OFFER

A contract will arise when

(1) an offer was made by one party and
(2) the other party communicating his acceptance which
corresponds to the offer in all material aspects,
irrespective of when the payment was made, or when
the products were delivered.

Offer is a
(1) definite promise made by the offeror to the offeree
with
(2) an intention to be bound by such promise without
further negotiation.
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 OFFER vs INVITATION TO TREAT
 An offer must be reasonably certain and consists of all material
aspects of transaction.

 The one who made an offer must be the one with an intention to be
bound by his promises made.
 Such must be distinguished from “an invitation to treat” which
lacks the intention to be binding. One party invites the other party
to make an offer rather than making one himself.

 Where a person accepts the terms of invitation, he makes an offer

but still no binding contract formed. The maker of the invitation is
free to accept or reject the offer.
 Only the offer can be accepted to form a binding contract which
would lead to legal consequences if the promises have been
breached by the offeror.
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 CASES ON INVITATION TO TREAT

1. Display of goods on open shelves

 Pharmaceutical Society of Great Britain vs. Boots
Cash Chemists (Southern) Ltd. 1953

2. Advertisement on newspapers to sell a wild bird

 Partridge v Crittenden 1968

3. Display of goods with price in a shop display window

to sell offensive weapons
 Fisher v Bell 1961

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 Pharmaceutical Society of Great Britain vs. Boots Cash Chemists
(Southern) Ltd. (1953)
 BCC operated a self-service chemist shop with one pharmacist
supervising the sale of drugs at the cashier’s desk. Certain drugs,
which according to the law (Pharmacy and Poison Act) could only
be sold in the presence of a qualified pharmacist, were put on
open shelves around the store. Two customers selected these
drugs from the shelves, placed them in a wire basket, and paid
for them at the cash desk which was supervised by a pharmacist.

 Plaintiff sued the BCC violating the Pharmacy and Poison Act
while selling the drugs.

 The legal issue is whether putting the drugs into the

basket constituted acceptance of BCC’s offer to
sell the drugs and whether there is already a sale
at that point.

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 Pharmaceutical Society of Great Britain vs. Boots Cash
Chemists (Southern) Ltd. (1953)
 Held: the display of drugs on the open shelves of a self-service
shop constituted an “invitation to treat”.
 The price tags could be incorrect or the shopkeeper may not
have enough stock to sell. They intend to invite customers to
make an offer.
 The shop owner shall be allowed to have the final say whether to
sell or not to sell the goods to the customers.

 The customer made an offer to buy at the cash desk and the sale
was completed when the cashier accepted the offer.

 Since the cash desk was supervised by a qualified

pharmacist, BCC had complied with the law and
had not committed an offence.
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Points to Discuss
1. Is the description/reward specific enough?
2. Advertiser intends to be bound?
3. Can offer made to whole world?
4. How many contract likely to be formed?
5. What if the reward is negotiable?
Case: Carlill vs. Carbolic Smoke Ball (1893)

 Facts: a company praised the effectiveness of

its products and offer to the customer that “any
person who contracts the increasing disease,
influenza, colds, after having used the Carbolic
smoke ball three times for 2 weeks will be paid
100 pounds”.

 The company deposited 1,000 pounds in a

bank to make the customers believe its words
and showed their sincerity in the matter.

 A woman claimed the money but the company

refused to pay.

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 Case: Carlill vs. Carbolic Smoke Ball (1893)
 This is so called “unilateral contract”

 In response to the specific action request made by offeror,

offeree performed exactly the requested act (which represented
offeree accepted the offer by “conduct”

 Then, a binding contract arises at the same time at the moment

the offeree performed the requested act (i.e. acceptance by
conduct)

 Performance of contract remains outstanding unilaterally on

an offeror (e.g. pay reward) when the contract forms

 An offer may be communicated to a definite person, to some

definite class of persons or to the world at large (e.g. an
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advertisement)
 COMMUNICATION OF
ACCEPTANCE
 Acceptance must be communicated to the recipient to be
effective for using “instantaneous mode of communication”
 e.g. telephone, fax, face to face conversation, etc
 Entores Ltd v Miles Far East Corporation 1955

 May be made/communicated in any reasonable manner

(may be by words, written or conduct) unless particular mode of
acceptance is specified in the offer.

 In Unilateral contract – acting on some terms of the offer

– see Carlill vs. Carbolic Smoke Ball

 Postal Rule: by which a contract is formed at the time of

posting a properly stamped and addressed letter (or use
telegram) of acceptance even if the letter is lost in the post
where it is reasonable to use the post for offer and acceptance.
 applicable to non-instant mode of communication methods
 Letter or telegram are non-instantaneous communication methods.
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 POSTAL RULE – ADAMS vs. LINDSELL (1818)
–still applies today.
 Lindsell sent a letter on 2 September 1817 offered to sell goods to
Adams. The letter was received on 5 September 1817.

 Adams posted their acceptance on the same date which was received by
Lindsell on 9 September.

 On 8 September Lindsell had already sold the goods to third party.

 Held: there was a binding contract the moment when the letter of
acceptance was posted by Adams on 5 September.

 Adams won the case.

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 EXCEPTIONS TO POSTAL RULE
(offeror’s argument)
1. Where actual communication to the offeror (or its authorized
agent) is required as specified in the offer

2. the letter of acceptance is wrongly addressed or insufficiently

stamped (offeree’s fault)

3. It is “unreasonable” to use post for acceptance (e.g. offer made

by phone/fax, while acceptance through sending letter)

4. Not apply to communicate the offer withdrawal, which requires

actual communication to the offeree.

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 Postal Rule NOT APPLIED TO REVOCATION,
MUST be ACTUALLY COMMUNICATED.
 Byrne vs. Van Tienhoven (1880)

 10/1: VT, in Wales, posted a offer letter to Byrne in NY, offering to sell
them 1000 boxes of tin plates
 10/8: VT (offeror) posted a letter revoking their offer

 10/11: B (offeree) telegraphed their acceptance (postal rule)

– contract date (offer is still open for B to accept).
 10/15: B confirmed their acceptance by letter

 10/20: VT’s letter reached B (withdrawal) - effective

 Held: B had accepted VT’s offer prior to receipt of the letter of revocation.
The letter of revocation was effective only when it was received. The
postal rule is inapplicable to the case of withdrawal of an offer. – B won
12 the case.
 CONSIDERATION ( 代價 )
 Consideration is an element:

 of mutual-exchange and bargain between the contracting

parties
 one party pay for the benefit or promise which one wishes
to secure

 a person who does not give consideration for a contract

cannot enforce the contract (gift is not legally enforceable)

 it may consist of exchange of goods or performance of

services or suffering of some detriment (i.e. giving up some
rights)
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