Contract I: Term 1 Written Work

Student: Adam Ferris Tutor: I-San Tiaw Tutorial Group: N

The first issue that needs to be discussed is whether or not Gertie’s advert in the magazine constitutes a unilateral offer or an invitation to treat/negotiate. The answer to this is integral in deciding whether or not Gertie has formed a binding contract with either Maurice or Fred. Whilst there is precedent stating that advertisements in newspapers are usually invitations to treat, there are certainly exceptions. In Partridge v. Crittenden - [1968] 2 All ER 421 Ashworth J states that an advert placed in a section of a media item under such a heading as ‘Classified adverts’ is simply an offer to treat. However, I contend that Gertie’s notice is fundamentally different from this case, in that Gertie’s notice is an advertisement to purchase a chattel, whereas In Partridge the item is for sale. There is no mention in any of the judgments of how to classify an advertisement to purchase. Furthermore, Gertie’s notice is far more specific and detailed the advert in Partridge. Her notice includes details of when payment will be made and specific methods of contact are given, whereas the advert in Partridge provides neither of these. Although not binding, the judgment of Murphy J in Lefkowitz v. Greater Minneapolis Surplus Stores Inc, 86 NW2d 689 [1957] states that if such advertisements are clear and explicit, with no room for negotiation, then this constitutes an offer. This judgment also cites Johnson v. Capital City Ford Co, a case involving advertisements for both purchase and sale. In this case it was decided that a specific advert for the purchase of a chattel can be considered as an offer. Gertie’s advert is certainly specific as it gives the exact item that is needed, even including the detail that it must be a ‘wood nymph design’. There is no room for negotiation as Gertie also clearly states a price. Although there are no binding cases that set a clear precedent for whether such an advert to buy constitutes an offer to sale or an invitation to treat, I would advise Gertie that there is persuasive evidence that may lead to the notice being construed as an offer. It is accepted that there are exceptions to the precedent set forth by Partridge as the scope of this judgment was

narrow and did not attempt to deal with the wider issue of such advertisements as a whole. I would advise Gertie that her notice in Mung Monthly may be considered specific enough to be an offer. In order to accept a unilateral contract it is not necessary to communicate the acceptance to the offeror, merely to fulfil the performance required in the offer. In this case that is to procure a ‘Mung monthly authenticity certificate’ and present it to Gertie. Carlill v. Carbolic Smoke Ball Co [1893] 1 QB 256 demonstrates this principle. The court decides that Carbolic Smoke Ball Co have waived their right to be notified of an acceptance and that by completing the performance, Carlill has accepted the offer. Furthermore, the offer may not be revoked once the oferee has started performance, as shown in Errington v. Errington [1952] 1 KB 290. Therefore, once either party has started to procure the authenticity certificate Gertie may no longer withdraw her offer. Once an authenticity certificate is presented to her this is acceptance by conduct and contributes to form a binding contract. Therefore Gertie may be bound to buy the vase from the first person who presents her with the certificate. She is not obliged to buy more than one vase as her notice quite clearly states that she only wants one. Maurice made the initial contact with Gertie via phone call. However, Maurice’s phone call was merely a request for information regarding the specific design of the vase. It did not constitute an acceptance or a move towards acceptance. In assessing at what point Maurice’s certificate is considered communicated to Gertie, one must consider whether the postal rule of acceptance applies. Application of the postal rule would mean that Maurice’s acceptance became effective as soon as he had posted the certificate. One of the criteria for the application of the postal rule is that both parties must have considered that the postal service might be used to communicate an acceptance, as stated in Holwell Securities Ltd v. Hughes [1974] 1 WLR 155. At some point Maurice finds out Gertie’s address as is it not mentioned in the notice. However, I cannot be sure if this was obtained from Gertie or whether or not Gertie advised Maurice to send the certificate by post. Therefore, it is impossible to tell whether or not Gertie had verbally considered that the postal service. However, Henthorn v. Fraser [1892] 2 Ch 27 stipulates a broader scope for this contemplation. In this case the term ‘within contemplation’ is used and it is stated that if it is reasonable to consider the postal service as a reasonable means of response then it is within contemplation. The ratio in Henthorn also states that the offer does not have to be made via post in order for the postal rule to apply. As Gertie is asking for a document to be delivered to

her, it is reasonable to assume that the use of post is within contemplation. Therefore, this aspect of the criteria for the postal rule is fulfilled. However, the postal rule deals with letters of acceptance. As mentioned above, in the case of unilateral offerors, it is not usually necessary for the oferee to communicate the acceptance to the offeror. The letter posted by Maurice was not a letter of acceptance, but a means of performing his acceptance by conduct. Therefore, the postal rule does not apply here. Furthermore, it was established in Re London & Northern Bank [1900] 1 Ch 220 that the postal rule only applies once a letter reaches the post office, not if it is delivered by another agent. Maurice’s letter is delivered by a private courier; therefore the postal rule does not apply. Instead the contract is completed once Maurice completes the performance. That it once the certificate is delivered to Gertie. This occurs at 9a.m. on 8th March. Fred decides to complete the performance via e-mail. Whilst Gertie did ask for the certificate itself she should be willing to accept a copy. Gertie gave her e-mail address in the notice and therefore must have considered this method of communicating the certificate to her. Furthermore, it is public policy to use such scanned images rather than risk sending originals. As of yet there is no binding precedent relating to acceptance of any kind via email. However, the balance of academic opinion favours the view that the postal rule will not apply to e-mails. Therefore, the general rule regarding acceptance should apply. Fred’s acceptance is valid from when the e-mail arrives in Gertie’s inbox. It has been established that when dealing with instantaneous forms of communication; communications made after business hours are effective from 9 a.m. the next day. However, this relates to a business scenario, not a private transaction such as the one we are dealing with. Therefore Fred’s acceptance becomes effective from when it reaches Gertie’s inbox at 11 p.m. on 7th March. As Fred completes the performance before Maurice he is the first to form a binding contract and therefore I advise Gertie to buy the vase from him.

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