FORMATION OF A CONTRACT
Fisher v Bell (1960)
A shopkeeper displayed a flick knife with a price tag in the window. The Restriction of Offensive Weapons Act 1959 made
it an offence to 'offer for sale' a 'flick knife'. The shopkeeper was prosecuted in the magistrates' court but the Justices
declined to convict on the basis that the knife had not, in law, been 'offered for sale'.
This decision was upheld by the Queen's Bench Divisional Court. Lord Parker CJ stated: "It is perfectly clear that according
to the ordinary law of contract the display of an article with a price on it in a shop window is merely an invitation to treat.
It is in no sense an offer for sale the acceptance of which constitutes a contract."
PSGB v Boots (1953)
The defendants' shop was adapted to the "self-service" system. The question for the Court of Appeal was whether the sales
of certain drugs were effected by or under the supervision of a registered pharmacist. The question was answered in the affirmative.
Somervell LJ stated that "in the case of an ordinary shop, although goods are displayed and it is intended that customers
should go and choose what they want, the contract is not completed until, the customer having indicated the articles which
he needs, the shopkeeper, or someone on his behalf, accepts that offer. Then the contract is completed."
Carlill v Carbolic Smoke Ball Co (1893)
An advert was placed for 'smoke balls' to prevent influenza. The advert offered to pay £100 if anyone contracted influenza
after using the ball. The company deposited £1,000 with the Alliance Bank to show their sincerity in the matter. The plaintiff
bought one of the balls but contracted influenza. It was held that she was entitled to recover the £100. The Court of Appeal
(a) the deposit of money showed an intention to be bound, therefore the advert was an offer;
(b) it was possible to
make an offer to the world at large, which is accepted by anyone who buys a smokeball;
(c) the offer of protection would
cover the period of use; and
(d) the buying and using of the smokeball amounted to acceptance.
ACCEPTANCE OF A CONTRACT
Felthouse v Bindley (1862)
The plaintiff discussed buying a horse from his nephew and wrote to him "If I hear no more about him, I consider the horse
mine …" The nephew did not reply but wanted to sell the horse to the plaintiff, and when he was having a sale told the
defendant auctioneer not to sell the horse. By mistake the defendant sold the horse. The plaintiff sued the defendant in the
tort of conversion but could only succeed if he could show that the horse was his.
It was held that the uncle had no right to impose upon the nephew a sale of his horse unless he chose to comply with the
condition of writing to repudiate the offer. It was clear that the nephew intended his uncle to have the horse but he had
not communicated his intention to his uncle, or done anything to bind himself. Nothing, therefore, had been done to vest the
property in the horse in the plaintiff. There had been no bargain to pass the property in the horse to the plaintiff, and
therefore he had no right to complain of the sale.
TERMINATION OF THE OFFER
Errington v Errington and Woods (1952)
A father bought a house on mortgage for his son and daughter-in-law and promised them that if they paid off the mortgage,
they could have the house. They began to do this but before they had finished paying, the father died. His widow claimed the
house. The daughter-in-law was granted possession of the house by the trial judge and the Court of Appeal.
Denning LJ stated: "The father's promise was a unilateral contract - a promise of the house in return for their act of
paying the instalments. It could not be revoked by him once the couple entered on performance of the act, but it would cease
to bind him if they left it incomplete and unperformed, which they have not done. If that was the position during the father's
lifetime, so it must be after his death. If the daughter-in-law continues to pay all the building society instalments, the
couple will be entitled to have the property transferred to them as soon as the mortgage is paid off; but if she does not
do so, then the building society will claim the instalments from the father's estate and the estate will have to pay them.
I cannot think that in those circumstances the estate would be bound to transfer the house to them, any more than the father
himself would have been."
Price v Easton (1833)
Easton made a contract with X that in return for X doing work for him, Easton would pay Price £19. X did the work but Easton
did not pay, so Price sued. It was held that Price's claim must fail, as he had not provided consideration.
Balfour v Balfour (1919)
The defendant who worked in Ceylon, came to England with his wife on holiday. He later returned to Ceylon alone, the wife
remaining in England for health reasons. The defendant promised to pay the plaintiff £30 per month as maintenance, but failed
to keep up the payments when the marriage broke up. The wife sued. It was held that the wife could not succeed because: (1)
she had provided no consideration for the promise to pay £30; and (2) agreements between husbands and wives are not contracts
because the parties do not intend them to be legally binding.
Merrit v Merrit (1970)
The husband left his wife. They met to make arrangements for the future. The husband agreed to pay £40 per month maintenance,
out of which the wife would pay the mortgage. When the mortgage was paid off he would transfer the house from joint names
to the wife's name. He wrote this down and signed the paper, but later refused to transfer the house.
It was held that when the agreement was made, the husband and wife were no longer living together, therefore they must
have intended the agreement to be binding, as they would base their future actions on it. This intention was evidenced by
the writing. The husband had to transfer the house to the wife.