# Scenario examining offer and acceptance for the sale of goods. A problem question case study

## Example Contract Law Problem Question

### Question

Due to petrol prices increasing dramatically in recent months, Aaron decides to sell his limited edition Range Rover Sport, and is considering buying a smaller vehicle. Aaron places an advertisement in his car window on 1st June stating:

'Range Rover excellent condition, one owner £25,000 or nearest offer. Please contact Aaron on 07856953214 (evening) or 0205 4785 2365(during office hours 9-5pm).'

Scott (Aaron's neighbour) on seeing the advert earlier that day, decides to contact Aaron that evening, and arranges to inspect the vehicle. After inspecting the vehicle Scott states that he will contact him, if he's still interested.

On 3rd June, Chloe calls Aaron's mobile number after inspecting the vehicle (the previous day), and offers £24,500. Aaron is delighted and says 'how about £24, 750?'Chloe states that she will need to discuss this with her husband, Aaron tells her to call back at 6pm.

Chloe contacts Aaron on his mobile phone at 7.30pm; however the phone is switched off. As there is no facility to leave a message, Chloe tries his work number the following day, however Aaron is at a conference so she leaves a message on his answering machine, stating that she definitely wants the Range Rover for £24,750. Aaron doesn't return to his desk until late that afternoon and fails to listen to his answering machine that day. Chloe then tries his mobile in the evening but it's still switched off.

Vish, a dedicated car dealer, contacts Aaron the next day (4th June), on his mobile phone, stating that he's really interested in the vehicle, and arranges to meet Aaron during his lunch break to inspect the vehicle. Aaron meets Vish, and accepts an offer of £26,000 from Vish.

Aaron is delighted with the sale and decides to purchase a pair of Gucci shoes. When he enters the shop, he sees a price tag by a pair of Gucci shoes for £89. He's always wanted a pair but could never afford them, so thinking that the shoes are on sale, attempts to purchase them. When he gets to the till point, the cashier scans the barcode on the box and informs Aaron that shoes are £210. Aaron refuses to pay £210, and demands he should have the shoes for £89.

Scott and Chloe contact Aaron the next day (5th June) demanding the vehicle for the advertised price.

Aaron's concern is that he may have formed an agreement with either Scott or Chloe for the car's sale, prior to accepting Vish's offer. If this is the case then he may be liable for a breach of contract.

An offer is; "An expression of willingness to contract on specified terms, made with the intention that it is to become binding as soon as it is accepted by the person to whom it is addressed."4 Scott's inspection of the vehicle and subsequent arrangement to contact him, if he is still interested, is conditional on his interest to contract by making an offer, shows that he has no intention to create legal relations, at that moment and therefore no offer has been made by his statement.

On 3rd June Chloe makes an offer on the car, after inspecting it. Aaron does not accept her offer as he wants more for it and increases the amount by way of a counter offer to Chloe. The rule for counter offers is found in the case of Hyde v Wrench5, that is; the counter offer replaces the original offer with new terms and once a counter offer has been made, the party that rejected the original offer can not then again maintain that the original offer still stands and forms a contract. The inspection closes with Aaron telling Chloe to call him back at 6pm. Aaron's statement is very likely to be considered a term in the counter offer. Chloe's failure to call back before the expiration of the counter offer, means that it is more than likely that the counter offer has expired, and no contract for the car being made.

1. The intention of the parties.
2. Did the communication take into account sound business practices?
3. Where the risk lies

Applied to the scenario:

1. Chloe and Aaron's intention to form an agreement by telephone is clearly demonstrated on the facts.
2. As stated above, acceptance occurred the same day if received in office hours; 9am - 6pm, and the following day, outside those hours. No time is given as when Chloe left her voice message on Aaron's answer phone. We can assume that it is made within business hours, as Aaron is at a conference. If this is the case, then a contract would be made on 4th June, as Chloe's acceptance would have been communicated to Aaron. However, Chloe not calling Aaron back at 6pm will demonstrate that she has not followed sound business practices and in addition, has not engaged in or established any contingencies in the terms or in practice, for failing to contract with Aaron, i.e. alternative contact methods such as email, to minimise the risk of not contacting Aaron to communicate her acceptance to Aaron.
3. The risk of acceptance not being communicated to the offeror has been established on the facts as lying with Aaron who does not check his messages.

In Brinkibon, both the claimant and defendant were companies involved in a substantial commercial transaction; 20,000 metric tonnes of steel bars14 and contracting in different jurisdictions, However, out of the need for commercial certainty and for the sake of legal rationality, the judgement included general transactions, not just commercial transactions, in an instantaneous communication by an offeree for acceptance. Therefore, on the facts, Chloe's communication of her voicemail left on Aaron's phone on the 4 June would most likely form a communication of acceptance of Aaron's counter offer.

On the facts, Vish has fulfilled the prerequisite; offer, acceptance, legal intention and consideration, to enter into a contract with Aaron for the car. Aaron's liability for breach of contract may come from his acceptance to offers made by both Chloe and Vish. As it stands on the facts, this is likely, as Chloe will argue, that she has made an attempt on three occasions to contract with Aaron, leaving a message on one occasion and having followed the form of communication highlighted in the advertisement; use of numbers at specific times, that is placed in Aaron's advertisement. In her action to show that a contract was formed between her and Aaron for the car, she will rely on the case law of Brinkibon15 to demonstrate that her answer phone message left on Aaron's phone constituted a receipt of communication and therefore formed a valid acceptance. If Both Vish and Chloe's agreements with Aaron form contracts, there is insufficient detail on the facts to determine which agreement was formed as a contract first and therefore, which party would go on to own the car and which aggrieved party would have the basis to claim for damages.

On the facts, Aaron thinks he is right, to demand to pay the sale price, for shoes displayed at sale price and not the full retail price as asked by the cashier.

The general rule is that a price marked goods offered for sale in a shop window are not an offer16, but an invitation to treat to invite customers to make offers on the goods displayed. In Pharmaceutical Society of Great Britain v Boots Cash Chemists (Southern) Ltd17, a chain of self service chemists were brought to court for selling medicines containing poison displayed on the shop shelves and being sold without the required professional supervision. The Court of Appeal held that the regulatory requirements were met by the defendant, that being, the goods on display in a shop or self service shop are invitations to treat and as such the customer only made an offer when he brought the goods to the cashier, it was the scrutiny of the cashier under the supervision of a chemist if the customer's offer was to be accepted. For Aaron, the law does not relieve his frustration, as the shoes are on display as an invitation to treat. He will be unable to demand the sale price, even though the shoes have a sale price tag. He can only make an offer of the sale price to the cashier. The final say, lies with the cashier whether or not to accept Aaron's offer and form an agreement based on the sale price.

### Footnotes

1 Partridge v Crittenden 1968 1 W.L.R. 1204

2 Lefkowitz v Great Minneapolis Surplus Stores, 86 N.W. 2d 689 1957

3 Partridge v Crittenden 1968 1 W.L.R. 1204

4 Edwin Peel, (Treitel) The Law of Contract, (Sweet & Maxwell 2007)

5 Hyde v Wrench 1840 49 E.R. 132

6 Edwin Peel, (Treitel) The Law of Contract, (Sweet & Maxwell 2007)

7 Taylor v Laird 1856 156 E.R. 1203

8 Adams v Lindsell 1818 106 E.R. 250

9 Henthorn v Fraser 1892 2 Ch. 27

10 Entores Ltd. v. Miles Far East Corporation 1955 2 Q.B. 327

11 Brinkibon v Stahag Stahl und Stahlwarenhandels GmbH 1982 2 W.L.R. 264

12 Tenax Steamship Co v Owners of the Motor Vessel Brimnes 1974 3 W.L.R. 613

13 Brinkibon v Stahag Stahl und Stahlwarenhandels GmbH 1982 2 W.L.R. 264 42

14 Brinkibon v Stahag Stahl und Stahlwarenhandels GmbH 1980 WL 148456 3

15 Brinkibon v Stahag Stahl und Stahlwarenhandels GmbH 1982 2 W.L.R. 264

16 Fisher v Bell 1960 3 W.L.R. 919

17 Pharmaceutical Society of Great Britain v Boots Cash Chemists (Southern) Ltd 1953 2 W.L.R. 427