OFFERLaw of

Contract

An offer is an expression of willingness to

contract made with the intention that it shall

become binding on the offeror as soon as it is

accepted by the offeree.

Definition of “Offer”

Offeror – the person who make the offer

Offeree – the person who takes the offer

Mode of Offer

• Offer may be made in writing or verbal

• Offer may be express or implied

Something that is said to indicate that an offer is being made

Something that is done, that though not expressly communicated, automatically indicate the act of offer.

• An offer may be made to a particular individual or to a group of people

• If the offer is made to a specific individual, only that person may accept the offer

• If an offer is made to a group of people, then anyone from the group may accept the offer.

Transactions that

are not Offer but

Invitation to Treat

Invitation to Treat

An "invitation to treat“ is where a party is merely inviting offers, which he is then free to accept or reject.

1) AuctionsAn auctioneer's call for bids is an invitation to treat, a request for offers. The bids made by persons at the auction are offers, which the auctioneer can accept or reject as he chooses. Similarly, the bidder may retract his bid before it is accepted.

Payne v Cave (1789)

2) Display of Goods

The display of goods with a price ticket attached in a

shop window or on a supermarket shelf is not an offer

to sell but an invitation for customers to make an

offer to buy.

Fisher v Bell [1960] P.S.G.B. v Boots Chemists [1953]

3) AdvertisementsAdvertisements of goods for sale are normally interpreted as invitations to treat.

Partridge v Crittenden [1968]

However, advertisements may be construed as offers if they are unilateral, ie, open to all the world to accept (eg, offers for rewards).

Carlill v Carbolic Smoke Ball Co [1893]

4) Mere Statement of PriceA statement of the minimum price at which a party may be willing to sell will not amount to an offer.

Harvey v Facey [1893] Gibson v Manchester County Council [1979]

5) TendersGoods advertised for sale by tender, is a request by the owner of the goods for offers to purchase them. The statement is not an offer, but an invitation to treat.

Harvela Investments v Royal Trust Co. of Canada [1985] Blackpool Aero Club v Blackpool Borough Council [1990]

Supply of InformationThe act of supplying information does not show intention to be bound by the reaction of the person receiving the information Harvey v Facey (1893) Bigg v Boyd Gibbins Ltd (1971)

Statement of IntentionA mere statement indicating a person’s intention to do something is not an offer. Harris v Nickerson (1873)

Transactions that are not Offer at all

• For an offer to be effective, the offeree must have knowledge of the offer.

• It is impossible to “accept” an offer which you have never heard of

Taylor v Laird (1856)

Communication of Offer

Termination of the Offer

1) Acceptance• Once an offer has been accepted, a binding contract is made

and the offer ends.

2) Rejection• If the offeree rejects the offer that is the end of it.

3) Counter Offer• The original offer is modified• Counter offer “rejects” the original offer, rendering the latter no

longer available for acceptance, unless if the offeror renews his offer.

• However, a request for information is not counter offer Hyde v Wrench (1840)

4) Lapse of time• Where an offer is stated to be open for a specific length of

time, then the offer automatically terminates when that time limit expires.

• Where there is no express time limit, an offer is normally open only for a reasonable time.

Ramsgate Victoria Hotel v Montefiore (1866)

5) Failure of a Condition• An offer may be made subject to conditions. • Such a condition may be stated expressly by the offeror or

implied by the courts from the circumstances. • If the condition is not satisfied the offer is not capable of

being accepted. Financings Ltd v Stimson [1962] 3 All ER 386.

7) Death

• The offeree cannot accept an offer after notice of the offeror's death.

• Unless if the offeree does not know of the offeror's death and he accepts it in bona fide

Bradbury v Morgan (1862) 1 H&C 249

8) Revocation• The offer may be revoked by the offeror at any time until it is

accepted. • Revocation of the offer must be communicated to the offeree(s). • Unless and until the revocation is so communicated, it is

ineffective – Byrne v Van Tienhoven (1880)• The revocation need not be communicated by the offeror

personally, it is sufficient if it is done through a reliable third party – Dickinson v Dodds (1876)

• Where an offer is made to the whole world, the offeror must take all reasonable steps to revoke his offer – Shuey v United States [1875] 92 US 73.

• Once the offeree has commenced performance of a unilateral offer, the offeror may not revoke the offer.

Errington v Errington [1952] Daulia v Four Millbank Nominees [1978]

End