option. As mentioned above ‘consideration’ is money or money’s
worth. So if the offeree was to say to the offeror ‘I will pay you
$10 to keep your offer open (to me) for one month’ then a valid
option will come into effect – assuming of course that the offeror
agrees. The important point is that the offeree must pay
something for the right to have the offer remain open. If not, then
the offeror can revoke the offer at anytime even where she or he
has said they will keep the offer open for certain period. A case
demonstrating this area of law is Goldsborough Mort & Co Ltd v
Quinn. When reading this case do not concern yourself at this
stage with the meaning of the term ‘specific performance.(g) An offer can be made to one person, a class of persons or theworld at large. It is unusual to have an example of the latter (^)
because normally a communication to the world at large is an
invitation to treat. Again it depends on whether there was an
intention to be bound.
SELF ASSESSMENT EXERCISE 1
- What is the difference between an invitation to treat and an offer
to the World at large? - What is a Counter offer?
A famous case where an advertisement was an offer to the world at large
is Carlill v Carbolic Smoke Ball Company (1893).
Read this case carefully because it does illustrate the importance of the
central principle that a communication is an offer so long as there is an
intention to be bound. That intention can be found in circumstance
where at first glance there might have appeared to be an invitation to
treat. When reading the case note the grounds upon which the court
found that the advertisement was an offer.
(i) It may be relevant to determine to whom the offer is made as only
an offeree may accept the offer. For example if an offer is made
to a class of persons, only a member of that class (who is aware
of the offer) may accept the offer.
(ii) An offer will only be effective when it is communicated to the
offeree, when it is brought to the notice of the person to whom it
is made.