Keenan and Riches’BUSINESS LAW

Chapter 7Introduction to the law of contract

and, in more recent times, the Internet, to sell their pro-
ducts direct to the public. Even if the word ‘offer’ is used,
the advertisement is still an invitation to treat.

Advertising a forthcoming auction sale does not amount

to an offer to hold it.

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Partridgev Crittenden(1968)

Partridge placed an advertisement in the Cage and

Aviary Birdsmagazine, which read ‘Bramblefinch cocks,

bramblefinch hens, 25s each’. A Mr Thompson replied to

the advertisement and was sent a bramblefinch hen.

Partridge was charged with ‘offering for sale’ a wild bird

contrary to the provisions of the Protection of Birds Act

1954 and was convicted at the magistrates’ court. His

conviction was quashed on appeal to the Divisional

Court of the Queen’s Bench Division. The court held that

since the advertisement constituted an invitation to treat

and not an offer to sell, Partridge was not guilty of the

offence with which he had been charged.

Comment. It should be noted that the word ‘offer’ did

not appear in the advertisement in this case. However, in

SpencervHarding(1870) a circular containing the word

‘offer’ was held to be an invitation to treat.

An advertisement placed in a newspaper or magazine
by a mail order firm constitutes an invitation to treat:
the customer makes the offer, which may be accepted or
rejected by the mail order firm.
Similar principles apply to electronic trading via the
Internet, otherwise known as e-commerce. Posting
advertisements on a website amounts to an invitation
to treat; by selecting the products and services required,
the customer is making an offer to buy, which may
be accepted or rejected by the seller. So if a company by
mistake advertises on its website £200 video recorders
for sale at £2, it could refuse to sell the goods at the
advertised price.
Although most advertisements will be treated as in-
vitations to treat, there are some situations where an
advertisement may be regarded as a definite offer, e.g. as
in Carlillv Carbolic Smoke Ball Co(1893).

3 Company prospectuses. When a company wishes to
raise capital by selling shares to the public, it must issue
a prospectus (an invitation to treat). Potential investors
apply for shares (the offer) and the directors then decide
to whom to allot shares (the acceptance).

Paynev Cave(1789)

The defendant made the highest bid for the claimant’s

goods at an auction sale, but he withdrew his bid before

the fall of the auctioneer’s hammer. It was held that

the defendant was not bound to purchase the goods.

His bid amounted to an offer which he was entitled to

withdraw at any time before the auctioneer signified

acceptance by knocking down the hammer. The com-

mon law rule laid down in this case has now been

codified in s 57(2) of the Sale of Goods Act 1979.

Harrisv Nickerson(1873)

The defendant, an auctioneer, advertised in the London

papers that a sale of various goods including office

furniture would take place in Bury St Edmunds. The

claimant travelled from London to attend the sale, but

the items of furniture he had been commissioned to

buy were withdrawn from the sale. It was held that the

defendant auctioneer was not obliged to compensate

the claimant for a wasted journey. Advertising that a sale

of certain items will take place is a mere declaration of

intention. It does not create a binding contract with any-

one who acts on the advertisement by attending the sale.

However, advertising that an auction will be ‘without

reserve’ amounts to an offer by the auctioneer that once

the auction has commenced the lot will be sold to the

highest bidder however low the bids might be (Warlow

v Harrison(1859) and more recently Barryv Heathcote

Ball & Co(Commercial Auctions)Ltd(2000)).

5 Tenders. Large undertakings, such as public authorit-

ies, often place contracts by inviting interested firms to

tender (offer) for the business. An invitation to tender

can give rise to a binding obligation on the part of the

inviter to consider tenders submitted in accordance with

the conditions of the tender.

4 Auctions.At an auction sale the call for bids by an

auctioneer is an invitation to treat. The bids are offers.

The auctioneer selects the highest bid and acceptance is

completed by the fall of the hammer.