Formation Of Contracts Notes

Offer

• “an expression of willingness to contract on specified terms,

• made with the intention that it shall become binding as soon as it is accepted by the person[s] to whom it is addressed”

• which “may be addressed either to an individual, or to a group of persons, or the world at large; and

• it may be made expressly or by conduct”

Carlill v Carbolic Smoke Ball Co. (CA 1893)

Facts

• The defendants advertised their product and promised to pay 100 to anyone who got the flu after using the product according to their instructions.

• The plaintiffs followed the instructions and caught the flu.

Issue

• Offer – Advertisement

Judgment

• Lindley LJ

• The language of the advertisement clearly states the promise of 100.

• It could not have been taken as a jumped up claim designed merely to sell the product.

• The statement that 1000 had been lodged in a bank for the purpose of paying put the lie to that claim – it indicates that the manufacturer is being sincere in his claim.

• The fact that the advertisement is an offer to no one in particular does not mean it does not constitute an offer.

• Bowen LJ

• The defendants' contention that the terms of the advertisement are too vague to constitute an offer does not stand.

• If it is read as the ordinary person would understand it they would take it to meant that a 100 reward would be given to anyone who used the ball as directed following the promulgation of the advertisement and still caught flu.

• The advertisment cannot be read as being mere puff.

• The statement about 1000 lodged in the bank endeavoured to convince people that it wasn't.

• The claim that the ad was a contract with the entire world is untenable.

• The ad was an offer to all the world, with the objective intention to enter into a binding contract should it be accepted.

• AL Smith LJ

• The objective meaning of the advertisement was that if a member of the public used the smoke ball according to instructions and still contracted influenza, the Carbolic Smoke Ball Co. would give them 100, and that 1000 security to back up this claim had been placed in a bank.

• This could not be understood to be a mere expression of confidence on the part of the seller.

• It was a valid offer.

Kennedy v London Express Newspapers (IFS SC 1931)

Facts

• The defendants were publishers of a newspaper who were running an insurance scheme, whereby registered readers would get free accident insurance.

• This offer and its conditions were promulgated in an advertisement

• The plaintiff's wife was a registered reader and suffered an accident but a dispute arose between the parties on the claiming of insurance.

Issue

• Offer - Advertisement

Judgment

• Kennedy CJ

• The advertisement was an offer, as this was assented to by the defendants.

• Fitzgibbon J (concurred)

• Murnaghan J (concurred)

Leonard v Pepsico (SDNY 1999)

Facts

• The defendants ran a promotional campaign whereby consumers of their product could exchange pepsi points for promotional merchandise.

• They ran an ad which featured a Harrier Jet with the words 7,000,000 pepsi points displayed under it.

• The plaintiff accumulated 7 million points and then sued for breach of contact when the defendants failed to deliver the jet.

Issue

• Offer – Advertisement

Judgment (USDJ Wood)

• For an ad to constitute an offer, it must be framed in the language of commitment or involve an invitation to take action without further communication – the advertisement must be specific and leave nothing further open for negotiation.

• The presumption is that an advertisement merely constitutes an invitation to treat, in this case the presumption was not upset.

• The ad in this case reserved the details of the offer to the catalogue.

• The catalogue did not have any limitation such as first come first served that would bind it to providing the products were certain conditions to be met.

• In evaluating the commercial as an offer, the court must disregard subjective intentions and focus on the objective meaning of the advertisement.

• The reasonable person would understand that ads like this make exaggerated claims in order to drum up the excitement surrounding their offers.

Minister for Industry and Commerce v Pim Brothers (HC 1966)

Facts

• The defendants had a sign attached to goods in their shop which stated the price of the goods if they were bought outright and if they were bought on a hire purchase.

• The way in which a hire purchase or credit-sale agreement was offered was subject to certain statutory restrictions, which the plaintiff alleged were broken in this case.

Issue

• Offer – Goods on Display

Judgment (Davitt P)

• The advertisment was merely a statement of the price and an indication of credit options.

• It was too vague to make a contract to be accepted on its own terms and nothing more.

Pharmaceutical Society of Great Britain v Boots (CA 1953)

Facts

• The sale of certain drugs could only be sold under the supervision of a registered pharmacist.

• The defendants allowed customers to take such drugs from the shelves to the checkout where they would be attended on by a registered pharmacist.

issue

• Offer – Goods on Display

Judgment

• Somervell LJ

• In an ordinary shop the contract is not completed until the shopkeeper or cashier accepts the customer's offer to buy the products.

• Were the display to be the offer and the placing of the product in the basket the acceptance, then the customer would not have the power to change the product once he had taken it off the shelf.

• Birkett LJ

• The customer makes the offer to buy and the the cashier or shopkeeper accepts that offer.

• Romer LJ

• It is not the case that the customer has accepted an offer upon taking the item off the shelf.

Boyers v Duke (KB 1905)

Facts

• The plaintiffs got a quotation from the defendants for canvas, then requested a quantity of canvas based on the quotation price.

• The defendants made an error in the quotation and the plaintiffs sued for breach of...

Buy the full version of these notes or essay plans and more in our Irish Contract Law Notes.