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Element 2: Agreement

An agreement is made when a valid offer

has been accepted.

The Offer


a definite promise to be bound
provided that certain specified terms
are accepted per Furmston
An intimation by words or conduct, of a
willingness to enter into a legally binding
contract, which in its terms expressly or
impliedly indicates that it is to become
binding on the offeror as soon as it has
been accepted by an act, forbearance or
return promise on the part of the person
to whom it is addressed. Per Anson.

Offeror and Offeree
Offeror person making the offer.
Offeree person who receives the offer.
Who an offer can be made to?
Offeror can make an offer to:
i) an individual
ii) group of people
iii) whole world Carlill v Carbolic Smokeball Company.

Invitation to Treat
Not statement of intention to be bound
instead it is an invitation to the offeror to
make an offer.

Invitation to do business at the
preliminary stagescome and make an

Offer or invitation to treat

Depends on intention of parties by using
an objective test.

Will usually be an invitation to treat.

Grainger v Gough [1896] AC 325

Wine merchant sent out circular listing
wines and their prices. Was that circular
an offer or invitation to treat. Court held
that it was an invitation to treat.

Invitation to treat
Mere display on shelf

Fisher v Bell [1961] 1 QB 394
Goods were on display in window. A flick
knife categorised as an offensive weapon.
Held that the display was not an offer but
an invitation to treat.
To avoid breach of contracts courts used
practical approach. Contrast Grainger v
Gough with Carlill v Carbolic
Smokeball Co. There was a definite
promise for which 1000 pounds was set
The more detail you give, the more likely it is to
be an offer
Mere Puff
Just sales talk, extravagant sales talk.
Goods displayed in shop case.
Pharmaceutical Society of Great Britain v Boots
Cash Chemists (Southern) Ltd [1953] 1 QB 401,
where prescribed drugs had to be bought from a
pharmacist. Boots tried to sell drugs in a supermarket
way. The case was an overlap between contracts and
criminal law.
Criminal defence putting goods on shelf was an
invitation to treat, as only at check out was a contract

Invitation to Treat
Auction Payne v Cave (1789) 100 ER 502

A man bid 40 pounds for goods that were
auctioned. He withdrew his offer before the
hammer went down. Court held that that was
fine because bid was only an offer which could
be withdrawn at any time.

Tenders an announcement inviting tenders is
categorized as an invitation to treat. Only when
people send in what they are prepared to pay
an offer is made.
Sivams Transport v Nadi Town Council
(1981) 27 FLR 192
Sometimes it is very difficult to distinguish
between the two. Ie an offer and an invitation
to treat.

Ask 2 questions
i) Is it specific and clear?

ii) Is it made with the intention of being
bound by acceptance?

Need to distinguish an offer from mere
supply of information.
Harvey v Facey [1893] AC 552
Plaintiffs said to defendants will you sell
us your piece of land? Defendant did not
give any details but just told the price.
Just supplying the price.

Offer has to be communicated. Cannot accept
an offer without being aware. Court made it
clear that offer can not be accepted unless
offeree is aware.
Taylor v Laird (1856) 25 LJ Ex 239.

Offeree has to be aware of the offer. Offer has
to be communicated to be accepted so cross
offers are not binding.