- Acceptance should be communicated: Felthouse v. Bindley ~
In this case, the petitioner, Mr. Paul Felthouse wanted to purchase a horse from his nephew, but the price he offered to pay for the horse was less than that his nephew was willing to sell it for. The horse, therefore, was still in his possession. The Uncle communicated his offer through a letter, saying, “If I hear no more about him, I consider the horse mine at £30.15s” The nephew could not respond to the letter because he was busy with an auction on his farm. Though he asked the auctioneer, Mr. Bindley, not to auction the horses, he accidentally did. Mr. Felthouse then sued the defendant for conversion of his property. The defendant argued that the horse was not actually Mr. Felthouse’s property, as there existed no contract between him and his nephew at the time of the auction because Mr. Felthouse’s offer was not accepted by his nephew and the nephew’s silence cannot be considered to be an acceptance of the offer.
It was held that Mr. Felthouse did not have the ownership of the horse at the time of the auction, which is why he could not sue for conversion, as the offer he made was not actually accepted.
General Offer: Carlill v. Carbolic Smoke Balls Company ~
In this case, a company carried out advertisements about their product, carbolic smoke balls, that claimed that any person who took the smoke balls in the prescribed manner (i.e., three times daily for two weeks) will not catch influenza. In case someone does, the company promised to pay 100£ to them immediately. To show their sincerity regarding this offer, the company deposited a sum of 1000£ in a public bank. Now, the plaintiff, Carlill bought the smoke balls and used them as prescribed in the advertisement, but still ended up catching the flu. She filed a suit for the recovery of 100£ as promised in the advertisement. The company denied the payment saying there existed no contract between them and the plaintiff. It was held that a contract came into existence between the plaintiff and the company as soon as the plaintiff bought the smoke balls and used them as prescribed.
Offer and Invitation to Offer: Harvey v. Facey
In this case, the petitioner, Harvey communicated with the defendant, Facey, about a Hall Pen through telegram, saying “”Will you sell us Bumper Hall Pen? Telegraph lowest cash price-answer paid”. The same day, Facey responded with the price of the Pen to be £900. To which, the appellant replied, “We agree to buy Bumper Hall Pen for the sum of nine hundred pounds asked by you. Please send us your title deed in order that we may get early possession.” The defendant refused to sell at that price that they had initially quoted. It was finally held in this case that no contract came into existence between both the parties because their exchange of telegrams was merely an informational exchange where the appellant asked for the price of the Hall Pen and the defendant quoted the price. Therefore the appellant had no right to sue.
Offer and Counter Offers: Hyde v. Wrench ~
In this case, Wrench, the defendant offered to sell his farm to the petitioner, Hyde for £1000. The petitioner declined the offer. The defendant again reinstated his offer for selling the farm at £1000 to the petitioner’s agent stating that it is the final offer from their side. The petitioner, through a letter, offered to buy the farm for £950. The defendant refused to sell the farm at that price. The petitioner, several days later, offered to buy the farm at the initial price of £1000. The defendant did not send any agreement to that and refused to sell the farm, because of which the petitioner sued for breach of contract. It was held that no contract came to arise between the parties as the price was not agreed upon. Rather, offers and counter-offers were exchanged.
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