Business Law (mng 4104) Recess Period 2020/2021 Introduction to Law
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| Advertisements for unilateral contracts
These include advertisements such as the one in Carlill, or those offering rewards for the return of lost property, or for information leading to the arrest or conviction of a criminal. They are usually treated as offers, on the basis that the contract can normally be accepted without any need for further negotiations between the parties, and the person making the advertisement intends to be bound by it. Advertisements for a bilateral contract These are the type of advertisements which advertise specified goods at a certain price, such as those found at the back of newspapers or magazines. They are usually considered invitations to treat, on the grounds that they may lead to further bargaining – potential buyers might want to negotiate about the price, for example – and that since stocks could run out, it would be unreasonable to expect the advertisers to sell to everybody who applied. Mere statements as to price A statement of the price at which a party may be willing to sell will not amount to an offer (Harvey v Facey). Case: Harvey v Facey Harvey sent a Telegram to Facey which stated: - "Will you sell us Bumper Hall Pen? Telegraph lowest cash price-answer paid;" Facey replied by telegram:- "Lowest price for Bumper Hall Pen £900." Harvey then replied:- "We agree to buy Bumper Hall Pen for the sum of nine hundred pounds asked by you. Please send us your title deed in order that we may get early possession." It was held that there was no contract concluded between the parties. Facey had not directly answered the first question as to whether they would sell and the lowest price stated was merely responding to a request for information not an offer. There was thus no evidence of an intention that the telegram sent by Facey was to be an offer. Tenders This is a request by the owner of the goods for offers to purchase them. A person who asks for tenders is free to accept or reject any of the responses (Spencer v Harding). There is no general rule that the person who requested the tenders must accept the highest bid. What must be noted is that there is no contract until the tender is accepted, bearing in mind that this must be communicated to the person. However, while ordinarily, a tender will be treated as an invitation to treat, if the tender states that the person who requests the bids/tenders binds himself to accept the highest offer – the invitation is then considered an offer. Section 27(5) of the Procurement Act, Cap. 73:05 – “The Procurement contract shall be awarded to the supplier or contractor that submitted the lowest-priced quotation that complied with the requirements of the invitation.” It is submitted that this section is not so cut and dry. The entire invitation to tender must be taken as a whole, with all the relevant requirements so that while a specific tender may pass the evaluation stage, and be the lowest bid, it does not mean that that bid is what would be best for the entity seeking the tender. (Discussion is encouraged on this point) Harvela Investments v Royal Trust Co. of Canada Royal Trust invited offers by sealed tender for shares in a company and undertook to accept the highest offer. Harvela bid $2,175,000 and Sir Leonard Outerbridge bid $2,100,000. Royal Trust accepted Sir Leonard’s offer. The trial judge gave judgment to Harvela. It was stated that: “To constitute a fixed bidding scale all that was necessary was that the vendors should invite confidential offers and should undertake to accept the highest offer. Such was the form of the invitation. It follows that the invitation upon its true construction created a fixed bidding sale and that Sir Leonard was not entitled to submit and the vendors were not entitled to accept a referential bid.” Download 30.14 Kb. Share with your friends:
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