An offer can be made to a specified person
There are four cases about the offer and invitation to treat. The first case is Partridge v Crittenden. This case was a case stated by the Magistrates' Court sitting at the Castle in Chester on the 19th July 1967.On the 13th April 1967 an advertisement by the appellant (Arthur Robert Partridge) appeared in the periodical "Cage and Aviary Birds", under the general heading "Classified Advertisements" which contained, amongst others, the words Quality British A.B.C.R... Bramblefinch cocks, Bramblefinch hens 25 s. each. In no place was there any direct use of the words "offer for sale". A Thomas Shaw Thompson wrote to Partridge asking him to send him an ABCR Bramblefinch hen (a brambling) and enclosed a cheque for 30s. On the 1st May 1967 Partridge dispatched a brambling, which was wearing a closed-ring around its leg, to Thompson in a box. Thompson received the box on 2nd May 1967 and was able to remove the ring from the bird's leg without injuring it. Partridge was charged by Anthony Ian Crittenden, on behalf of the RSPCA, with illegally offering for sale a wild life bird which was not a close-ringed specimen, bred in captivity, against s. 6(1)* and Sch. 4* of the Protection of Birds Act 1954. The magistrates decided that the advertisement was an offer for sale and that the ABCR Bramblefinch hen was not a close-ringed specimen bred in captivity, because it was possible to remove the ring from the bird's leg.
The legal question facing the High Court was whether the appellant's advertisement constituted a legitimate offer for sale, and whether the bird was not a close-ringed specimen bred in captivity under the Protection of Birds Act 1954 if it were possible to remove the ring from its leg. It was held that the advertisement in question constituted in law an invitation to treat and it is not an offer to sell, therefore the offence with which the appellant was charged was not established. The judges also said that if the only issue were whether the bird was a close-ringed specimen under the Protection of Birds Act 1954, the magistrates' judgement would have been upheld.
The second case is Carlill v The Carbolic Smoke Ball Company. The Carbolic Smoke Ball Company made a product called a smoke ball that it claimed could protect the user from contracting influenza. The smoke ball was a rubber ball with a tube attached. It was filled withcarbolic acid (phenol). The tube was then inserted into the user's nose. It was squeezed at the bottom to release the vapours into the nose of the user. This would cause the nose to run, and hopefully flush out the cold. In fact the inflammation caused by the device would have probably increased susceptibility to catching influenza. The Company published advertisements claiming that it would pay £100 to anyone who got sick with influenza after using its product according to the instructions set out in the advertisement.
They stated that £100 reward will be paid by the Carbolic Smoke Ball Company to any person who contracts the increasing epidemic influenza, colds or any disease caused by taking cold, after having used the ball three times daily for two weeks according to the printed directions supplied each ball. £1000 is deposited with the Alliance Bank, Regent Street, showing our sincerity in the matter.
Mrs Louisa Elizabeth Carlill saw the advertisement, relying on the promises made in the advertisement, bought one of the balls and used it in the manner specified, yet still managed to contract influenza.
The Carbolic Company claimed that there was no enforceable contract between it and the user of the smoke ball on the grounds that there was no acceptance of its offer, because Mrs Carlill had never notified the Company that she accepted its offer, nor furnished any consideration, since the Company did not receive any benefit from a purchaser's use of the product once the sale had been completed. The court rejected both arguments, ruling that the advertisement was an offer of a unilateral contract between the Carbolic Smoke Ball Company and anyone who satisfies the conditions set out in the advertisement. Once Mrs Carlill had satisfied the conditions she was entitled to enforcement of the contract; the notification of performance of the conditions formed part of the acceptance. Furthermore, weight was placed on the £1000 bank deposit that claimed to 'shew their sincerity in the matter' in showing that the advertisement was not just a puff.
As to consideration, the Court of Appeal held that there was consideration on two grounds. The first was the benefit that the defendants gained as a result of the use of the smoke ball in response to the advertisements and the sales produced thereby. The second was that the use by Mrs Carlill of the smoke ball three times daily for two weeks constituted a detriment so that she had provided consideration for the defendants' promise.
The third case is Fisher v Bell. The Defendant displayed a flick knife in the window of his shop next to a ticket bearing the words "Ejector knife – 4s." Under the Restriction of Offensive Weapons Act 1959, section 1(1), it was illegal to manufacture, sell, hire, or offer for sale or hire, or lend to any other person, amongst other things, any knife "which has a blade which opens automatically by hand pressure applied to a button, spring or other device in or attached to the handle of the knife". On 14 December 1959, the Claimant, a chief inspector of the Bristol Constabulary of the English police force, brought forward information against the Defendant alleging the Defendant has contravened section 1(1) by offering the flick knife for sale.
The judges at first instance found that displaying the knife was merely an invitation to treat, not an offer, and thus no liability arose. The Prosecutor appealed the judges’ decision.
The last case is Pharmaceutical Society of Great Britain v Boots Cash Chemists Ltd. Boots Cash Chemists implement a new way to let the customers to shop for medicine. Instead of the old fashion way of an assistant over the counter to get the medicine the shopper’s request, they let the customers to pick of drugs from the shelves themselves. The problem came in when the Pharmaceutical Society of Great Britain object their new way of handling the business as under the Pharmacy and Poisons Act 1933 under section 18(1) a pharmacist is needed to be there at the point where the sales is taken place. The society argued that the display of drugs was an offer to the shoppers and when they put the drugs in the basket, it is a form of acceptance. And they argue that there isn’t any pharmacist there at that point of time is a violation towards the law. But of course, Boots defended themselves by saying that the sales will only take place when the buyers are at the counter and is ready to pay.
Both the Queen's Bench Division of the High Court and the Court of Appeal sided with Boots. They held that the display of goods was not an offer. Rather, by placing the goods into the basket, it was the customer that made the offer to buy the goods. This offer could be either accepted or rejected by the pharmacist at the cash desk. "In the case of an ordinary shop, although goods are displayed and it is intended that customers should go ahead and choose what they want, the contract is not completed until, the customer having indicated the articles which he needs, the shopkeeper, or someone on his behalf, accepts that offer. Then the contract is completed."The moment of the completion of contract was at the cash desk, in the presence of the supervising pharmacist. Therefore, there was no violation of the Act.
There are several differences between offer and invitation to treat. An offer is expression of willingness to contract on certain term made with the intention that binding agreements will exist when offer is accepted. If the offeree is no willing to accept the offeror’s terms, but merely seeking to initiate negotiation, it is not an offer but it is an invitation to treat. An invitation to treat is when someone invites other else to make him an offer. For an example, when a person advertises his product that is an invitation to treat rather than an offer, it is up to the customers to offer to buy. But the contract will only become an offer when the person accepts the customer’s offer. Making an invitation to treat is rather than an offer to protect a person from finding himself having agreed to the contract he cannot fulfil. Instead he can refuse the customer’s offer to buy if necessary. For an example, if he out of the stock.
For the fact of this Mon Key case, it is more like an invitation to treat rather than an offer. It is because the words in the brochure of “can offer latest 'Speedy Rice Cookers' at $10 each." It is an advertisement. As a conclusion, it is an invitation to treat not an offer.
Question 2(i) Whether Catherine has any right of action against Najman
Najman is a car dealer. He places an advertisement in the Sunday newspaper and stated that “Opportunity! A two year old, low mileage, Toyota Vios: RM50,000 cash. The car will go to the first person who accepts it. Valid for one day only". It is an advertisement and it is an invitation to treat. For the law, S 2(a) of the contract Act 1950 defines that invitation to treat which is a mere declaration of willingness to enter into negotiations. This is not an offer and cannot be accepted as a form of a binding contract. There are two cases which also about the advertisements which are Partridge v Crittenden and Carlill v The Carbolic Smoke Ball Company.
The fact for the Partridge V Crittenden is Partridge who is a person who advertises “Cage and Aviary Birds" and Crittenden is a government agent. Crittenden was charged Partridge on behalf of the RSPCA, with illegally offering for sale a wild life bird which was not a close-ranged specimen against s.6(1) and sch.4 of the protection of Birds Act 1954. This went up to the court. In Partridge v Crittenden case, the court held that advertisement constitute an invitation to treat, it is not an offer to sale. Thus, it is not a legal binding contract.
The facts for the Carlill V The Carbolic Smoke Ball Company is Carbolic Smoke Ball Company made a product called the “smoke ball" which is claimed to be a cure for influenza and a number of the other diseases. The company published advertisements in the Pall Mall Gazette and other newspapers on November 13, 1891 claiming that it would pay £100 to anyone who got sick with influenza after using its product according to the instructions set out in the advertisements. £1000 is deposited with the Alliance Bank, Regent Street, showing their sincerity in the matter. Mrs. Carlill saw the advertisement, brought one of the balls and used three times daily for nearly two months until she contracted flu on January 17, 1892. She claimed £100 from the Carbolic Smoke Ball Company but they ignored two letters from her husband. They would need her to come to their office to use the ball each day and checked by secretary. Mrs. Carlill brought the case to court. However in Carlill v The Carbolic Smoke Ball Company case, the court held that there was a fully binding contract for £100 with Mrs Carlill. Among the reasons given by the three judges were the advert was a unilateral offer to the entire world, satisfying conditions for using the smoke ball constituted acceptance of the offer and purchasing or merely using the smoke ball constituted good consideration, because it was a distinct detriment incurred at the behest of the company and, furthermore, more people buying smoke balls by relying on the advert was a clear benefit to Carbolic that the company’s claim that £1000 was deposited at the Alliance bank showed the serious intention to be legally bound.
Apply the law to the issue, Najman advertisment is more like an invitation to treat following by Partridge v Crittenden and Carlill v The Carbolic Smoke Ball Company cases. The advertisement that Najman placed which stated Opportunity! A two year old, low mileage, Toyota Vios: RM50,000 cash. The car will go to the first person who accepts it. Valid for one day only". It is more like an invitation to treat, it is not an offer.
On the same day, Catherine sees the advertisement and offers Najman a cheque for RM50,000 for his car. In law, S 2(a) of the contract Act 1950 defines that offer as the person who makes the proposal with terms and agreed by acceptor. There is a case about offer which is Carlill v The Carbolic Smoke Ball Company, the court held that it is an offer and not a mere invitation to treat. Apply the law to the issue, an offer only will be done when the offeree, Najman accept the offeror, Catherine’s offer. As a conclusion, Catherine is giving an offer to Najman.
However, Najman refuses to accept the cheque and informs Catherine she cannot have the car. Najman has terminated the Catherine’s offer. In law, there are four way of termination of offer which are acceptance by the offeree, rejection by offeree, counter offer and revocation of offer. For an example, an offer can be terminated when Mr A’s offer is be rejected by Mr B.
Apply the law to the issue, the offer had been terminated when Najman refuses the offer. Najman has rejected the Catherine’s offer, so it is not a legal binding contract. As a conclusion, Catherine doesn’t have the right of action against Najman.
Question 2(ii) Whether Najman has any right of action against Raj
Raj who say that he will pay RM50,000 in cash for the Toyota Vios. It is an offer that made by Raj to Najman. In law, S 2(a) of the contract Act 1950 defines that offer as the person who makes the proposal with terms and agreed by acceptor. There is a case about offer which is Carlill v The Carbolic Smoke Ball Company, the court held that it is an offer and not a mere invitation to treat. Apply the law to the issue, an offer only will be done when the offeree, Najman accept the offeror, Raj’s offer. As a conclusion, Raj is having an offer with Najman.
Najman agrees to sell the car to Raj, it is an acceptance. In Law, S2(b) Contract Act 1950 provides that an acceptance is when a person to whom the offer is made, accept the offer then the offer become a promise. Apply the law to the issue, the offer is done as Najman accepted Raj’ offer. It is a legal binding contract.
A week after, Raj calls Najman and informs Najman that he is no longer wishes to buy the car. In law, S5(1) Contract Act 1950 provides that a proposal may be revoked at any time before the communication of its acceptance is complete as against the proposer, but no afterwards. S6 Contract Act 1950 stated that a proposal only can revoked by four ways. Which are when the proposer communicated the revocation of the proposal to the other party before its acceptance. There is a case about it which is Byrne v Van Tienhoven, the court held that offer is only revoked by direct communication with the offeree. Second, by lapse of time prescribed in the proposal for its acceptance. If no time is prescribed, by the lapse of a reasonable time. Ramsgate Victoria Hotel v Montefiore, the court held that the offer be revoke if the acceptance is received after a lapse of time. Third, when the acceptor fails to fulfill a condition precedent to acceptance. An offer to sell a house to the offeree provided the latter obtains appropriate finance for the purchase price within a month of the date of the offer. The offer will be revoked if the offeree fails to obtain the finance within the stipulated time. Last, by death or mental disorder of the proposer.
Apply the law to the issue, Raj cannot revoke the offer because S6 Contract Act 1950 stated a proposal only can be revoked communicated the revocation of the proposal to the other party before its acceptance. Najman had accepted Raj’ offer before Raj refuse to buy so the offer cannot be revoke. According to the fact, it is a legal binding contract. As a conclusion, Najman has the right of action against Raj.