Case Laws on Offer – Business Law, Contract Law

Offer – Business Law

Under business law, was there an offer in the first place?

• YES
  • Online Payment: There was intention to create a binding contract
    • Chwee Kin Keong and others v Digilandmall.com: Although catalogues and price lists are often considered invitations to treat, this may not apply in cyberspace as the ordering system of website has the intention of making an offer and forming a binding contract by making the customer go through the step-by-step procedure and finally clicking “I accept” and making the payment.
  • Unilateral contract, one that is brought into existence by the act of the one party in response to a conditional promise by another, usually the offeror. 
    • Carlill v Carbolic Smoke Ball Co (1892): The defendant advertised the product making a promise to pay 100 pounds to anyone who uses the product and still contracts influenza. Carlill performed that act and contracted influenza and successfully sued for the 100 pounds as the court held that the advertisement in this case was an offer to the whole world.
• NO
• It is an invitation to treat
  • Advertisement
    • Partridge v Crittenden (1968): Partridge was prosecuted for advertising the sale of live aviary wild birds, an act which is illegal in the prevailing legislation. However, on appeal, the court ruled that there was no “offer for sale” and that, therefore, the legislation was not contravened. The advertisement was held as invitation to treat.
  • Display of goods and prices in a shop.
    • Pharmaceutical society of great Britain v Boots cash chemists (1952): the courts ruled that if a customer picks up a bottle of medicine from the shelves, it does not amount to an acceptance of an offer, but an offer by the customer to buy. There is no contract until the buyer’s offer is accepted.
  • Invitation to Tender, which is an invitation to treat. The person who makes the tender is the offeror.
    • Spencer v Harding (1870): the court ruled that the offer is made by the person who submits the tender. The acceptance takes place when the person inviting the tender accepts one of them.
• EXCEPTION: It is an invitation to tender, but constitutes a contractual offer
  • Harvela Investments Ltd v Royal Trust Co of Canada (1986): As the invitation to treat constituted an intention to accept the highest offer, the court ruled that this meant there was a contractual offer rather than an invitation to treat.
• Auction: the call for bids by the auctioneer is an invitation to treat whereas the bids themselves are offers.
  • According to the Sale of Goods Act S 57(2), the calls for bids are invitations to treat and a bid is an offer which is accepted by the fall of a hammer. The bidder is free to withdraw his offer before the hammer falls
• NO: It is merely a provision of information
  • Harvey v Facey (1893): Facey asked for the lowest price of a product and upon receiving the information from Harvey, tries to seal a deal. However, the court ruled that there was no contract as Harvey did not make an offer to sell but merely provided information

Offer is the first element needed in a valid contract. In the next business law post, we will be discussing termination of offer. You can read up on other business law articles here

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