A Legal Offer or an Invitation - Assignment Example

It can be very difficult for a non-lawyer to be able to distinguish a legal offer from an invitation to treat. Discuss by reference to decided cases.In law a legal offer can be distinguished from an invitation to treat by the fact that an invitation to treat is not regarded as a binding contract. In many cases an invitation to treat will precede a formal offer. This is deemed to be the case when considering items advertised for sale in a shop window or a brochure. Displays inside a shop are regarded as invitations to treat and this does not convert into an offer until the customer selects the item and takes it to the till to purchase it. In doing this the customer is offering to buy the selected item. At this point the shop owner can still refuse to sell the item; however, as the purpose of the business is to sell goods it would be rare for a shop keeper to state that the item was not for sale. The courts will not treat an invitation to treat as a binding contract since it is generally regarded by the courts that the invited person is the person who will make the offer. A distinction can be made between an offer and an invitation to treat by examining the intention of the party. This can be inferred through the words or actions of the parties. The court will infer that an offer is complete if they determine from examining the actions of the party that the offer was made with the intention of binding the parties as soon as the offeree accepts the offer. In some cases the wording is unclear and the courts have had difficulty determining whether the words used constitute an offer or an invitation to treat. For this reason the court will also consider the actions of the parties in relation to the offer. When determining the validity of an offer the court will look for evidence to show that the offeror has made a definite promise to the offeree. The contact becomes complete once the offeree communicates their intention to accept the offer that has been made. One of the often quoted cases in relation to the distinction between an invitation to treat and an offer is the case of Carlill v Carbolic Smoke Ball Company [1893]1. In this case the respondent had placed an advert in a newspaper offering a reward of £100 to anyone that used the smoke ball and still contracted flu. Several people purchased the product on the strength of this promise. When the plaintiff contracted flu despite using the smoke ball in the prescribed manner she attempted to claim the promised reward. The respondent attempted to persuade the court that the advert should be regarded as a invitation to treat and should not be treated as a binding contract. After much deliberation the court found in favour of the plaintiff, stating that it was clear from the wording of the advert that the respondent had made an offer and that acceptance had occurred when the plaintiff purchased the item. One area where the courts have sometimes struggled with determining when an offer can be deemed to have occurred is with auctions. This issue was addressed in the case of Payne v Cave (1789)2 where the court stated that the auction itself is an invitation to persons present to bid on the items for sale. The court stated that the bids constituted an offer and that the fall of the hammer by the auctioneer signified acceptance of that offer. In order for the bidder or the auctioneer to avoid being bound by the contract the bidder must withdraw their offer or the auctioneer must withdraw the goods from sale. In Warlow v Harrison (1859)3 the plaintiff was seeking action against the auctioneer for the price accepted for the auctioned item. In this case there was no reserve price on the item. The court did, however, hold the respondent liable as, in their opinion; he had not fulfilled his duty to the plaintiff by not accepting the highest bid. In the case of Harris v Nickerson (1873)4 the court held that the respondent was not liable for the loss of money of the plaintiff. In this case the respondent had advertised the forthcoming auction in the newspaper. The respondent read the advert and decided to attend. The auction was cancelled and the plaintiff attempted to claim for the money lost in travelling to the auction. The court rejected this claim stating that to allow such a claim would ‘make a mere declaration of intention a binding contract’. The courts have often been asked to determine whether an advert in a newspaper, catalogue or brochure constitutes an invitation to treat or an offer. This was tested in the case of Partridge v Crittenden [1968]5 in which the respondent was offering birds for sale. The court considered the advert and reached the conclusion that it should rightly be regarded as an invitation to treat. The court stated that a response to the advert would constitute an offer which would be held to be a binding contract if the respondent accepted the offer made by the plaintiff. In this case Lord Parker said I think that when one is dealing with advertisements and circulars, unless they indeed come from manufacturers, there is business sense in their being construed as invitations to treat and not offers for sale. Similar questions have been raised in relation to goods displayed in a shop. In Pharmaceutical Society of G.B. v. Boots [1953]6 counsel in this case suggested that If a man advertises goods at a certain price, I have a right to go into his shop and demand the article at the price marked In response Lord Parker stated that No; if you do, he has a right to turn you out. In the verdict handed down by the court in this case it was held that exposing goods to the general public amounts to an invitation to treat and that the offer occurs when the customer takes the item to the till. Until the cashier accepts the money the offer is not complete and the shop keeper has the right to refuse to accept the offer made by the customer. The finding in this case assisted the respondent in the case of Fisher and Bell (1961)7. In this case a police officer attempted to bring charges against the shop owner under the Restriction of Offensive Weapons Act, 1959. Using the decision handed down in the above case the court held that the display in the shop window only amounted to an invitation to treat and that as the shop keeper was entitled to reject the offer to buy the item he could not be held liable under the 1959 Act unless he was actually shown to be selling the item in contravention of this Act. Complications can arise with offers as was demonstrated in the case of Harvey v. Facey [1893]8. In this case the court had to determine whether the enquiry by telegram as to whether the respondent would accept a certain price for the item constituted an offer. The court held in this case that a price quotation did not amount to an offer and should be regarded as an invitation to treat9. The court also reached a similar finding in Clifton v. Palumbo [1944]10 in which the court stated that it was obvious from the dealings between the parties that they were attempting to negotiate a deal with a view to the sale of the estate. The court held that until an acceptable offer had been made and accepted by the parties that the negotiations amounted to nothing more than an invitation to treat. From all of the above it can be concluded that the court will only determine that an offer has been made if there is clear evidence that the person making the offer intended to be bound by that offer. The courts have consistently overruled claims that a valid offer has been made in situations where the seller is merely inviting the buyer to make an offer to purchase the item. The whole principle of an invitation to treat can prove to be problematic for anyone that has no legal knowledge and many such persons are often under the mistaken belief that items advertised for sale should be regarded as offers. Bibliography Beale, HD, Bishop, WD, Furmston, MP, Contract Cases and Materials, 3rd Ed, 1995, Butterworths Bixby M.B., Beck-Dudley C., Cihon P.J. The Legal Environment of Business, (2002). Civil Procedure Volume 1 2002, Sweet & Maxwell Civil Procedure Volume 2, The White Book Service, 2002, Sweet and Maxwell Dignam, Alan J., “Company Law”, 4th ed. / Alan Dignam, John Lowry, Oxford Oxford University Press, 2006 Goode, R M, “Commercial law ”, 3rd Edition, London, Penguin 2004. Harvey, b & Marston , J . Cases & Commentary on Tort, 1998, 3rd Ed, Pitman Publishing Keenan, D and Riches, S, Business Law, 7th Ed, 2005, Longman Mozeley & Whiteley’s, Law Dictionary, 1993, 11th Ed, Butterworths Rose, FD, Statutes on Contract, Tort & Restitution, 10th Ed, 2000, Blackstone’s Treitel, G H. Law of Contract, 1999, 10th Ed, Sweet & Maxwell Canadian Dyers Assn’n Ltd. v Burton (1920) 47 O.L.R. 259 Carlill v. Carbolic Smoke Ball Company [1893] 1 QB 256; [1892] EWCA Civ 1 Clifton v Palumbo [1944] 2 All E.R. 497 Fisher v Bell [1961] 1 Q.B. 394, [1960] 3 All E.R. 731 Harris v Nickerson (1873) L.R. 8 Q.B. 286 Harvey v Facey [1893] A.C. 552 Partridge v Crittenden [1968] 2 All ER 421, [1968] 1 WLR 1204, 132 JP 367 Payne v. Cave (1789) 3 T.R. 148, 100 E.R. 502 Pharmaceutical Society of G.B. v Boots [1953] 1 Q.B. 401 (C.A.); Warlow v Harrison (1859) 1 El. & El. 309, 120 E.R. 925 Read More