Problem question on offer or invitation to treat. Watch

ThePrognosticator
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"A person, Alexander, puts an advertisement in the local paper stating that he'll be selling boxes of chocolate at a discount price of $10 instead of the actual retail price which is $15. It's also said in the advertisement that the boxes of chocolate are only 40. Anyone wanting the chocolate would either have to contact the person, Alexander, in person or e-mail him at his e-mail address."

Is this an invitation to treat or an offer? It'd be appreciated if it's explained how it's an offer or an invitation to treat.

Thanks.
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ThePrognosticator
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Urgent help needed so I'd be grateful if someone replied as soon as possible. ;D
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superdillon
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In order to make an offer, I think that the vendor needs to be specific about the price that he is going to sell it for. Anything short of that really is classed as an invitation to treat. Re: the problem question: you therefore need to decide whether the price was 'certain' when the guy made the offer. For my part, I think that you will find that he did make an offer.

This could be wrong or very incomplete, can't rememeber most of the contract law that I learnt unfortunately.
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Legal__Eagle
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Without sound harsh ThePrognosticator but shouldnt you be doing this yourself rather than getting other people to tell the answer for you?
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Fireman John
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Adverts are GENERALLY invitations to treat. They lack certainty - as was the case in Partridge v Crittenden. - he had entered a price but NOT a QUANTITY. The judge indicated that the outcome of the case might have been different (i.e. it might have been construed as an offer) if there had been details of his stock.

When does an invitation to treat BECOME an offer? It comes with the addition of more certainty - see Carlill v Carbolic Smokeball Co. - testimonials, money deposited in the bank as a sign of sincerity etc. - see also the US case of Lefkowits v Minneapolis Surplus Store - the 3 fur coats at $1 each, "first come, first served". Admittedly the US case is only at best persuasive - but it is an indication of the difference between an "offer" and an "invitation to treat.

As to whtehr this is the invitation to treat or the offer - well, you'll have to make your own mind up on that - you also need to look at the modes of acceptance.
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Lewisy-boy
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Well the end question is whether an objective third person would consider it to be an offer and acceptance. The objevtice theory of contracts is at the root of all things off and acceptance: you cannot forget it. It is interesting to note that in the majority of jurisdictions e-mails have been held to not use the postal rule, so if that's relevant I hope it helps.
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Scotsman1988
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Invitation to treat? We've been looking at Carlil V Carbolic Smoke Ball Co. and Pharmaseutical Society V. Boots in Legal Methods and Invitation to treat has been mentioned, but not explained. Can someone explain what Invitation to treat is?
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Fireman John
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An "invitation to treat" is a willingness to accept offers as opposed to an "offer" which can be described as a willingness to contract. It lacks the "certainty" of an offer. It's not always easy to define one from the opther as there aren't any clear-cut rules but generally you look at the terms - are they definite and explicit and is there a clear intention to be bound? If there is - it's likely to be construed as an offer, if there is an element of uncertainlty then it is an invitation to treat.
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Eru Lawliet
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(Original post by superdillon)
In order to make an offer, I think that the vendor needs to be specific about the price that he is going to sell it for. Anything short of that really is classed as an invitation to treat. Re: the problem question: you therefore need to decide whether the price was 'certain' when the guy made the offer. For my part, I think that you will find that he did make an offer.

This could be wrong or very incomplete, can't rememeber most of the contract law that I learnt unfortunately.
Where did you get this information from?I'd appreciate it if you can show it to me. Cheers
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superdillon
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Sorry, I think that it holds true but I can't remember what case I got it from.
Fireman John has been stressing on this topic for a while may be he can help you...
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Lewisy-boy
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An example of an invitation to treat would be an invitation for tenders on a contract. People submit bids, which are offers... and then one is accepted. Another example is shops, an anomoly... as if they were offers putting it in your basket would make it technically illegal to put it back, and it would be legally binding for the shop to sell an infinite amount. Ultimately what is an ITT and what is an offer is a matter of policy.
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Eru Lawliet
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(Original post by superdillon)
Sorry, I think that it holds true but I can't remember what case I got it from.
Fireman John has been stressing on this topic for a while may be he can help you...
No worries. Yea I'll ask him.Cheers
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ThePrognosticator
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Thanks to everyone for the help they've rendered.
Fireman_John, I have a question for you. Anyone else can also answer it if they want to but I want to ask Fireman_John in particular, since he's the one who brought it up.

Adverts are GENERALLY invitations to treat. They lack certainty - as was the case in Partridge v Crittenden. - he had entered a price but NOT a QUANTITY. The judge indicated that the outcome of the case might have been different (i.e. it might have been construed as an offer) if there had been details of his stock.

Sorry, I'm not familiar with the way of quoting paragraphs on here so I copied and pasted directly. Anyway, you mentioned in the above paragraph that in Patridge v Crittenden, the judge indicated that there should also be a quantity in order to construe it as an offer. Right? Reading the question I posted, the person advertising has clearly stated that there are only 40 boxes of chocolate available.
So wouldn't it be an offer in this case because the quantity's also been stated?

Thank you.
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Fireman John
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Prognosticator - that's for you to decide and argue... you've quoted an authority on invitations to treat (Partridge v Crittenden) - you can use that as support for your opinion...

As I've said - it comes down to a question of certainty. On the whole a court will look at a matter OBJECTIVELY - "through the eyes of a reaosnable man" - is this man MAKING AN OFFER? Is there ENOUGH CERTAINTY ON THE MATERIAL TERMS TO MAKE AN INSTANT, UNEQUIVOCAL ACCEPTANCE - if the answer to that is "yes" - then it's an offer... if there is something missing thne it's an invitation to treat.

Why are adverts, brochures etc generally considered "invitations to treat" - policy reasons - people don't have unlimited stock etc. If geenral ads were held as offers they woul dbe forced to contract with everyone who accepted the offer - stock levels are generally finite. In addition to that, "freedom to contract" - a person has to be able to choose (within the confines of anti-dsicrimination legislation) who to do business with.

BUT - if material temrs are definite and the person has displayed a clear intention to enter into a contract, then an advert can be considered an offer. Carlill v Carbolic Smokeball Co.

As for the "price needs to be definite" quote by Superdillon - you're right in a sense... but it's misleading to simply say "price" - it's all of the essential material facts - there's the case with the "van on HP" - what are "HP terms"? (Scammell v Ouston). An offer must be capable of immediate acceptance... you cannot make an agreement where there is ambiguity in the terms - therefore the advert has to be viewed as an invitation to treat.
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chalks
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I think the specification of quantity in the ad probably takes this away from a Partridge ITT and into a Carlill unilateral offer.

I imagine that your question continues to say that someone responds to the ad by post or something similar i.e. not in person or via email as specified in the ad. If so, look at Manchester Diocesan Council for Education, Qunerduaine and Tinn v Hoffman.
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Lewisy-boy
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There is a bid debate about web advertisements on on-line stores, having just done a research paper about e-contracting you have to be damn careful the way you word your advertisement to make sure it is not an offer.
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ThePrognosticator
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Having read your replies, I seem to understand it quite a lot.

The most interesting part is that the communication of acceptance was done through e-mail, not by having met in person. And as Lewisy_Boy has already posted there's a big debate being going on this matter.
So what rule would apply now? Would the postal rule be applied?
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Fireman John
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The first thing to say is that the Electonic Commerce Regulations 2002 (SI 2002/2013) do NOT apply to email - specifically exempted under article 11 s3.

So what rules of acceptance do apply?

Because dlivery of email happens via a server - i.e. you sent it - it goes through a third party machine - ends up on the recipients machine, iti sn't ALWAYS instantaneous although the delay is generally accepted as being very, very short but all sysyems vary.

Postal rules, however, aren't considered totally analagous with email and Poole recommends the Receipt Rules. This then creates the problem - well what constitutes a receipt? Communication to the server? To the recipients machine? or to the individual concerned?

It is for you to argue the method as case law is not yet established - in so far as i can see?
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Lewisy-boy
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I don't think so ... although as far as I am aware there is no direct UK authority on this matter (or wasn't when I studied it). HOwever, there is persuasive authority from Singapore (obviously merely persuasive, but it does come from the highest appellate court) in Chwee Kin Keong v Digilandmall.com Pte Ltd (despite being a case primarily of mistake, general issues of contractual formation in the electronic environment were also discussed) that the receipt rule would apply. This was based on such things as the Electronic Transactions Act which seems to support such a contention (which, in turn, is based on the UK ETA, see s15). But note, the ETA is procedural and not meant to be substantive. Also, the Vienna Sales Convention on International Sales seems to impose receipt rule in the absence of a contrary intention... should a different rule apply to domestic contracts? Singapore is a signatory of this, I am not sure of the UK's status.

Of course there are counters to this, but emails are, 99.9% of the time received almost instantly and take no time at all to be processed thru servers. The debate could go either way, but in the absence of any discussion of the issue by the UK courts you have to draw guidance from elsewhere. Of coruse, if soemthing has been decided since I studied contract I apologise for this.

As fireman John says there are added problems in the electronic environment but these are overcome by the cases on faxes, or I think it would be - ie ignoring it if received within business hours would not be allowed.
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Fireman John
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We certainly weren't given any authorities on Email, Lewis - in fact it was barely touched upon. As you say, with Fax there is Brinkibon - which held that when acceptance was delivered by fax in "normal office hours" - Acceoptance occurs when the message is deleivered - NOT READ. Brinkbon confirming the decision on Entores.

There is an argument to be made for analogising Email with Telephone answering machines as opposed to Fax, however!

People don't ALWAYS have a computer switched on, so the message isn't automatically delievered/communicated as in the case of telephone answering machines.

I think it's a great question becuase it goves you the scope to cover a great deal of eventualities... you can consider the pros and cons of postal rules, fax, telephone answering machines etc... I would personally suggest that there may be a more subjective element in Email than there is in other methods - a need to look at the individual party and the specific circumstances.
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