Question

An offer is an intimation of words and conduct with a desire to enter into a binding arrangement. It is argued that for an offer to be effective, the terms of the offer must be clear, precise and unambiguous.

Please discuss this issue as follows.

1. The facts and decisions in TWO major case law on this issue pertaining to effectiveness of an offer.
2. Identify and discuss THREE other case laws on this issue.

Answer 1

It is true that for an offer to be effective, the terms of the offer must be clear, precise and unambiguous. Two major cases on the issue pertaining to effectiveness to offer are as follows:

1. Foley v. Classique Coaches Ltd., [1934] 2 K.B.

Facts:

Foley owned a land and a petrol station, and sold the land adjoining the petrol station to Classique Coaches Ltd. which is a coach company. The land was sold with a condition that Classique coaches would only use Foley’s filling to fill up their coaches as long as Foley’s petrol station can provide for it. However, no price was mentioned for the agreement. An arbitration clause was also included in the agreement. Classique followed the agreement for three year until one of their lawyers suggested that the price had not been stated in the agreement, and hence, in his opinion, it would not be binding. After this suggestion, Classique stopped buying fuel from Foley, and in response, Foley sued them for breach of contract.

Decision:

The court held that just because the price of fuel had not been mentioned in the agreement, the contract cannot be held void. The parties had agreed and performed the agreement for few years, thus an implied term was created between the parties, that the fuel would be purchased at a reasonable price. Therefore, the court held Classique coached liable for the breach of contract.

2. Carlil v. Carbolic Smoke Ball Co., [1893] 1 QB 256

Facts:

The Carbolic Smoke Ball Company (defendant) advertised in the newspaper that anyone who purchased their product and used it by properly following the instructions, and if still catches influenza would be entitled to an award of £100. The advertisement further included that the company has for this reason and to show their sincerity placed £1000 in a bank to act as a reward. Mrs. Carlill (claimant) purchased the smoke balls, and used them properly, as per the instructions but she still caught influenza, and thus she claimed for the reward of £100. The defendants stated that the advertisement was just to attract customers, and was mere ‘puff’ with no true intention. They claimed that an offer could not be made to the world and thus the claimant has technically not accepted the offer. They stated that the advertisement could not be treated as a contract.

Decision:

The court held that the advertisement amounted to a general offer, and that the offer was accepted by the claimant as she acted in compliance with the advertisement. The court further stated that the advertisement showed the company’s intention, and thus, held the company liable.

Three other case laws on the given issue are as follows:

1. Fitch v Snedaker, (1868) 38 NY 248

Facts:

Snedeker offered a reward to anyone who would find and return his dog, Fitch found the dog and returned it to Snedaker without being aware of the offer of reward. Later when he came to know about the reward, he claimed for it.

Decision:

The court held that Fitch was not entitled for the reward because of the fact that acceptance of offer, in ignorance of offer cannot be considered as acceptance. When someone gives the information without knowing the offer, then such person cannot claim the offer.

2. Harvey v Facey, [1893] AC 552

Facts:

Harvey sent a telegram to Facey asking that whether he would sell the Bumper Hall pen and the minimum price at which he would sell it. Facey sent a reply stating that the mini price at which he would sell Bumper Hall Pen was £900. To which Harvey replied that they agree to buy it at the given price and asked Facey to send the title deed.

Decision:

The court held that no contract was made between the two because Facey did not answer the first part of question that whether he wanted to sell Bumper Hall Penn or not and merely stated the lowest price of it. The court further held that no intention can be proved by those facts.

3. Thompson V. L. M. & S. Rly, (1930) 1 K.B. 41

Facts:

Thompson purchased a railway ticket from Manchester to Darwin. He was unable to read. On the front of the ticket it was written to look back for terms and conditions. One of the conditions were that the company would not be liable for any personal injuries to the passengers. An accident occurred and Thompson got injured. He then sued the company for damages.

Decision:

The court held that the terms and conditions were clearly mentioned in the back, and thus, Thompson was bound by such conditions.