Displays of Goods in Shop Windows & Supermarket Shelves
As a general rule these are both invitations to treat.
The two leading cases in this area are Fisher v Bell ([1961] 1 Q.B. 394) and PSGB v Boots Cash Chemists ([1953] 1 Q.B. 401).
Fisher v Bell involved the attempted prosecution of a shop keeper. The Restriction of Offensive Weapons Act (1959) made it an offence to offer for sale certain knives. The court held that the shopkeeper was not guilty of “offering for sale” a flick knife even though it was displayed in his shop window with a price tag on it.
The following extract explains the courts reasons:
“According to the ordinary law of contract, the display of an article with a price on it in a shop window is merely an invitation to treat.” - Per Lord Parker CJ (Fisher v Bell)
In some ways this is a remarkable decision. The court chose to construe the statute according to the strict literal approach.
PSGB v Boots Cash Chemists
The issue in this case was where exactly in the shop was the contract made. This was significant because statute required medicines to be sold under the supervision of a qualified pharmacist. If the contract was formed when the medicines were picked up the customer from the shelf – there was no supervision. The court held that the contract was formed at the cash till. The display of goods was an invitation to treat; the customer made the offer by taking the medicines to the till and finally; Boots accepted the offer by taking the money for the medicines.
Please note that it is only a presumption that displays of goods are invitations to treat. It is possible that the court will place a different construction if circumstances indicate that the shop owner/advertiser demonstrates an intention to contract.
In the remarkable case of Lefkovitz v Great Minneapolis Stores (86 NW 2d 689 (1957)), Mr Lefkovitz saw an advertisement for a fur coat stating:
“Saturday 9AM sharp, 3 Brand New Fur Coats, worth $100 – First Come First Served”
Mr Lefkovitz was first in line but the store refused to sell him the coat because he was a man! Mr Lefkovitz brought an action for breach of contract. The court held that the advertisement/display of goods was in fact an offer (a unilateral one similar to that in Carlill) that Mr Lefkovitz had accepted. The store was in breach of contract and Mr Lefkovitz was awarded damages.
Auctions
In an auction, the auctioneer's call for bids is an invitation to treat, a request for offers. The bids made by persons at the auction are offers, which the auctioneer can accept or reject as he chooses. Similarly, the bidder may retract his bid before it is accepted (Payne v Cave. Now codified by s.57(2) Sale of Goods Act (1979)).
The situation is different where an auction is held “without reserve” (Barry v Davies (2002) also Warlow v Harrison – this decision however was only obiter). In the case of Warlow v Harrison it was suggested (obiter) that an advertisement for an auction to be held “without reserve” contained a collateral offer to sell to the highest bidder. As the case was decided on different grounds this principle was not binding on later courts. Amazingly it took over 100 years before the courts finally decided this point in Barry v Davies.
Mere Statement of price
A mere statement of the minimum price at which a party is willing to sell does not amount to an offer ([1893] AC 552 also Gibson v Manchester County Council [1979] 1 All ER 972).
An offer should be made on definite terms
Generally speaking, the courts will not enforce offers that are vague and indefinite.
In the case of Loftus v Roberts an actress was offered of a role in a play - the salary was to be “at the West End rate”. The court held that this was too uncertain to be an offer and a valid contract had not been formed.
It must be aware that the courts have demonstrated considerable flexibility in this area.
In Hillas & Co. Ltd v Arcos Ltd ((1932) LT 503), the House of Lords upheld a contract for the sale of a “fair specification” of timber. Although it was argued that this phrase was too vague and imprecise. The court held that the contract was between parties who were experienced in the timber trade and who;
“undoubtedly attributed to the words….. some meaning which was precise or capable of being made precise.” - Per Lord Tomlin
McKendrick excellently sums up this complex area:
“On the one hand, the judges do not wish to be seen to be making the contract for the parties. On the other hand, they are reluctant to deny legal effect to an agreement that the parties have apparently accepted as valid and binding.” (McKendrick, E. Contract Law, Text Cases and Materials 2003 OUP First Edition )
As a general rule these are both invitations to treat.
The two leading cases in this area are Fisher v Bell ([1961] 1 Q.B. 394) and PSGB v Boots Cash Chemists ([1953] 1 Q.B. 401).
Fisher v Bell involved the attempted prosecution of a shop keeper. The Restriction of Offensive Weapons Act (1959) made it an offence to offer for sale certain knives. The court held that the shopkeeper was not guilty of “offering for sale” a flick knife even though it was displayed in his shop window with a price tag on it.
The following extract explains the courts reasons:
“According to the ordinary law of contract, the display of an article with a price on it in a shop window is merely an invitation to treat.” - Per Lord Parker CJ (Fisher v Bell)
In some ways this is a remarkable decision. The court chose to construe the statute according to the strict literal approach.
PSGB v Boots Cash Chemists
The issue in this case was where exactly in the shop was the contract made. This was significant because statute required medicines to be sold under the supervision of a qualified pharmacist. If the contract was formed when the medicines were picked up the customer from the shelf – there was no supervision. The court held that the contract was formed at the cash till. The display of goods was an invitation to treat; the customer made the offer by taking the medicines to the till and finally; Boots accepted the offer by taking the money for the medicines.
Please note that it is only a presumption that displays of goods are invitations to treat. It is possible that the court will place a different construction if circumstances indicate that the shop owner/advertiser demonstrates an intention to contract.
In the remarkable case of Lefkovitz v Great Minneapolis Stores (86 NW 2d 689 (1957)), Mr Lefkovitz saw an advertisement for a fur coat stating:
“Saturday 9AM sharp, 3 Brand New Fur Coats, worth $100 – First Come First Served”
Mr Lefkovitz was first in line but the store refused to sell him the coat because he was a man! Mr Lefkovitz brought an action for breach of contract. The court held that the advertisement/display of goods was in fact an offer (a unilateral one similar to that in Carlill) that Mr Lefkovitz had accepted. The store was in breach of contract and Mr Lefkovitz was awarded damages.
Auctions
In an auction, the auctioneer's call for bids is an invitation to treat, a request for offers. The bids made by persons at the auction are offers, which the auctioneer can accept or reject as he chooses. Similarly, the bidder may retract his bid before it is accepted (Payne v Cave. Now codified by s.57(2) Sale of Goods Act (1979)).
The situation is different where an auction is held “without reserve” (Barry v Davies (2002) also Warlow v Harrison – this decision however was only obiter). In the case of Warlow v Harrison it was suggested (obiter) that an advertisement for an auction to be held “without reserve” contained a collateral offer to sell to the highest bidder. As the case was decided on different grounds this principle was not binding on later courts. Amazingly it took over 100 years before the courts finally decided this point in Barry v Davies.
A mere statement of the minimum price at which a party is willing to sell does not amount to an offer ([1893] AC 552 also Gibson v Manchester County Council [1979] 1 All ER 972).
An offer should be made on definite terms
Generally speaking, the courts will not enforce offers that are vague and indefinite.
In the case of Loftus v Roberts an actress was offered of a role in a play - the salary was to be “at the West End rate”. The court held that this was too uncertain to be an offer and a valid contract had not been formed.
It must be aware that the courts have demonstrated considerable flexibility in this area.
In Hillas & Co. Ltd v Arcos Ltd ((1932) LT 503), the House of Lords upheld a contract for the sale of a “fair specification” of timber. Although it was argued that this phrase was too vague and imprecise. The court held that the contract was between parties who were experienced in the timber trade and who;
“undoubtedly attributed to the words….. some meaning which was precise or capable of being made precise.” - Per Lord Tomlin
McKendrick excellently sums up this complex area:
“On the one hand, the judges do not wish to be seen to be making the contract for the parties. On the other hand, they are reluctant to deny legal effect to an agreement that the parties have apparently accepted as valid and binding.” (McKendrick, E. Contract Law, Text Cases and Materials 2003 OUP First Edition )
