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Offer (Agreement and contractual intention) - Coggle Diagram
Offer (Agreement and contractual intention)
Offer
The party who makes the offer is known as the
offeror
.
The party whom the offer is addressed to is known as the
offeree
The courts adopted an objective test as to the offeror's intention,words or conduct that they intended to be bound. These may be sufficient for the offer actually to be valid in law, regardless of the actual state of mind
Invitation to treat
Is a preliminary statement expressing a willingness to receive offers.
How do you
distinguish
a genuine offer or invitation to treat ?
Advertisements;
Self-service and shop-window displays;
Auctions;
Invitations to tender;
Mere statements of price
Advertisements
PARTRIDGE V CRITTENDEN
Advertisements are generally considered to be invitations to treat
However, under certain circumstances, an advertisement may be regarded as an offer.
For example when an advertisement involves a
Unilateral offer
- promise to pay in return for something/ an act
CARLILL V CARBOLIC SMOKE BALL CO
If an advertisement indicates that the advertiser promises to pay something in return for a particular course of action then the advertiser is bound
This would be a
Unilateral contract
(distinct from a bilateral contract) as there is a promise for a specific act and will only be bound if this performed.
Self- service and shop window displays
FISHER V BELL & PHARMACEUTICAL SOCIETY OF GB V BOOTS
Display of goods in a self-service shop is an invitation to treat. Shops are not compelled to sell goods at the price at which they are displayed, as the purchaser is offering the buy the item at the stated price and the shop keeper can reject this.
Auctions
In a sale at auction, the lot itself (with the request for bid) is an invitation to treat. Acceptance occurs at the fall of the hammer
BRITISH CAR AUCTIONS V WRIGHT
No car had been offered for sale
Sale of Goods Act 1979, s 57(2)
Auctions are complete when the auctioneer announces its completion by the fall of the hammer, or another customary manner. Bids can be revoked up until this point
Auctions without reserve
Where there is no minimum price that must be reached before the offer is accepted then this equates to an offer to sell to the highest bidder and is accepted by submission of the highest bid.
Invitations to tender
Normally invitations to treat: therefore, the person making the invitation to tender is not bound to accept any of the responses (offers) to the tender
SPENCER V HARDING
If the person making the tender states that he will accept the highest offer to buy goods or the lowest offer for the supply of goods, then the tender may be considered to be either an offer or an invitation to submit offers with the undertaking to accept the most favourable, concluding at the time that the best offer is communicated
HARVELA INVESTMENTS LTS
Parties issuing invitations to tender are bound to consider a tender properly submitted before any deadline.
Mere Statements of price
HARVEY V FACEY & GIBSON V MANCHESTER CITY COUNCIL
Where a party simply states the minimum price at which they are willing to sell will be an invitation to treat rather than an offer.
However, form of words used can render is sufficiently precise to be an offer capable of acceptance.
STORER V MANCHESTER CITY COUNCIL
Agreement for sale meant it was held that the form had a specific character that made it an offer rather than invitation to treat.
Communication of offers
An offer must be communicated to the offeree. This means that no party can be bound by an offer of which they are unaware
TAYLOR V LAIRD
This is the case for both unilateral and bilateral offers.
Unilateral offers
can be made to the whole world and may be accepted by anyone who had notice of the offer.
Termination of offers
How can an offer be terminated ?
Revocation;
Lapse of time;
Failure to comply with a condition precedent;
Death of one of the parties
Revocation
BYRNE v VAN TIENHOVEN
Offer may be withdrawn at any time prior to acceptance. The revocation must be communicated
DICKINSON V DODDS
Revocation by a third party is valid provided that:
the third party is reliable source of information
the third party is one of whom both parties can rely on
ERRINGTON v ERRINGTON & WOODS
Unilateral offers can be revoked. However,once performance has begun, revocation is unable to be take place
Lapse of time
An offer may that it is to terminate on a particular date or after a certain fixed period, after which it is no longer capable of being accepted
RAMSGATE v MONTEFIORE
Where not date is specified for the lapse of time then it will, in any case, lapse after a reasonable time. What is reasonable would depend on the offer and the subject matter of the contract
Death of one of the parties
Death of the offeror
Personal represenatives may still be bound provided that:
the contract does not involve the personal services of the offeror.
the offeree is ignorant of the offerors death
BRADBURY V MORGAN
Death of the offeree
Where the offeree dies before acceptance, then the offer lapses and personal representatives will be unable to accept the offer.
Failure to comply with a condition precedent
An offer may also terminate if the parties to had agreed to meet certain conditions and then failed to do so.
FINANCINGS LTD v STIMSON