Cases on Contract Essay

The defendant made the highest bid for the plaintiffs goods at an auction sale sale, but he withdrew his bid before the fall of the aucti sensationers hammer. It was held that the defendant was not bound to purchase the goods. His bid amounted to an offer which he was authorise to withdraw at any time before the auctioneer signified fancyance by knocking down the hammer. Note The common law regulation laid down in this case has now been codified in s57(2) Sale of Goods Act 1979. Fisher v Bell (1960)A shopkeeper displayed a photo knife with a price tag in the window. The Restriction of Offensive Weapons Act 1959 made it an offence to offer for sale a flick knife. The shopkeeper was prosecuted in the magistrates court but the Justices declined to convict on the basis that the knife had not, in law, been offered for sale. This decision was upheld by the Queens Bench Divisional address. Lord Parker CJ verbalize It is perfectly clear that according to the ordinary law of contract t he display of an article with a price on it in a shop window is merely an invitation to treat. It is in no sense an offer for sale the acceptance of which constitutes a contract. PSGB v Boots (1953)The defendants shop was vary to the self-service system. The question for the Court of Appeal was whether the sales of certain drugs were effected by or under the supervision of a registered pharmacist. The question was answered in the affirmative. Somervell LJ stated that in the case of an ordinary shop, although goods are displayed and it is intended that customers should go and choose what they want, the contract is not dropd until, the customer having indicated the articles which he needs, the shopkeeper, or someone on his behalf, accepts that offer. Then the contract is completed. Partridge v Crittenden (1968)It was an offence to offer for sale certain wild birds. The defendant had advertised in a periodical tint Bramblefinch cocks, Bramblefinch hens, 25s each. His conviction was quashed by the High Court. Lord Parker CJ stated that when one is dealing with advertisements and circulars, unless they indeed come from manufacturers, there is business sense in their cosmos construed as invitations to treat and not offers for sale. In a very different context Lord Herschell in Grainger v Gough (Surveyor of Taxes) 1896 AC 325, verbalise this in dealing with a price list The transmission of such a price list does not amount to an offer to supply an unlimited quantity of the fuddle described at the price named, so that as soon as an order is given there is a binding contract to supply that quantity. If it were so, the merchant might find himself involved in any number of contractual obligations to supply wine of a particular description which he would be quite unable to carry out, his stock of wine of that description being necessarily limited. Carlill v Carbolic Smoke Ball Co (1893)An advert was placed for smoke balls to save influenza. The advert offered to pay 100 if anyone contracted influenza after using the ball. The company deposited 1,000 with the Alliance Bank to show their sincerity in the matter. The plaintiff bought one of the balls but contracted influenza. It was held that she was entitled to recover the 100. The Court of Appeal held that (a) the deposit of money showed an intention to be bound, therefore the advert was an offer (b) it was possible to have an offer to the world at large, which is real by anyone who demoralizes a smokeball (c) the offer of protection would cover the period of use and (d) the buying and using of the smokeball amounted to acceptance. Harvey v Facey (1893)The plaintiffs direct a telegram to the defendant, Will you sell Bumper Hall Pen? Telegraph lowest cash price. The defendants reply was Lowest price 900. The plaintiffs telegraphed We agree to buy for 900 asked by you. It was held by the Privy Council that the defendants telegram was not an offer but simply an indication of the minimum pr ice the defendants would want, if they decided to sell. The plaintiffs second telegram could not be an acceptance. Gibson v MCC (1979)The council sent to tenants details of a scheme for the sale of council houses. The plaintiff immediately replied, paying the 3 administration fee. The council replied The corporation may be prepared to sell the house to you at the purchase price of 2,725 less 20 per cent. 2,180 (freehold). The garner gave details about a mortgage and went on This letter should not be regarded as a firm offer of a mortgage. If you would like to make a formal application to buy your council house, please complete the enclosed application form and return it to me as soon as possible. G filled in and returned the form. Labour took control of the council from the Conservatives and instructed their officers not to sell council houses unless they were legitimately bound to do so.The council declined to sell to G. In the House of Lords, Lord Diplock stated that words itali cised seem to make it quite impossible to construe this letter as a contractual offer capable of being converted into a legally enforceable open contract for the sale of land by Gs written acceptance of it. It was a letter setting out the financial terms on which it may be the council would be prepared to submit a sale and purchase in due course. Harvela v Royal Trust (1985)Royal Trust invited offers by sealed tender for shares in a company and undertook to accept the highest offer. Harvela bid $2,175,000 and Sir Leonard Outerbridge bid $2,100,000 or $100,000 in excess of any other offer. Royal Trust accepted Sir Leonards offer. The trial reckon gave judgment for Harvela. In the House of Lords, Lord Templeman stated To constitute a fixed bidding sale all that was necessary was that the vendors should invite confidential offers and should acquire to accept the highest offer. Such was the form of the invitation. It follows that the invitation upon its true construction created a fi xed bidding sale and that Sir Leonard was not entitled to submit and the vendors were not entitled to accept a referential bid.Blackpool Aero Club v Blackpool Borough Council (1990) BBC invited tenders to operate an airport, to be submitted by noon on a fixed date. The plaintiffs tender was delivered by hand and regularize in the Town Hall letter box at 11am. However, the tender was recorded as having been received late and was not considered. The club sued for breach of an maintain warranty that a tender received by the deadline would be considered. The judge awarded damages for breach of contract and negligence. The councils appeal was dismissed by the Court of Appeal. ACCEPTANCEBrogden v MRC (1877) B supplied coal to MRC for many years without an agreement. MRC sent a draft agreement to B who filled in the name of an arbitrator, write it and returned it to MRCs agent who put it in his desk. Coal was ordered and supplied in accordance with the agreement but after a dispute aros e B said there was no binding agreement. It was held that Bs returning of the amended document was not an acceptance but a counter-offer which could be regarded as accepted either when MRC ordered coal or when B actually supplied. By their conduct the parties had indicated their approval of the agreement.