Offer
Contract
an agreement between two or more parties that is binding in law
The agreement generates rights and obligations that may be enforced in the courts
Objective approach/Interpretation
It is what parties say or do which matters, not what they mean or secretly intend
Smith v Hughes
"If, whatever a man’s real intention may be, he so conducts himself that a reasonable man would believe that he was assenting to the terms proposed by the other party, and that other party upon that belief enters into the contract with him, the man thus conducting himself would be equally bound as if he had intended to agree to the other party’s terms."
Offer
Defined by Clarke J as "a clear and unambiguous statement of the terms upon which the offeror is willing to contract should the offeree decide to accept"
Invitation to treat
A statement made without intending a contract to result if the other party indicates their consent. It is simply inviting offers to be made
Cases
Classic example is an advertisment
Pharmaceutical Society of Great Britain v Boots Cash Chemists
Leftowitz v Great Minneapolis Surplus Store
Fisher v Bell
Defendant charged with offering a flick-knife for sale, displayed in shop window
Defendant was acquitted, as it was deemed an invitation to treat
Prosecutor argued that by displaying a listed poison on the selves without the presence of a registered pharmacist, was constituting an offer for sale, and that when the customer places these items in their shopping baskets they were accepting the offer
Court decided that the goods displayed were merely invitations to treat, that did not amount to an offer to sell
To hold otherwise would mean that the shop could insist that a shopper pay for goods which they had picked up and then returned to the shelf.
For in-depth reason for rule, see 2.21 of McDermott
The defendant store placed a newspaper advertisement offering to sell three furs worth $100 for $1 at 9am sharp on Saturday on a "first come first served basis". A week later the shop published a second advertisement offering two new mink scarves worth $90 for $1.
The store told the defendant that there was a house rule that the offer was intended for women only
The Supreme Court of Minnesota held that the advertisement was an offer and not an invitation to treat
"where to offer is clear, definite and explicit, and leaves nothing open for negotiation, it constitutes an offer, acceptance of which will complete the contract"
While the offeror has the right to change or modify the terms of their offer, they do not have the right after acceptance to impose new or arbitrary conditions not contained in the published offer.
Bilateral Contract
A promise by one party is exchanged for a promise by the other. The exchange of promises is enough to render them both enforceable.
Thus, in a contract for the sale of goods the buyer promises to pay the price and the seller promises to deliver the goods
Unilateral Contract
One party promises to do something in return for an act of the other party as opposed to a promise
Only one party is bound to do something
An offer can be made to the world at large and it can be accepted by anybody who performs the necessary actions
Carlill v Carbolic Smoke Ball Co
Defendants advertised that they would pay £100 to any person who purchased a smoke ball and used it as directed and contracted influenza
Ad further stated that £1000 had been deposited in Bank as evidence of sincerity
Mrs Carlill contracted influenza despite purchasing and using the product correctly, claimed she was entitled to £100
Defendants argued that the ad was too vague and mere puffery, not constituting an offer
Court said that with a unilateral offer performance constituted acceptance, and that the consideration was Carlill buying and using the product in the agreed manner
The Court concluded that as the defendant company had deposited £1,000 un the bank there was no puffery, and the plaintiff was entitled to the £100
Leonard v PepsiCo
Television ad in which several items were displayed which could be acquired if one collected a certain number of 'Pepsi Points'
"Harrier Fighter Jet $7 Million Pepsi Points"
Having acquired 15 Pepsi points, the young boy ordered the jet by adding a cheque for $700,000
Pepsi refused to supply the jet and the young boy sued for specific performance
Billings v Arnott & Co Ltd.
An example of a unilateral offer in this juristdiction
Read 2.29 of McDermott
The test of whether an advert is a binding offer is by an objective examination of what a reasonable person would have understood the advert to convey
The exception is where the advertisment is clear, definite, and explicit, and leaved nothing open for negotiation.
This advert left plenty open for negotiation
The advert specifically reserved the details of the offer into a seperate writing, the catalogue. The commercial itself made no mention of the steps needed to be taken to purchase the jet
The absence of words of limitation such as "first come first served" rendered the alleged offer sufficiently indefinite
The alleged offer was at most an invitation to treat, as no reasonable person could have believed that the ad actually offered Pepsi drinkers a fighter plane
It was a mere advertising puff