Narrative
Chronological order of events
- Xavier wrote to YY stating, “I hear you have a Nokia 7600 mobile for sale. I would be interested in buying it for $2,000 if it is in good condition.”
- YY wrote back to Xavier, “I agree to sell the phone to you but there are still a few things which need doing to it before it is fully usable.” However, the letter was lost in the post.
- Xavier wrote a week later stating, “As I have not heard from you I assume the price was not enough. Will you accept $3,000?”
- YY replied by e-mail to Xavier’s e-mail address in her office saying, “I accept the offer.” Unfortunately, Xavier was away and did not check her e-mails and three weeks later returned to check the e-mails and found the message from YY. Meanwhile, YY having heard nothing sold the phone to Tommy for $2,500.
Advise
Synopsis
- To advise Xavier, needed to consider whether or not a contract had been formed with YY.
- In order to determine whether there are contract formed, it is necessary to conduct the traditional analysis of offer and acceptance.
- Was Xavier’s written statement, e.g. letter to YY to be an offer or an invitation to treat [Gibson v. Manchester City Council (1979) and Storer v. Manchester City Council (1974)] or a preliminary statement as to price [Clifton v. Palumbo (1944)] or request information [Harvey v. Facey (1893)]?
- Firstly, “invitation to treat”, where it is a statement of willingness to contract on certain terms if the other party offers to deal on those terms – an invitation to others asking them to make offers.
- Secondly, offer is defined as “an expression of willingness to contract on certain terms, made with the intention that a binding contract will exist once the offer is accepted.” [The Common Law of Obligations, 3rd Edition, Cooke & Oughton, Butterworths 2000, p.28]
- Thirdly, a request of information is not an offer and neither is a reply to such request unless the respondent so indicates.
- To be an offer (whether an original offer or a counter offer), a statement must contain a promise or promises and not just a fact or information, as was indicated in Harvey v. Facey (1893). So the question becomes did Xavier intend his statement to be a promise to buy the mobile phone on condition that he expected in good condition as he thought?
