DOCUMENT 2 PHARPHRASING / SUMMARISING
As preparation for your assignment, you need practise at paraphrasing and or
summarising what the judges say in their case decisions.
http://www.planetpapers.com/Assets/4730.php Granger v. Gough [invitation to treat v. offer]
Written by: J Murdoch
Justice Murdoch
1.
"The transmission of such a price-list does not amount to
an offer to supply an unlimited quantity of the wine
described at the price named, so that as soon as an order
is given there is a binding contract to supply that
quantity. If it were so, the merchant might find himself
involved in any number of contractual obligations to
supply wine of a particular description which he would be
quite unable to carry out, his stock of wine of that
description being necessarily limited. I entertain, I
confess, a very clear opinion that the Solicitor-General
was quite right in arguing the case on the assumption
that no sales were made in this country." Lord Herschell
Paraphrased or summarised version
Try to paraphrase Lord Herschell:
(Justice Murdoch is quoting Lord Herschell)
2.
Just over one hundred years ago the above ratio-descendi
was given in what was at the time a case concerned with
alleged back taxes owed by Grainger & Son.
What was the legal issue?
3.
Grainger & Son (henceforth referred to as G&S) were
British wine merchants who as a side venture passed on
the price lists of a French wine producer to their
customers. G&S received a commission on any orders
placed with said producer and paid tax on this
commission.
What are the facts of the case?
4.
Gough claimed that tax was payable on the whole value
of these sales not just the commission element. Monsieur
Roederer (henceforth Mr R) was a wine producer located
in France. He decided whether to accept the orders
gathered by G&S or not. ……… The wine was shipped
directly to the customer in the UK from France. Most
customers settled their accounts directly with Mr R.
What legal argument did Gogh put forward?
5.
G&S maintained that they entered no contracts regarding
Mr R’s wine. Gough held the converse view that G&S
entered contracts themselves and thus sold Mr R’s wine.
What were the opposing legal positions taken by the
plaintiff and defendants?
6.
Our starting point must be to define what a contract
under English law is.
…To form a contract under English law the following
elements are required (i) a valid offer has been
Summarise this information :
proffered by the first party to another party or parties
(ii) the offer has been accepted unchanged by the
second party or parties and this has been
communicated to the offerer . (iii) there is an
intention by all parties to create legal relations when
they entered into the contract and the parties have
the capacity to contract (iv) the promises made
within the contract are for valuable executive
consideration and (v) the terms of the contract are
certain.
7.
Did Mr R make an offer through the medium of his price
list? Looking in Mozley and Whiteley's Law dictionary an
offer is "An expression of readiness to do something (e.g.
to purchase or sell)". Mr R is saying that he is willing to
sell wine. Based on this definition initial opinion would say
that the price list does constitute an offer. Continuing with
this line of thought G&S acted in an agency capacity for
Mr R making an offer to the customers they approached
and receiving the acceptance of any order.
8.
If the customers accepted G&S’s offer made via the
medium of the price list then Mr R merely shipped directly
from France. The bills for said wine were sent to G&S who
would then forward them on to the British customer.
These points all suggest that the sale was made in the UK
by G&S. The listing of Mr R, in the Post Office London
Directory, as trading from G&S’s establishment further
hints at an agency type arrangement.
9.
Much of the argument supporting the invitation to treat
viewpoint is by drawing analogies with cases involving
auctions such as Payne v. Cave (1789) and Harris v.
Nickerson (1873) in which both concluded that bidders
make an offer which the auctioneer is free to accept or
not. The bidder’s offer being retractable until accepted by
the auctioneer. The pricelist could be seen as statement
of the minimum price at which Mr R would be willing to
sell wine drawing analogies with Harvey v Facey (1893).
10. Mr R’s supply of wine in any year is finite and demand
could outstrip supply leaving an impossible backlog of
orders all demanding specific performance. Mr R could
possibly, though extremely doubtfully, claim the defence
of frustration as the things contracted for no longer exist.
Add to this Mr R’s option to reject any order makes it
appear that his price list is an invitation to treat as
otherwise it would be an offer that is subject to
revocation without notice. Acceptance of an offer has to
be communicated. At the time of this case, 1896, the only
readily available methods of communication for distant
parties were the postal system or telegram. The postal
rule would apply to any customer’s acceptance sent via
these mediums and hence any revocation of the offer
would be impossible
Outline the arguments in this paragraph and
paragraph 8. Do these arguments support G&S or
Gough?
How do the arguments in this paragraph & paragraph
10 help G&S?
11. Granger v. Gough was one of the major cases in the
creation of the principle of invitation to treat. In order to
explore this principle more fully the case will be reexamined as it occurred today.
12. Once again the starting point is was the price list an offer
or merely a willingness to deal. There are a number of
variants on an invitation to treat these are: precontractional negotiations, shop displays and finally
advertisements. G&S’s supply of the price list to potential
customers is a form of direct marketing and falls under
the last of these three categories.
What was the outcome of Granger v Gough?
13. In a face to face situation such as a shop the customer
offers to buy goods by presenting them at the till and the
shop either accepts or rejects this offer to buy. The goods
on the shelves are merely invitations to treat in keeping
with the findings of Pharmaceutical Society of GB v. Boots
Cash Chemists
What did Pharmaceutical Society of GB v Boots Cash
Chemists establish?
14. A key point in the original Graniger v. Gough was where
was the contract made. Today the location of the act of
contracting can be different depending on the mode of
acceptance. The postal rule puts acceptance at the place
of posting.
What is the postal rule?
15. Where both parties use a telex or nowadays facsimile
machine the Court of Appeal decided in the case of
Entores Ltd v. Miles Far East Corporation (1955) that the
contract was entered into when and where the
acceptance was received. Lord Denning confirmed, obiter
that the same principles also apply to acceptances by
telephone. ……
What is the rule concerning telex/fax?
16 The point in time at which an email acceptance will be
effective is yet to be considered by the Australian courts.
Several commentators have expressed the view that email
should be treated as another form of instantaneous
communication requiring acceptance to be communicated to
be effective.
17 If Mr R had a website that could receive customer orders
would it be an invitation to treat or an electronic contracting
agent? A non-interactive site just listing his wines would most
certainly be classed as an advert. But what about an
interactive site where customers place orders online? This
question is under consideration by many of the worlds legal
minds
What sorts of things are invitations to treat?
What about email?
What about a non-interactive web site? What about
an interactive web site?
Now answer the following questions:
1. The opening words written by Lord Herschell is the ratio decidendi of the case Grainger v
Gough. (Paragraph 1)
(a) What is the legal definition for ratio descendi?
(b) What is the legal term for the other statements made by judges in their decisions?
(c) What comes from the ratio?
2. Gough wanted Grainger & Son to pay tax on the full sale of the wine because he argued
that their wine list amounted to an offer and when the British customers placed an order
with them the customers were accepting the offers found on the wine list. List the
evidence argued by Gough to support this view? (Paragraphs 6-8)
3. Grainger & Son argued that their wine list was an invitation to treat, not an offer. What
legal arguments were used to support this view? (Paragraphs 9&10)
4. In this precedent case, what did their Lordships decide? ( ie was the wine list an offer or
an invitation to treat?) (Paragraph 11)
5. Read Lord Herschell’s ratio again.
a. What commonsense reason did he have for saying the list was an invitation to
treat?
b. To what extent was this a good legal decision?
6. The article says there are 3 types of invitations to treat. What are they? (Paragraph 12)
a. What is the precedent case for finding that goods on a shelf are invitations to
treat, not offers? (Paragraph 13)
7. What was key point in Grainger v Gough? (Paragraph 14)
8. In the time of Grainger V Gough, communication was limited to the postal service.
Explain the Postal rule.
As modern technology has changed the way acceptances can be made, what has the law
said about when acceptance is made for:
a. Faxes, telex and telephone? (Paragraph 15)
b. What is the situation for email?(Paragraph 16)
c. What is the legal situation for web pages? (Paragraph 17)