OFFER AND ACCEPTANCE
2
CH. I
CANADIAN DYERS ASSOCIATION LIMITED v. BURTON
(1920), 47 O.L.R. 259 (H.C.)
MIDDLETON J. The question argued was whether, upon the correspondence
discussed, a contract had been made out.
There can be no doubt of the elementary principle that there can be no contract of
sale unless there can be found an offer to sell and an acceptance of the offer or an
offer to purchase and an acceptance of that offer. A mere quotation of price does not
constitute an offer to sell to the person to whom the quotation is addressed. It is no
more than an invitation to him to make an offer to buy at that price or any price he
may see fit to offer,calling for an acceptance on the part of the vendor before there is
a completed contract.
In each case of this type it is a question to be detennined upon the language used,
in the light of the circumstances in which it is used, whether what is said by the
vendor is a mere quotation of price or in truth an offer to sell.
Harvey v. Facey, [18931 A.C. 552, does not determine any new law, but is an
illustration of the application of theprinciple involved. The would-be purchasers sent
a telegram in which they asked two questions: “Will you sell us B .H.P.? Telegraph
lowest cash price.” The reply was: “Lowest cash price for B.H.P. £900.” Assuming this to be an offer, the plaintiffs wired acceptance. Their Lordships held that there
was no contract. The defendant “replied to the second question only, and gives his
lowest price
the appellants treat the answer
stating his lowest price as an
unconditional offer to sell to them at the price named” (p. 555). In the view of their
Lordships, an affirmative answer to the first question was not implied, and the
defendant had made no offer to sell, but stated only his price. If the decision does
more than illustrate the undoubted principle, it may be taken as establishing that “the
mere statement of the lowest price at which the vendor would sell contains no implied
contract to sell at that price to the persons making the inquiry” (p. 556).
The true principle is well stated in 35 Cyc., p. 50, citing American cases: “The
question is one of intention; and whether a proposal is to be construed asan invitation
to deal or as an offer which can be turned into a binding agreement by acceptance
depends upon the language used and the circumstances of the particular case.”
In Johnston v. Rogers (1899), 30 O.R. 150, the vendors sent a circular letter:
“We quote you,” etc. This was held not to be an offer to sell, but a mere invitation to
make an offer to purchase.
In Harty v. Gooderham (1871), 31 U.C .R. 18, a quotation of prices, followed by
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OFFER AND INVITATION TO TREAT
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the statement, “Shall be happy to have an order from you, to which we will give
prompt attention,” was held to be an offer which became a contract upon the
plaintiffs’ acceptance.
Attempting now to apply this law to the case in hand, we find that in May, 1918,
the plaintiffs wrote the defendant: “With reference to purchasing this property (25
Hanna avenue), kindly state your lowest price~We will then give the same our best
consideration.”
On the 6th June, the defendant answered: “Re house 25 Hanna. The lowest price
I would care to sell at for cash would be $1,650, as anything less would not bring me
in as good a return on my money as my present rental. I would have sold before, but,
being a director of the company then, I did not, for obvious reasons. This is the last
link between me and my old associations.”
This can be understood better when it is known that the house in question is next
door to the factory of the plaintiffs, and that the defendant had been a director of the
company.
Matters then stood for a year and a half, when the plaintiffs wrote, on the 16th
October, 1919: “We would be pleased to have your very lowest price for 25 Hanna
avenue. Perhaps we could get closer together than the last figure given us.”
On the 21St October the defendant wrote: “I beg to acknowledge receipt of your
favour of the 16th instant, and in reply would say that the last price I gave you is the
lowest I am prepared to accept. In fact I feel that under present conditions that this is
exceptionally low and if it were to any other party I would ask more.”
This was treated as an offer and (subject to a question to be mentioned) accepted.
A cheque for $500 was sent, and the defendant was asked to have a deed prepared.
This was on the 23rd October. On the 27th, the defendant’s solicitor sent a draft deed
and said he would be ready to close on the 1st. Some correspondence took place
about the deed and title, but no trouble developed until the 5th November, when the
defendant’s solicitor wrote that there was no contract, and returned the cheque for
$500.
It might suffice to say that, in my opinion, there was here far more than a mere
quotation of price. Read in connection with the earlier letters of 1918, the letter of the
16th October, 1919, was in effect a request for a price at which the defendant was
willing to sell to the plaintiffs, and the reply of the 21st, the vital matter, was more
than a quotation of price, and was a statement of readiness to sell to the plaintiffs at
the price already named. I attach importance to the words, “the price
is the
lowest I am prepared to accept
if it were to any other party I would ask more”.
Surely, unless language is used to conceal thought, this is an offer.
In the other cases that I have read, the conduct of the defendant has been
consistent with his view that an offer has not been made. He has at once disavowed
the idea of a contract without further action on his part. If the language here is
ambiguous, then it is fair to see how the defendant himself viewed the situation.
When the letter of the 23rd reached him, he did not say: “There is no contract. Your
letter is an offer which I do not accept;” but he submits a deed and suggests an
immediate search of his title, and names an early date for closing—in the meantime
retaining the cheque sent. His actions show that he regardedhis letter as an offer and
the letter of the 23rd as making a contract.
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