Law Illustrations, Legal Rights, Law of Contract

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Table of Contents

Introduction
Case Facts
Basic notions
Advice on legal rights
Conclusions
Reference List

Introduction

The development of the modern human society takes place under the strict control of various legal acts, laws, and regulatory documents that stipulate what should, and can, be done by a person in every particular situation and what should not be done under any normal circumstances. Law of contract is one of such regulations, and it is applied mainly in the spheres of business and economics. The contract law applied in the United Kingdom serves as the basis for the similar legislatures in the countries of the Commonwealth, as well as European states and the USA (Richards, 2007, pp. 3 – 4). The ideas of invitation to treat and an offer to the world as large are central to the contract law, and these ideas are rather helpful in examining and providing advice regarding the case under scrutiny.

Case Facts

The essence of the case under analysis lies in the fact that Games Plc, a seller of computer software and games, placed an advertisement in a local newspaper in order to boost the sales of its new product titled “Portable Games” (PG). The advertisement promised the PGs to be sold at £100 to the first ten persons to enclose cheques for the stated sum with their letters to the company or to arrive at the Games Plc store on the day when this special offer was effective, i. e. December 1^st. One of the case characters, Thomas, posted a letter to the company on the same day, and enclosed the required cheque. Another case character, Peter, arrived at the store and waited the whole night long for the store to open.

However, Games Plc came to know that the sale of PGs would be impossible due to goods shortage, and placed another advertisement on December 2^nd, according to which the special offer was considered annulled. Accordingly, Games Plc refused both to sell the games to Thomas and Peter for £100 and to compensate the expenses, material and moral, that both persons have faced.

Basic notions

General notions

As one can see, the major controversy of the case considered is that Games Plc assessed its advertisement in the newspaper as a mere invitation to treat, which was not legally or financially binding for it. At the same time, the customers of the company, and Thomas and Peter in particular, considered the advertisement to be an offer to the world at large. The main difference between the two is their legal force and consequences for both their producers and customers.

An invitation to treat

Thus, there are several definitions of the term “invitation to treat”, but their joint meaning is that this term has no binding meaning and is used to initiative negotiations on prices of certain goods: “An invitation to treat is an invitation to others to MAKE OFFERS which the person issuing the invitation to treat may accept or reject as they choose” (Dadybeen, 2004, p. 2). The cases that illustrate the point are, among others, Spencer v Harding (1870) LR 5 CP 561, Fisher v Bell [1961] 1 QB 394, Partridge v Crittenden [1968] 1 WLR 1204, and Pharmaceutical Society of Great Britain v Boots Cash Chemists (Southern) Ltd [1953] 1 QB 401, in which the courts ruled that by placing prices for their goods the defendant merely invited purchase offers, but not stated the final prices for their products. Accordingly, when a case is decided as an invitation to treat, all claims of a plaintiff are dismissed and a defendant’s actions are considered legal (Twig-Flesner, 2008, p. 6).

An offer to the world at large

However, when it comes to an offer to the world at large, also known as the offer to the public at large, the concepts of legal liability and binding character of the offer should be considered. Thus, scholars like Dadybeen (2004), Keenan (2007), and Riordan (2004) define an offer as a legally binding promise that becomes effective on its acceptance: “An offer is an undertaking by the offeror that he will be bound in contract if there is a proper acceptance of it” (Keenan, 2007, p. 272). The special attributes of such offers are specifically stated terms of contract provided the offers are accepted.

The case laws that exemplify the point include Harvela Investment Ltd v Royal Trust of Canada (Cl) Ltd [1986] AC 207 and the milestone case law in the English contract law practice, Carlill v Carbolic Smoke Ball Company [1893] 1 QB 256. In both cases, the court ruled that the defendants’ advertisements constituted offers to the world at large because specific instructions were provided for offer acceptance in those advertisements. Since the customers performed those actions and accepted the offers, the defendants were obliged to pay the plaintiffs the full amounts of money promised (Elliot, 2007, p. 262).

Advice on legal rights

Thomas’ rights

Drawing from the above presented definitions, Thomas has all legal rights to sue Games Plc for violating the contract terms the company offered through its newspaper advertisement. The point is that the discussed advertisement contained specific promises by Games Plc to perform actions in relation to the people who accept the offer by performing the activities specified in the advertisement. Such situation, according to Dadybeen (2004), Keenan (2007), and Riordan (2004), is the perfect illustration of an offer to the world at large being made and accepted by those to whom it is made. Accordingly, if the offer is made and accepted, a contract is concluded, and the company that made this offer is legally bound to fulfill its promises and legal liabilities to the contract (Keenan, 2007, p. 272; Richards, 2007, p. 16).

Peter’s rights

Quite similar consideration of Peter’s rights in the case can be carried out on the basis of the same legal definitions of an invitation to treat and an offer to the world at large. In more detail, the advertisement by Games Plc offered games at considerably low prices to ten first persons who would attend the store of the company on the specified day. Based on the ideas by Riordan (2004) and Richards (2007), these elements of the advertisement can be considered as constituents of an offer to the world at large.

Specifically, the promise of a game sold at £100 can be viewed as a reward for those who accept the offer, while sending a cheque for the stated sum or attending the store are the instructions regarding the offer acceptance. Based on this, Peter can rightfully demand compensation from Games Plc, as far as he accepted its offer, while the company violated the contract concluded between it and Peter as a result of the acceptance.

Contract law case illustrations

The already listed case laws exemplify the points with even better clarity. Harvela Investment Ltd v Royal Trust of Canada (Cl) Ltd [1986] AC 207 is the case in which the court ruled that the advertisement placed by the defendants, i. e. the Royal Trust of Canada, contained actual agreement to accept the highest bid for its shares and therefore could not be considered a mere invitation to treat and is legally binding.

Another case law example is the famous Carlill v Carbolic Smoke Ball Company [1893] 1 QB 256 case, considered to be the first court decision that admitted the possibility of making an offer to the world at large through a media advertisement. Similarly to Games Plc, Carbolic Smoke Ball Company advertised its product in a newspaper. The company made a special offer and promised a £100 reward to those who would use its products and get unsatisfactory results. The court saw all elements of an offer and obliged the company to pay the promised rewards to all customers that accepted the offer.

Thus, in Games Plc’s advertisement all elements of the offer, i. e. instructions of its acceptance and reward for it, are observed, and Thomas and Peter can demand the payment or the product from the company through the court. The point here is that the court should consider the advertisement to be an offer on the basis of the precedent provided in the case laws presented as examples. In Carlill v Carbolic Smoke Ball Company [1893] 1 QB 256, the court obliged the defendant to pay the promised £100 reward to those dissatisfied with their product’s efficiency, i. e. to those who accepted the offer. Similarly, Thomas and Peter, as persons who accepted the offer by Games Plc, should be compensated for the company’s violation of the contract that followed their offer acceptance.

Conclusions

So, the whole above discussion can be concluded by the statement that both Thomas and Peter have legal rights to demand compensation from Games Plc for the contract violation this company has carried out. The reasons for such a statement include the theoretical consideration by reputable scholars that allows differentiating between an invitation to treat and an offer to the world at large. In addition, specific examples from the English contract law and case laws prove the point that in Games Plc case, an offer was observed, and therefore the company is liable to all those who accepted it in a specified way.

Reference List

Books and Web sites

Dadybeen, S., 2004. Legal and regulatory framework: for business in the UK. iUniverse.

Elliot, C., 2007. Contract Law. 6^th ed. London: Pearson Education.

Keenan, D., 2007. Smith & Keenan’s English law: text and cases. London: Pearson Education.

Richards, P., 2007. Law of contract. London: Pearson Education.

Riordan, J., 2004. Part III – Offers. [online] Contracts. Web.

Twig-Flesner, C., 2008. The Europeanisation of Contract Law. Routledge.

Case Laws

Carlill v Carbolic Smoke Ball Company [1893] 1 QB 256.

Fisher v Bell [1961] 1 QB 394.

Harvela Investment Ltd v Royal Trust of Canada (Cl) Ltd [1986] AC 207.

Partridge v Crittenden [1968] 1 WLR 1204.

Pharmaceutical Society of Great Britain v Boots Cash Chemists (Southern) Ltd [1953] 1 QB 401.

Spencer v Harding (1870) LR 5 CP 561.

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