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Business Law - the law of contract - Case Study Example

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James notices a gold watch with a price tag of 25 in a shop window of a store. When he walked into the store, he was attended by Elizabeth, the store person when he offered to make payment for the gold watch. Elizabeth came back shortly and announced to James that they would not sell the gold watch at 25 for they had made a mistake with the price…
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Business Law - the law of contract
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Download file to see previous pages The prospective buyer, by offering that price is himself the offeror and his offer, if accepted, create a binding contract. 1
For this case, James just noticed a gold watch with a price tag of 25 hence it neither does nor compels the store person to sell the gold watch at that particular price. The price tag with the gold watch was just inviting others to make an offer of their own on how much they are to buy the watch. A binding contract would have been created when the store person (Elizabeth) would have accepted the offer made by James since the price with the gold watch was just inviting customers to make their offer.
Normally, invitation to a treat is used to request expression of interest from the customers. For this case, any product with a price tag does not compel the store person to sell his product at that price but requests, an expression of interest from the customer to make their offer and binding contract of sale would occur when he agrees to sell at that price. 2
Invitation to treat must be distinguished from an offer. This is because, invitation to a treat invites for people with to make on an offer whereas, in a offer, the offeror make in an offer and just wait for people to accept that offer.
In order for a coIn order for a contract to be enforceable, it must fulfill certain basic requirements. There must be an agreement based upon genuine consent of the parties, supported by a consideration and made for a lawful object between competent parties.
A relevant case studied in the issue of invitation to treat is that of:
Pharmaceutical Society of Britain v. Boots Chemists of 1953
Goods were sold in Boots Chemist shop under the self-service system.
Customers selected their purchases from the shelves, put them
into baskets supplied by Boots Chemists and took them to the cash
desk where they paid the price. It was held that the customer made
the offer when he presented them at the cash desk, and not when he
removed them from the shelves.3
The price tag with the gold watch was merely inviting James to make his offer on the price he would like to buy the gold watch at and does not compel him to sell at that price. For this case, a contract would have been made when James collects the watch from the shelves and place it on the counter if Elizabeth agrees to sell it at that price. But since the 25 price with the gold watch was merely inviting customers to make an offer but not sell it at that price. By taking the money from James, it would mean that Elizabeth had agreed to sell the gold watch at that price. For this case, it would be immaterial for James to state that he has a right to purchase a gold watch at 25 as indicated on the price tag. He would not succeed in any court of law for him to be sold the gold watch at 25.
Another case studied on invitation to treat was that of:-
Fisher v. Bell of 1961
On this case, Bell a shopkeeper, displayed a flick knife priced at
four shilling in his shop window. He was charged with offering
for sale an offensive weapon contrary to the restriction of offensive
weapon act. It was held that a mere display of the goods in a shop
window is not by itself an offer for sale. Bell was not bound to sell
the knife to any one entering his shop and offering to him four
shillings. 4
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