OFFER

Nadeesh de Silva
@Nadeesh R.de Silva- Lecturer,Department of Legal
11/3/20 2
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Session 02 •Offer
Agreement •Invitation to Treat
•Acceptance

@Nadeesh R.de Silva- Lecturer,Department of Legal

11/3/20 3
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 Agreement(Offer +
Acceptance) Intention to create legal
relation
Nature of the Agreement

CONTRACT

Causa Consideration

@Nadeesh R.de Silva- Lecturer,Department of Legal

11/3/20 4
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 OFFER

CONTRACT

ACCEPTANCE

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 1.Definite promise to be bound on certain specific
terms-
Gunthing v. Lynn (1831) 2 B & A 232
horse if it was lucky+ vague offer
2.made to a particular person , or class of persons, or to
the public at large –
Carlill v. Carbolic Smoke Ball Co
3. An offer must not be confused with the answer to a
OFFER question or the supplying of information.
Harveyc v. Facey
“will you sell us Bumper Hall Pen? Telegraph lowest
cash price”.
The defendants telegraphed in reply, “Lowest price for
Bumper Hall Pen, £ 900”.
The plaintiffs then telegraphed, “we agree to buy
Bumper Hall Pen for £ 900 asked by you. Please send
us your title deeds”.
@Nadeesh R.de Silva- Lecturer,Department of Legal
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Offer definition-
• Treitel
“an expression of willingness to contract on certain terms, made with
the intention that it shall become binding as soon as it is accepted by
the person to whom it is addressed”, the “offeree”.

• An offer is a statement of the terms on which the offeror is willing to

be bound.

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Objective test (Smith v Hughes)
• It is important to determine whether the parties have an agreement or
valid offer
• therefore the ‘intention”objectively judged by the courts.
• Court Held - the important thing is not a party’s real
intentions but how a reasonable person would view the
situation.
• common sense- as each party would not wish to breach his side of the
contract if it would make him or her culpable to damages, it would
especially be contrary to the principle of certainty and clarity in commercial
contract and the topic of mistake and how it affects the contract.

@Nadeesh R.de Silva- Lecturer,Department of Legal

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An offer should include at least the following
4 conditions:
• Delivery date,
• Price,
• Terms of payment that includes the date of payment and
• Detail description of the item on offer including a fair description of
the condition or type of service.

If not --- it is NOT a legal offer but rather seen as an advertisement.

@Nadeesh R.de Silva- Lecturer,Department of Legal

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 Activity -

On the 30th October, 2020 Malith advertised in the “Today News”

Paper,
“Apple 11PRO, excellent condition, 300,000Rs, if you
are interesting please call 0740000062ʺ.

Can you consider this as an offer? Give reasons.

@Nadeesh R.de Silva- Lecturer,Department of Legal

11/3/20 10
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 • The Proposal before the actual
contract
Invitation • Willingness to negotiate a
to treat contract
• A contractual process which does
not bring any legal implication

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Difference between offer and ITT
• An offer can be converted into a contract by acceptance, (Offer can be
Accepted)
• an invitation to treat cannot be accepted.
• Accepting a ITT is NOT creating a contract. But, Accepting an Offer is
creating a valid Contract.

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Types of invitations to treat
1. Tender
A statement that goods are to be sold by tender is not an offer
not bound to sell to the person making the highest tender.
Similarly a statement inviting tenders for the supply of goods is not an offer(
Spencer v Harding) 1870
Offeror - The person who submits the tender
Offeree- person who invites the tenders
Contract dose not come into existence until the person who invites the
tenders accepted one of them.
The preparation of tender may involve considerable expense and devotion of
much
11/3/20
tome but however it@Nadeesh
is a risk that
R.de Silva- is cost upon
Lecturer,Department of Legal the tenderer. 13
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2. Display of goods for sale

• Displaying goods on shelves is a ITT

• if the display of goods as an offer ,the customer is bound at the time

removing goods from the shelves

“this conclusion is undesirable because it takes away the freedom of

the shopkeeper to decide whether or not to deal with a particular
customer.It would compel the shopkeeper to trade with his worst
enemy.”[ Ewan Mckendrick, Contract Law(4th edn Palgrave,2000)34]

@Nadeesh R.de Silva- Lecturer,Department of Legal

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• J.Beatson has said in his book,
“for this conclusion is that otherwise the shopkeeper
would be obliged to sell to every person who accepted
such an “offer” ,even where supplies had run out”
[ J.Beatson ,Anson’s Law of Contract(28th edn Oxford,2002) 33

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General approach established in Boots case
• some drugs are prevented to be sold without the supervision of a registered
pharmacist, which means it’s essential to decide whether the sale is under the
supervision of the pharmacist when the contact is completed ,
key point is to identify who makes the offer and when the binding contract is
concluded.
As Somervell LJ mentioned, “if the plaintiffs are right ,once an article has been
placed in the receptacle the customer would have no right,without paying for
the first article, to substitute an article which he saw later of a similar kind and
which he perhaps preferred.”
Court - the display was an invitation to treat,
the customer’s tender of the drugs was the offer, and
the taking of the money by the pharmacists was the acceptance.
Pharmaceutical Society of Great Britain v Boots Cash Chemists(Southern) Ltd [ [1953] 1
QB 401],
@Nadeesh R.de Silva- Lecturer,Department of Legal
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• Trietel expresses a some what different opinion.

“customers may be induced by a window display to believe that they

will be able to buy goods at exceptionally low prices and to wait
outside the shop for many hours in reliance on that belief.
Ex- Special Offer-
Pizza Hut Offers-

@Nadeesh R.de Silva- Lecturer,Department of Legal

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KEY POINTS TO KEEP IN YOUR MIND
A. who makes the offer,
the shopkeeper or the customer?

B. When is the contract concluded? At the time,

when the customer removes goods from the shelves and put them in
the basket or,
when the customer presents the goods TO THE cashier?

@Nadeesh R.de Silva- Lecturer,Department of Legal

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3. Advertisements
• public advertisement is not an offer, but merely an invitation to make
an offer.
• they lack the important information that would make it an offer.
• BUT,
There are circumstances where an advertisement would be an offer.
If descriptive words are used to intend to bind someone and there is
confidence in all the applicable terms, the advertisement is likely to be
deemed an offer instead of an invitation to treat.

@Nadeesh R.de Silva- Lecturer,Department of Legal

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• Stating a price by itself ordinarily an invitation to treat,
• there could be an offer which is accepted when the customer goes to
the counter.
• example -“We sell this item for $1.25,” This statement could be
construed as having all the elements of an offer:
Because –
• Contains all the terms
• There is sufficient certainty regarding the terms
• Ability to be accepted without any additional negotiations

@Nadeesh R.de Silva- Lecturer,Department of Legal

11/3/20 20
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Where an advertisement offers a reward for
the return of lost property.
• unilateral contract - one sided
contract
• In a unilateral contract the
offerer, will not know whether
the contract is on until the
other party has performed his
part.
• Carlill v. Carbolic Smoke Ball
Co, (1893) Q.B. 256

@Nadeesh R.de Silva- Lecturer,Department of Legal

11/3/20 21
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• defendants were the makes of a medical item called “The Carbolic
Smoke Ball”.
• an advertisement in which they promised to pay £ 100 to anyone who
caught influenza after having sniffed at the smoke ball for a specified
period in a prescribed manner.
• Company stated that they had deposited £ 1000 with their bankers
to show their sincerity.
• Carilill, having seen the advertisement bought a smoke ball, sniffed at,
in the prescribed manner and then caught flu. She surd for the £100
and succeeded.

@Nadeesh R.de Silva- Lecturer,Department of Legal

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Cabolic smock ball company - Arguments Position of the Court

The advertisement was too vague since it did not state it must at least protect the user during the period of
time limit in which the user had to contract influenza. use.

Offer could not be made to the whole world, or to the The court compared the facts in this case with reward
public at large. cases and determined that such an offer was possible.

No communication of acceptance. In reward cases, such communication of acceptance

was not required.

No intention to create legal relations as the The deposit of £1000 was sufficient to indicate such an
advertisement was a mere gimmick or puff. intention to create legal relations

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4. Auction Sales
• There is normally an agreement with auction sales that every seller
and bidder must sell and discuss whether bids can be withdrawn.
There are several cases that have addressed auction sales directly.
• Dating back as early as the late 1700's, some courts have determined
that a call for bids is usually an invitation to treat.
• The bidder is making an offer, which the auctioneer can either accept
or reject.
• In recent years, some judges have held a bid is an offer where there is
no reserve. The reason is that the auctioneer is binding him- or
herself to accept the highest bid.
@Nadeesh R.de Silva- Lecturer,Department of Legal
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Next……
Acceptance •Thank you.

@Nadeesh R.de Silva- Lecturer,Department of Legal

11/3/20 25
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Next……
Acceptance •Thank you.

@Nadeesh R.de Silva- Lecturer,Department of Legal

11/3/20 26
Studies,OUSL