DEFINITION OF OFFER
“An expression of willingness to contract on
certain terms, made with the intention that it
shall become binding as soon as it is accepted
by the person to whom it is addressed.”
Treitel
(1) CAN BE MADE TO THE WORLD AT LARGE
Carlill v Carbolic Smoke Ball Company [1893]
CSB made a product that they claimed would keep the
flu away from anyone who took it. They published it in
the papers claiming that anyone who got the flu after
taking it would be rewarded with £100.
Mrs. Carlill claimed that she got the flu, but CSB refused
to pay, so she sued for breach of contract.
Ruling: Usually, acceptance must be communicated, but
one who makes a unilateral offer for the sale of goods by
means of an advertisement impliedly waives notification
of acceptance if his purpose is to sell as much product
as possible
(2) OFFER MUST BE COMMUNICATED…
Powell v Lee (1908):
P applied for job and received informal acceptance from
a board member. After the board changed its mind, P
sued the school.
R v Clarke (1927)
Reward "for such information as shall lead to the arrest
and conviction of the person or persons who committed
the murders“
Held: Necessary to act in "reliance on" an offer in order
to accept it
OFFER MUST BE COMMUNICATED
Bloom v American Swiss Watch Co. (1915)

The claimant gave evidence to the authorities
which led to the arrest of some jewel thieves. He
then discovered that the defendant had previously
advertised a reward for such information. The
defendant refused payment.

Held: the defendant was not legally obliged to pay
as no contract to do so existed between the
parties, since the offer of the reward had not been
communicated to the claimant prior to his giving
the information
MOTIVE IS IRRELEVANT



Williams v Carwardine (1833)
Mrs. Carwardine’s husband was murdered, so she
offered a reward of £20 for whomever would give
information that would lead to the arrest and
conviction of the murderers. Mrs. Williams knew about
the reward, but did not say anything about her
husband being the murderer until he savagely beat
her.
Mrs. C refused to pay, stating that Mrs. W’s reason for
giving evidence was not for the reward, but for revenge
(3) MUST BE CERTAIN
A vague offer cannot be accepted
Loftus v Roberts (1902) – “salary to be
arranged”
Scammel v Ousten (1941) – no certainty as
to the terms of the agreement
AGREEMENT TO MAKE AGREEEMENT
An agreement to make an agreement or an
agreement to negotioate at a later date will not
constitute a valid contract. It will be void ab
initio (void from the beginning/never existed):
Walford v Miles (1992)
Gibson v Manchester City Council (1979)
INVITATION TO TREAT
Invitation to treat - invitation for others to make
an offer
Public Advertisements – Partidge v Crittenden
(1968)
 Goods in a shop window – Fisher v Bell (1961)
 Goods on a shelf – Timothy v Simpson (1834)

TERMINATION OF OFFERS
•
Offer can be withdrawn at any time before
acceptance, but it MUST be communicated to the
offeree before acceptance
•
Byrne v Van Tienhoven (1880)
•
1st October – V posted letter offering goods for sale
8th October – V revoked the offer, which arrived on 20th
Oct.
11th October – B accepted offer
15 October – B posted letter confirming acceptance
•
•
•
AUCTIONS


Payne v Cave (1789) – auction is invitation to treat until
hammer goes down
Buyers & Auctioneers

Warlow v Harrison (1859) – Owner made highest bid to “win”
auction to prevent underselling. There was a breach of contract
between auctioneer and highest bona fide bidder, therefore the
plaintiff has the right of action against the auctioneer.

Barry v Davies [2000] – A “without reserve” auction cannot be
cancelled because of low bid
Buyers & Sellers

Highest Offer Gets It
McGowan & Co. v Gomes [1891-93] L.R.B.G. 171
Facts:
A merchant’s stock was offered for sale in an
advertisement headed “highest offer gets it” and in which tenders
were invited. The Plaintiff made a tender; the defendants refused
to sell at the price tendered, there being only one tender.
Held:
The advertisement constituted an offer to sell, and
there being no condition in the advertisement that there should
be more than one offer, the plaintiff’s tender was an acceptance
which bound the defendant.
EXCEPTIONS TO THE REVOCATION
RULE
Situations where the revocation of an offer
does not need to be communicated to the
offeree
1.Where
2.Where
offers are made to the world at large
communication does not occur
because of the offeree’s conduct; e.g.,
changing address or receiving mail but not
reading it
ACCEPTANCE
An acceptance is a final and unqualified assent to
the terms of an offer
Acceptance Rules
1. Acceptance must be unconditional
2.
A counter-offer is not an acceptance
3.
Acceptance must be communicated
MIRROR IMAGE RULE


Prohibits an offeree from changing the terms of that
offer
Counter-Offer negates initial offer
Hyde v Wrench (1840)
W offered to sell a farm to H for 1000. H offered to pay
950, but W rejected the offer. H then agreed to pay
the 1000, but W refused to sell him the farm
Stevenson, Jaques, & Co. v McLean [1880]
However, a request for more information is not a
counter-offer.
STATEMENT OF INTENTION
Cannot form basis of contract even though party to whom
made may have acted upon it.
Re Fickus (1900)
Supply of information cannot amount to an offer
Harvey v Facey (1893)
H: "Will you sell us Bumper Hall Pen? Telegraph lowest cash
price-answer paid;"
F: "Lowest price for Bumper Hall Pen £900."
H:"We agree to buy Bumper Hall Pen for the sum of nine
hundred pounds asked by you.
CONDITIONAL ACCEPTANCE
"Frequently an offeree, while making a positive
acceptance of the offer, also makes a request or
suggestion that some addition or modification be made.
So long as it is clear that the meaning of the acceptance
is positively and unequivocally to accept the offer
whether such request is granted or not, a contract is
formed."
Masters
v Cameron (1954) [Australian] – Initial
judgment suggested a contract, but was reversed on
appeal.
Ardente v Horan (1976) [American]
ACCEPTANCE MUST BE COMMUNICATED (1)
1.
Acceptance must be according to method
unless it does not disadvantage offerer and
gets there in the same amount of time as the
prescribed method – Yates v Pulleyn (1975):
Ordinary post instead of recorded
2.
Silence is not acceptance
ACCEPTANCE MUST BE COMMUNICATED (2)

Silence is not acceptance – Felthouse v Bindley
(1862): “If I hear no more from him, I consider
the horse mine…”
RECEIPT RULE
Acceptance must actually be communicated:
“receipt rule” – Adams v Lindsell (1818)
2nd September – Offer letter to sell goods
asking for “reply in the post”
 5th September – Offer received and
acceptance sent
 9th September – Acceptance received, but
goods were sold on the 8th

Courts: Binding contract
POSTAL RULE
Effective communication of acceptance by letter,
is on posting… until
Entores Ltd. v Miles Far East Corp. [1955]
The contract is only complete when the
acceptance is received by the offeror.