Chapter 39 - Offer and Invitation to treat Flashcards
What is an invitation to treat?
An indication that one person is willing to negotiate a contract with another, but that they are not yet willing to make a legal offer.
Describe the difference between offer and an invitation to treat
-Invitation to treat is not an offer
-words used such as ‘may be able to’ or ‘might be prepared to’ can be looked at to decide whether it is an offer or invitation.
-Gibson v Manchester City Council - Not an offer as council used words ‘may be prepared to’
Examples of invitations to treat
-Advertisements cannot be an offer, only invitation to treat, Partridge v Crittenden
-Goods in a shop window - shop has no obligation to sell to the customer, Fisher v Bell
-Goods at an auction - Each lot is an invitation to treat; offer is made by the bidder, Pharmaceutical society of Great Britain v Boots Cash Chemists
-Request information and a reply to the request - Harvey v Facey
Bilateral and unilateral contract
Bilateral contract - This contract requires both offeror and offeree to do something. Both parties have obligations
Unilateral contract - There is an agreement to pay in exchange for performance, if the potential performer chooses to act. There is no obligation to perform the act. Carlill v Carbolic Smoke Ball Co.
Who can make the offer?
-Offer can be made by an individual, partnership, limited company or other organisation.
-Also can be made through a notice or machine, Thornton v Shoe Lane Parking
To whom can the offer be made to?
-A named individual, Gibson v Manchester City Council
-A group of people
-The world at large, Carlill v Carbolic Smoke Ball Co.
How to communicate an offer?
-Offer comes into existence when it is communicated to the offeree
-Communication requires the offeree to know of the existence of the offer, Taylor v Laird
-Exact timing can be critical, Stevenson v McLean
How can an offer end?
-Revocation - Routledge v Grant
-Rejection - Can say No or Make a counter offer as seen in Hyde v Wrench
-Lapse of time- Ramsgate Victoria Hotel v Montefire
-Death
-Acceptance
How to accept an offer
Can be accepted by any effective form of communication
-Cannot be by silence, Felthouse v Bindley
-Can be required to accept in a specific way, Yates v Pulleyn
-Requirement of signature can cause issues where negotiations are conducted electronically, Neocleous v Rees
-Issues with phone calls as lack of evidence, Wells v Devani
Intention to create legal relations
The parties to a contract expressly or impliedly agree that the contract is legally binding and therefore enforceable in court
Social and Domestic Arrangements
These are presumed not to be legally binding, but the presumption can be rebutted.
-Balfour v Balfour - Decided to be domestic as agreement was made under different circumstances to current
-Merritt v Merritt- Where husband and wife are already separated, an agreement may be taken as intended to be legally binding
-Court can examine the real purpose of an arrangement- Jones v Padavatton
-If money changed hands, more of a business arrangement and therefore legally binding, Simpkin’s v Pays
-If parties put financial security at risk for an agreement then it must have been intended as legally binding, Parker v Clarke
Commercial agreements
Commercial agreements are presumed to be legally binding
-“gentlmens agreement” is enough for a legally binding agreement to be rebutted, Jones v Vernons Pools
-Burden of proof in a business situation is on the person seeking to establish there is no legal intention- Edwards v Skyways Ltd
