An offer for sale but simply an invitation to others

Alvin runs a business of selling expensive cars. He placed a notice on one car indicating that it was for sale for £5,000 on last Monday mistakenly, in fact the real price was £25,000. His first customer was Bert, second customer was Cat and the third customer was Del. Among the three customers, Alvin has made a full contract with Del under the contract law. However, Alvin did not have a full contract with Bert and Cat. Yet, Bert wants to sue Alvin for not selling the car for £5,000 and Cat wants to sue Alvin for not holding the car until she arranged the finance. Even though Alvin had, the perfect contract with Del, Del thinks that Alvin had two separate contracts with Bert and Cat because of this Del wants to sue Alvin. Nevertheless, these customers cannot sue Alvin because of the following reasons.

Advises for Alvin

According to the contract law, Bert Cat and Del will not be able to sue Alvin because of following reasons.

Firstly, the price notices on the car did not represent a legal offer; it is an invitation to treat because, it is not an offer for sale but simply an invitation to others to make an offer. The one who offer an invitation to treat is not bound to accept the offer from others. This can be seen from Pharmaceutical Society of Great Britain v Boots Cash Chemists [1953] (David Kelly, Ann Holmes, Ruth Hayward 2005, pg110). Secondly, Bert was negotiating to a price, which Alvin did not want to sell. Thirdly, the customer Cat did not ask Alvin to keep the car until she arranged the money. Therefore, Alvin can revoke the offer any time before its accepted and sell the car to someone else as shown in Routledge v Grant [1828] (David Kelly, Ann Holmes, Ruth Hayward 2005, pg113). The last customer, Dell accepted Alvin offer and enters into a binding contract by paying £25,000 on the spot. Dell will not affect with previous contract, which Alvin decide not to sell. Therefore, according to rights and liabilities in the Contact Law Alvin will not face a lawsuit against any of the three customers.

Advises for Bert

When Bert accepts the offer of £5000 that was indicates on the car, Alvin has informed Bert that it was a mistake and that the true price of the car was £25,000. The price notices on the car did not represent a legal offer; it is simply an invitation to others to make an offer and one who offers an invitation to treat is not bound to accept the offer from others as shown in Partridge v Crittenden [1968] (David Kelly, Ann Holmes, Ruth Hayward 2005, pg110) . As a result, Bert is not in a position to sue Alvin.

Advises for Cat

Even though Cat told Alvin that, she would like to buy the car for the given price but she would have to arrange the financed. Cat did not ask Alvin to hold the Car for a certain period until she arranges the money and Alvin did not promise to Cat that he would hold the car until she arranges the money. Therefore, Alvin can revoke the offer any time before it is been accepted. Once the offer revoke, it is no longer open to Cat to accept the original offer as shown in Routledge v Grant [1828] (David Kelly, Ann Holmes, Ruth Hayward 2005, pg113). Alvin has his right to sell the car to anyone as he wish.

Advises for Del

Del has accepted Alvin’s offer by paying £25,000 and enter into a binding contract on Alvin’s terms. Therefore, Del’s contract will not affected by Alvin’s previous contract, which he decides not to sell. As a result, Del has his right and liabilities to have the car.

Therefore, in Contract law if Alvin made a contract with Bert or promise Cat that he will hold the car then they both will able to sue him. Since Alvin did not have any kind of contract with Bert and Cat, as a result they will not entitle to buy the car and will not able to sue him. While, Del had perfect contact with Alvin as a result Del is entitle to have the car.

Answerer for the question number 2

According to the case of Al v Bash Cars plc, Al operates a small business of manufacturing specialist engine filter. He put an advertisement in car trade magazine that he will supply engine filters for £60 each and he mentioned that if he receives the substantial order would reduce the price. As for the advertisement, he received letter from Bash Cars plc requesting information about 1000 engine filter via mail. Now Bash Cars plc refusing to pay rightful amount to Al, which he entitles to claim after they accepted his offer.

In the contract law, Al’s advertisement in car trade magazine is not an offer but simply an invitation to treat. According to invitation to treat, it is not an offer for sale but simply an invitation to others to make an offer and it is up to the dealer to decide whether to accept the offer (Fisher v Bell [1961]), (www.e-lawresources.co.uk). In the advertisement, Al has mention that he will supply engine filters for a cost of £60 each. He also mentions that he will reduce the price if he received substantial order. Al’s first letter receive from Bash Cars plc requesting for information of supplying 1000 engine filters which is not an offer. An offer is that an offeror make an offer to an offeree, which is capable of acceptance (Harvey v Facey [1893]), (www.e-lawresources.co.uk). The first offer made by Al, where he wrote to Bash Cars plc that he would supply engine filters at a cost of £50 each. However, Bash Cars plc did not accept Al’s offer; in return, they wrote to Al that they are willing to pay £45 per filter. The letter, which Bash Cars plc wrote to Al, was count as a counter offer, which makes Al as an offeree rather than offeror. A counter offer like this can destroy Al’s original offer so that it can no longer be accepted (Hyde v Wrench [1840]),( www.e-lawresources.co.uk). Al restates his original terms in his next letter and counter-offer back to the Bash Cars plc. This letter reinstates Al to his original position as an offeror and Bash Cars plc as an offeree. When Al’s letter arrives to Bash Cars plc, purchasing director did not notice the price alteration and order 1000 engine filters from Al. This means Bash Cars plc’s purchasing director accepted Al’s offer and enter into a binding contract on Al’s terms. Since both the parties communicate via letters, their contract will apply under postal rule and the postal rule takes effect soon as the letter posted (Adams v Lindsell [1818]) (David Kelly, Ann Holmes, Ruth Hayward 2005, pg116).

Advice for Al

As Bash Cars plc accepted Al’s, offer by ordering 1000 engine filters and enter into a binding a contract on Al’s terms. Therefore, Al is entitled to claim £50 per engine filters from Bash Cars plc.