hi folks and welcome back to contact law these are the videos for offer and acceptance and this is video number two the first video had a little look at the whole notion of offer and acceptance why we need it what's it for what does it do for us and in this video we are going to be looking more closely at the whole concept of offer okay and all the principles that are associated with that so let's have a look now at the offer okay we all know pretty much what an offer is in lay terms you know somebody makes a proposal to you to do something okay go make you an offer you can't refuse I'm gonna make a mark again with you however in legal terms an offer that could potentially bind a party legally has no a few hallmarks it has to be a statement of terms okay it has to propose that the offer or and the offeree do some stuff in exchange for each other okay it has to be made by the offer or to the offeree only qualification to that really is if you know an authorized agent makes the offer offer to the offeree and here it is again that crossover with the other elements that are required for contract formation it has to be accompanied by the intention to be legally and contractually bound by the offer okay so if you've got those three things you're more than likely a way in terms of and offer having been made in a legal sense it doesn't have to be in any particular format it may be verbal words spoken words on the page you could email someone it could be by conduct so there's you know an endless number of ways that an offer mainly made essentially it has to convey the statement of term it has to come from one party to the contract the other fraud offeree it has to be serious it has to be that intention to create legal relations what is not an offer you know three main groupings here of case law that have filtered down for us firstly a mere supply of information is not an offer invitations to treat usually not an offer and mere puff is not an offer so let's take those in turn mere supply of information it's only going to be an offer capable of acceptance in legal terms if it is a firm promise to do or not do something and that might bring smells there from Karl Engels case where they were talking about a firm promise is this a real promise or not what does that imply a promise implies intention to create legal relations so again you see that intertwining of concepts here so firm promise has that intent there if a party is just simply saying please tell me more you know give me more information then the other party provides it that's not going to be an offer capable of acceptance okay and happy in Phase II is just one example of that so the inquiry was two prong will you sell us one pen what she lowers price the response interestingly was nothing in relation to the first inquiry about whether they were prepared to sell and lowest price of a pen nine hundred pounds and the the purported purchaser no demon said yes please we agreed to buy for that price now was that an offer capable of acceptance no they had given the lowest price they had communicated the lowest price but I hadn't crucially indicated whether they were prepared to sell and so it lacked that foundation of intention to be bound in this whole scenario so obviously no offer there just a supply of information invitations to treat brilliant Old English phrase treat is basically the equivalent to deal so an invitation to treat is an invitation to start dealing start negotiations on how about it why don't you make me an offer okay so there's no intention at that point to be bound by anything that you're saying it's really just hey what do you think about this generally okay um I love some of the some of the equivalent words that some of the judges have referred to in terms of invitation to treat an offer to chaffeur is probably my personal favorite but it all means the same thing just statements that are intended to get the ball rolling or conduct that's intended to get the ball rolling obviously because there's no intend to be bound an invitation to trick can't be accepted okay why is there this whole notion of invitations to treat because often a seller will commence this kind of dialogue with potential purchasers and what they want to do is drum up business but they don't necessarily want to be strapped in to having to be you contractually bound to each person that comes up to them in order to deal what they want to do is have that person make them offers which they can then accept or reject because the reality is that they might not have enough stock to go around for all of the people that wish to deal with that particular seller and in that case you know the seller would be if an invitation to treat was actually an offer and you had a whole heap of acceptances you ran out of stock and then you're going to be potentially breaching a whole heap of contracts where people have placed orders and you can't fill them so what you need to do is have that step before offer that is the negotiation phase and that is where invitations to treat seat types of invitation to treat okay we have various different streams of case law that have categorized in different ways that you can convey an invitation to treat and again you've got to bear in mind these principles are really just rules of thumb they are not hard and fast rules so while I might go through here and say generally this is the case and generally that is the case that is about as much certainty as we can get out of the guidance here because it really will all come down to the particular language used by any particular invitation to treat as to whether it succeeds and is just an invitation to treat or whether in fact it is construed by a court later on possibly as an rigid inch true-blue offer okay a firm promise if you will so in Carlile's case you know be referring to that a few times today it's probably the most famous hashtag fail in terms of saying no no no no we never really intended this advertisement to be an offer it was just you know it was to drum up business so what were the things that flag to the court that this was actually an offer and not just an invitation to treat well you probably be able to rattle them off but it was the fact that they did see this firm promise okay it wasn't just hey how about it let's talk it was if you buy our product and you use it as instructed and then you get the flu or a cold we will pay you 100 pounds clear as day I do this I will do this firm from us again it intersects with that notion of intention to create legal relations and the fact also that they deposited a thousand pounds at a bank as virtual surety for their sincerity in the matter so the colors really the exception rather than the rule and this is why things are I mean these these prints those are only really guidelines most advertisements by and large will be just invitations to treat and that's the same whether the imitation to treat is placed in a catalogue newspapers on the Internet in magazines same kind of treatment given by the courts to all of that conduct partridge in Crittenden it's just one early example in a periodical for British obviously periodical we had an advertisement for Breville French and hens 25 shillings each now unfortunately they were considered wild birds and you weren't allowed to offer them for sale or sell them someone bought one of these after seeing the ads the question was was mr. partridge no pun intended this is an ad about birds was he guilty of offering a warbird sale and they said no not at all this was not an offer this was simply an invitation to treat the purchase of may the offer and mr. partridge accepted so that is generally speaking the treatment that courts will give an invitation to treat in the form of an advertisement display of goods again much of the pragmatism coming through here in terms of the rationale for invitations to treat and the Bhoots case was a very early 1952 case there as you can see of this new fangled thingy called a self-serve store this was just about the time that supermarkets were starting to happen and the whole notion of customer self-service was kind of taking off around the same time as a lot Ian Kruger which you will cover in and contract B and the question there was was the pharmacy in fact infringing the prohibition on selling poisons without pharmaceutical supervision and the court there said no they're not because when the customer actually selects the goods for themselves Quorra off the shelf they are not accepting the pharmacies offer to sell what's happening is the display of goods constitutes an invitation to trip hey let's do business you take the thing off the shelf you put it in your basket you go up to the cashier and the customer then makes the offer to the cashier now at that point the pharmacist was there and they could say yea or nay to the transaction and if they said fine then payment well Karen and the deal was concluded so at that point a contract was formed and not earlier when the customer took the item off the shelf and put it in their basket so no no breach of the prohibition there so that's the display of goods issue so auctions are the next type of invitation to treat we need to look at you can split them into two broad groups the cases they'll deal with either auctions that have a reserve or options that don't have asset reserved for those that don't know what a reserve is it's just the price that the seller sets at which they will be prepared to actually sell the item okay so we're an auction has a set reserve the vendor has told the auctioneer you know anything under the hundred dollars for example I'm not going to sell and if it doesn't if the bidding doesn't reach a hundred dollars the item will be passed in okay now where you have an auction with a set reserve generally speaking they are just going to be invitations to treat so the advertisement for the option itself will be an invitation to treat a call for bids by the auctioneer again will be an invitation to treat how about it do you want to bid it is a bead by the parties present and usually registered for the auction that will constitute the offer and as only when the auctioneer bangs down the hammer onto the gavel that the sale is actually completed and the vendor accepts the bidders offer okay so all invitations to treat right up until the bitter making them bid and then they haven't been knocked down auctions with no set reserve are a little less clear because you would think that as between the auctioneer and the bidder there was a clearer indication that the item was going to be actually up for sale the moment that someone bid because an auction without a reserve is basically the vendor saying as long as someone bids on this I am going to actually sell it to them so in Warlow in Harrison we had a pony that was put up for sale at an auction without the reserve so as long as someone bid no the horse was going to get sold and bidding happens and the plaintiff thinks I'm the highest bidder I'm gonna win this horse and then all of a sudden the vendor comes in and makes a bid themselves for the wars and the auctioneer does not knock the horse down to what effectively was the highest bonafide bidder okay they knocked it down to the vendor themselves that come in with the final highest bid and what the plaintiff argued was hang on a minute an option without a reserve effectively constitutes a pledge by the auctioneer to the bidders that they will knock down that item to the highest bona fide a bidder here the vendor themselves bid how is that a bona fide a butte and the court agreed and they said hang on a minute the auctioneer should be liable and the auctioneer was liable so they breached that pledge to the bidders at the auction without a reserve that they would knock the item down to the highest bone Friday you know um in terms of more recent treatment courts have kind of backed away from that a little bit and in a GCM acordes you had a court saying no hang on a minute we we actually think that options without reserving just a subset of options generally and don't really deserve any special treatment so here I guess good example of the fact that these are only just guidelines and it will often be a particular cork with particular facts in front of them that will decide a certain way so internet options really aren't treated any differently to normal options the likes of eBay don't really change things a whole lot smilin Thomas just shows us that principle rather large amount there one hundred fifty thousand dollars was paid for a plane and the ordinary action principles were applied um this is probably a good time as any to stop the video now and I think we'll top this video in terms of offer we will chop this video into two parts and I will see you in the next video for part three and we will finish off our discussion on offer bye guys