Making an Offer
Introduction to Offer and Acceptance
• A complete statement of terms on which one party is prepared to deal, made with the
intention that it be open for acceptance of the person (or persons) to whom it is
addressed.
• The offer has to be a complete statement – we need to be able to respond to the offer
with a “yes” or a “no” (e.g. acceptance). It is made with the intention that it’s open for
acceptance.
• We are using an objective test – how a reasonable person would have understood
what’s going on. We’re looking at it from our own point of view rather than asking
what’s in the mind of the parties. This is different from a civil law system (e.g. French)
where they could be more inquiry into the offer’s actual intent.
• The offer has to be open to the acceptance of the person to whom it is addressed. In
advertising, it is open to everybody, or it could be addressed to a specific persion (e.g.
selling a house).
• If the answer is “no”, then it kills the offer. If the answer is “yes”, then they accepted
the offer. If the answer is “yes but” then that kills the offer and the person who
suggested that becomes the offeror.
Distinguishing an Offer from Invitation to Treat
• An invitation to treat is an invitation to start negotiations.
• You cannot respond “yes” to an invitation to treat, further negotiations are required to
be made.
• Canadian Dyers Association v. Burton
o Burton quotes price
o Canadian Dyers tries to haggle
o The price is firm
o They accept and then Burton says no price is actually to low, I don’t want to sell
it – meanwhile, Canadian Dyers already accepted and signed.
o 1920, Ontario “Higher” Court (or Supreme Court)
o The issue: is there a contract? When Burton says my price is $1,650 and the price
is firm is that an offer? The court said it is an offer. In the wording, we know its
an offer – e.g. we know the house is being sold, we know the price. He also did
the things you do when your selling the house – e.g. had a deed, he kept the
check.
o The courts don’t care if Burton actually meant to sell in his head – they use the
objective test.
• Pharmaceutical Society of Great Britain v. Boots Cash Chemists
o The pharmaceutical society complains about this new “self service” system.
Pharmacists should supervise sales and you shouldn’t let customers pick up their
“poisons” or “dangerous drugs”.
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o If by putting the drugs on the shelf, Boots is essentially making a firm offer to
sell. When you put the item in the basket, you are accepting the offer? Or is
Boots making you an invitation to treat when putting it in the basket?
o The courts said the it is an invitation to treat and the offer/acceptance is made at
the terminal. When you put the item in the basket, you are making an offer to
buy. It is then at the terminal the pharmacist can intervene (e.g. are you taking
any other drugs, etc.). It makes sense because if you put it in a basket, it
shouldn’t be an offer/acceptance because what if you don’t have the money to
pay, what if you aren’t able to buy that much alcohol at a liquor store.
If you are at a used car store and there is a price written on the window. If you are
browsing a brochure, is that an offer? What if you are browsing amazon, is that an
offer? What if there’s a renewal offer to renew season tickets, is that an offer, or when
you email back are you making an offer to buy?
If the tables were turned and it was decided Boots actually made an offer by putting it
on the shelf, once you pick it up, can you put the item back? Not necessary, by putting it
in your basket you are effectively accepting the offer.
Offers in Advertisements
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Carlil v. Carbolic Smoke Ball Company
o There is a flu epidemic
o The CBS Company said their product would purify the air and clear influence.
They said if anybody got the flu, they could claim a 100 pound reward. To prove
that, they said they deposited 1000 pounds in a bank.
o CBS said it wasn’t an offer, it was mere puffery for advertising purposes. When a
truck pulls a house in a commercial, you don’t believe the truck could actually do
that.
o The appeals court said to look at the specificity – they said they were clear what
needs to be done to get the money (e.g. deposited money in the bank, specific
reward amount).
o There is only one way to accept this offer.
o An offer specifies the terms by which way you could accept it.
o In here, performance is the way you accept the offer. In this situation, you need
to use the smoke ball as directed then you accept the offer.
o You can have an offer that specifies one person or have an offer “open to all the
world” like this example. This example offered a unilateral contract and
performance was the way to accept the offer.
Murder Placards: Williams v. Cawardine
o This case was somebody just taking notes in court (not structured property).
o Williams Cawardine’s was killed and known on as a lusty fellow. He was found at
Marie Williams house.
o Cawardine’s brother offered a $20 reward to anyone who provides information
to lead to the murderer.
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o On August 23rd, Marie Williams turns her husband in. Marie Williams motive for
doing so is to prevent her from getting her killed…her husband used to abuse
her. It was not to get the reward money.
o The judge awarded her the money because the motive is not relevant à there
was an offer and she accepted the offer by virtue of performance.
o In a different case there was a ruling that the person didn’t accept the offer
because the offer wasn’t communicated to them. They tried to get the reward
and/or advertising after the fact.
Bilateral v. Unilateral Contracts
o In a bilateral contract, it could be binding ahead of time. For example – Gail I will
sell you my offer for $30. When Gail says okay, you have a contract.
§ Acceptance happens ahead of time and/or could be binding ahead of
time
§ Promises are “executory”
o Unilateral contract
§ Only way to accept is to perform
§ Only way to accept is when performance is complete
Summary
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Offer = A complete statement of the terms on which one party is prepared to deal,
made with the intention that it be open for acceptance of the person (or persons) to
whom it is addressed.
You need to distinguish between an offer from an invitation to treat.
o If it is not a complete statement, it is an invitation to treat.
o You need to look at the context – e.g. of the interaction, whether it is in a store.
Bilateral v. Unilateral
o In advertising, we were looking at the difference between bilateral and unilateral
offers. In unilateral contracts, the only way to accept is to perform and that
performance has to be complete.