With reference to the case of Acme Grain Co. v. Wenaus 1917, a mere statement of a person's intention or declaration of one’s willingness to enter into negotiations is not an offer and cannot be accepted to form a valid contract. In Roger’s case, he is only inviting the public to make offers but not offering to create any legal relation. His offer in the sale column should only be regarded as an invitation to treat. It is only a mere attempt to offer, not an offer itself.
Display of goods in store was taken as invitation to treat as in Fisher v Bell (1961) case. By putting one’s interest to sell an item through any media is as good as displaying of goods in store for sale. Although Roger’s mere interest to sell his car was announced through the newspaper sale column and not by the store window, this act of intention can only be considered as invitation to treat.
Following Harris v Nickerson (1873) case, advertised price should not be hold as the contracted price. Advertised product with price is regarded as an attempt to induce offers and merely an invitation to treat.
Though Roger has detailed the car model and expecting price, he is inviting for the public to make offers and is in the general process of negotiation. Thus the stated value $20,000 or nearest offer is not conclusive. $20,000 and ‘or nearest offer’ is only a price indication to the public and can only be treated as an invitation for negotiation. There is no indication of seriousness in his commitment within his advertisement. In fact, as there is only one car to sell and there are not enough cars to be sold to whatever offers received.
From the above applied cases, both Archie and Ben have become the offeror and Roger becomes an offeree. In respond to the invitation to make offer, Archie show his interest of purchase on 2nd Feb in written and Ben made an offer a day later on 3rd Feb by leaving a voice message in Roger’s answering machine. Although Archie’s offer arrived a day before Ben, Roger is not bound to sell his car to Archie. This is because Roger is not required to accept Archie’s offer even when he received the letter of offer from Archie. Roger is able to make his choice in taking the offer made by either Archie or Ben.
For a contract to be valid, it must have three elements:-
- Intention to create Legal relation
- An agreement (offer and acceptance)
- Consideration.
Should there be any missing element, the contract become invalid. In Roger’s advertisement, he has no intention to create any legal relation with the public in his announcement of his interest to sell his car nor has he stated any seriousness in committing his act with any returns. Therefore there is no consideration in his advertisement.
Roger is not legally bound in contract with Archie since there is no contract from the beginning. Roger has his option to sell his car to Archie or Ben.
Assuming that this case was taken on as an offer, Roger has announced his offer to the public at large on the 1st Feb by publishing his intention to sell his car in the newspaper.
By applying Carlill v Carbolic Smoke Ball Co (1893) case, Roger has stated his acceptable price and shown his willingness to enter into contract with the nearest offer. By doing so, he has shown his intention of seriousness in selling his car and therefore there is an intention to create legal relationship. With both contactable address and telephone numbers stated in his offer indicated his intention to accept any offer made through either mode of communication: letter of acceptance or verbally.
Archie has accepted Roger’s offer on 2nd Feb by posting the letter of acceptance. The letter reached Roger and was read by him at 9:00am on 4th Feb. Ben has also accepted Roger’s offer on 3rd Feb by leaving a voice message on Roger’s answering machine. This verbal acceptance was received on 3rd Feb evening.
Though Roger has received Ben’s acceptance one day earlier than Archie, Roger cannot make contact with Ben until 10:00am, which is an hour after Roger came to know of Archie’s acceptance too. There is no other communications before the letter arrived.
In applying Felthouse v Bindley (1862) case, acceptance of an offer through word of mouth is not enough unless heard by the offeror. Silence will not be taken as acceptance. Agreement cannot be regarded accepted unless made known to the offeror as in the case of Dickson v Dodds (1876). With reference to the two mentioned cases, Ben offer is not valid as Roger does not know of Ben’s offer until 3rd Feb and cannot replied the acceptance of Ben’s offer till 4th Feb, 10:00am.
In applying Household Fire Insurance Company v Grant (1879) case, Archie’s acceptance was completed when his letter of acceptance was posted. The post office will be regarded as the agent of the parties to receive the acceptance. This is acceptable as the post office and its agents do not know what is in the letter or its content. Therefore, Archie’s acceptance to Roger offer should be dated from 2nd Feb and not when Roger read the letter on 4th Feb.
With reference to Adams v Lindsell (1818) case, postal rule should apply in Roger’s case. Roger has not set any specific method of acceptance in his advertisement, hence postal rule will apply. Archie’s letter of accepting the offer was posted a day earlier than Ben’s acceptance by voice message. As a result, Archie was the first to accept Roger offer. In this case, Archie’s acceptance should be contractually bound to Roger’s offer whereas Ben’s acceptance will be invalid. Revocation cannot take place as Roger has already entered into contract with Archie from the day Archie posted his letter of acceptance.
Roger will have to sell his car to Archie unless a specific mode of communication in accepting his offer was stated in his advertisement.
