law-essays/contract-law/offeris-a-definite-promise-or-proposal-made-by-the-offeror-contract-law-essay.php#ixzz3PwiqWfhy!

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Rejection!
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Hyde v Wrench [1840] EWHC Ch J90 is a leading English contract law case on the issue of
counter-offers and their relation to initial offers. In it Lord Langdale ruled that any counter-offer
cancels the original offer.!
Contents [hide] !
1 Facts!

Wrench offered to sell his farm in Luddenham to Hyde for 1000, an offer which Hyde declined. On
6 June 1840 Wrench wrote to Hyde's agent offering to sell the farm for 1000, stating that it was
the final offer and that he would not alter from it.[1] Hyde offered 950 in his letter by 8 June, and
after examining the offer Wrench refused to accept, and informed Hyde of this on 27 June.[2] On
the 29th Hyde agreed to buy the farm for 1000 without any additional agreement from Wrench,
and after Wrench refused to sell the farm to him he sued for breach of contract.[2]!
Judgment[edit]!
Lord Langdale's judgment read:!
Under the circumstances stated in this bill, I think there exists no valid binding contract between
the parties for the purchase of this property. The defendant offered to sell it for 1000, and if that
had been at once unconditionally accepted there would undoubtedly have been a perfect binding
contract; instead of that, the plaintiff made an offer of his own, to purchase the property for 950,
and he thereby rejected the offer previously made by the defendant. I think that it was not
afterwards competent for him to revive the proposal of the defendant, by tendering an acceptance
of it; and that, therefore, there exists no obligation of any sort between the parties.[2]!