Advertisement Cases: Invitation to Treat or Offer to Sell?

On the 29th October, 2010 Steven advertised in the NewFocus Paper, “Yamaha Piano latest model, excellent condition, RM15,000, interested please call 016-1234567″. An advertisement can either be an offer or an invitation to treat.

However, it will be based on intention of parties. Steven was just invite people with statements placed in newspaper. Moreover, he only sells one piano because of limited stock and this indicates he is not a distributor of pianos and therefore no promise existed. Therefore, it is considered an invitation to treat as mentioned in the case Partridge v Crittenden [1968] 2 All ER 421, HC QBD.

The case is that “the appellant placed an advertisement in a magazine: “Bramblefinch cocks and hens, 25s. [25 shillings = £1.25] each”. He was charged with offering for sale a wild bird, contrary to statute, but the High Court said he must be acquitted. The advertisement was an invitation to treat, not an offer to sell; with limited stock the advertiser could not reasonably intend to be bound to sell to all those who might accept. (If the advertiser indicated that he was willing to sell only to the first person accepting, there would be no such problem.)”

Another case that is associated with invitation to treat is the Pharmaceutical Society v Boots [1953] 1 All ER 482, CA. The case states that a display of goods in a shop window, or on the shelves of a self-service shop, is generally regarded as an invitation to treat rather than as an offer to sell. The case happened as “certain products that were to be sold only under the supervision of a registered pharmacist were displayed on shelves in a self-service shop. The Pharmaceutical Society of Great Britain (who are responsible for enforcing this legislation) brought a prosecution against the shop for allowing customers to buy these products by helping themselves, but the Court of Appeal said they had no case. The customer having selected the goods made an offer to purchase when he took them to the cash desk, and there was a registered pharmacist supervising that point at which the sale took place.”

On the other hand, this case would not be the same if it was an offer. An offer is made when one party makes it clear, by words or actions, that he is prepared to be bound as soon as the offer is accepted by the person to whom it is made. An offer is thus quite different from an invitation to treat, though it is not always easy to distinguish the two.

This is as in the case of Carlill v Carbolic Smoke Ball Co [1893] 1 QB 256, CA. “The makers DD of a health product published newspaper advertisements promising to pay £100 to anyone who contracted flu after buying one of their smoke balls and using it as directed. The advertisement also said DD had deposited £1000 in a named bank to show their sincerity in this matter. P bought a smoke ball, used it as directed, and still caught flu; she sued for the £100 promised. The Court of Appeal said the advertisement in this case was an offer; the wording of the advertisement clearly showed an intention to be bound to anyone accepting.”

It can be concluded from this case that the advertisements made are considered an invitation to treat because Steven makes an offer to the public for his piano with the price RM15000.

On the 1st November 2010, Tanny offered RM10,000 to buy the piano and this would be considered an offer. Steven invited Tanny to see the piano. It does not mean that Steven is accepting the offer but it was just a mere invitation. Steven said “I will not sell it below RM14,000 and I will not sell it to anyone else before 7th November 2010.” The new price offered is considered counter-offer.A counter-offer is not an acceptance, and actually kills the original offer. This can be seen through the case Hyde v Wrench (1840) 49 ER 132, Lord Langdale MR where “D wrote to P offering to sell his farm for £1000. P immediately responded with an offer of £950, which D took time to consider. After a fortnight, D said he was not prepared to accept the lower offer, whereupon P purported to accept D’s original offer and brought an action for specific performance. In the Rolls Court, the judge said there was no contract: by making his own offer P impliedly rejected the offer made by D and could not subsequently revive and accept it.”Whereas there was time frame set as the condition or term to sell the piano. And these already considered an offer made by Steven.

On the 7th of November 2010, Tanny came back to Malaysia from Australia where the offer already expired.

On the 8th of November 2010, Tanny decided to post a letter accepting to buy the piano for RM14,000. And this is a new offer made by her. However, it is not an acceptance because no communication takes place.

This is as in the case Adams v Lindsell (1818) 106 ER 250, Lord Ellenborough. “D wrote to P offering to sell some wool, and asked for a reply “in course of post”. This offer was delayed two days in the post, and consequently P’s acceptance was late in coming back. On the day before it arrived (but after it had been expected), D sold the wool elsewhere. The court said P was entitled to damages: his acceptance was complete when his letter was posted, before the wool was sold to the third party.”

Tanny is actually making an offer and in which it is a bilateral offer. Bilateral offer is offer made between two people only where the identity of offeree here is known.

On the 11th of November 2010, Steven received Tanny’s letter. Then it is up to him whether to accept or reject her offer.

http://www.stbrn.ac.uk/other/depts/law/newnotes/notes51.htm