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Invitation to Treat


Plump¡¦s letter to Stamp Collectors Club (SCC) stated ¡¥I have for sale¡Kfor $6000¡¦ looks like an invitation to treat as a price does not amount to an offer to supply an unlimited quantity: Grainger & Sons v Gough[1].  If this is the case, Slick¡¦s letter on 7 April was merely an offer to buy and the cheque enclosed was immaterial.  Since an offer is not effective unless and until the offeree actually receives it: Fitch v Snedaker[2], Plump could either accept or reject upon receipt Slick¡¦s letter.  The fact that Fast¡¦s offering by telephone on 8 April was effective and accepted by Plump after their conversation.  Hence a contract is likely to be formed here.    

However Plump¡¦s letter also said ¡¥on the basis that the first person to take up my offer will have priority¡K¡¦ is more likely a limiting offer as it imposed that the offer could only be accepted by the first ¡¥acceptor¡¦ as only one contract could be performed: Patterson v Dolman[3].  In addition, it seems there was no stipulation of the means of communication for acceptance from Plump.  The offeree may communicate acceptance in any way he or she wishes.  But as Plump¡¦s letter indicated only the first acceptor would have priority to take his offer, this might imply that he would allow any means of communication of acceptance more advantageous to him. 

Slick posted his acceptance with cheque on 7 April is probably effective and faster than Fast according to postal rule as in Adams v Lindsell[4].  But as stated by Lord Herschell in Henthorn v Fraser[5], ¡¥it must have been within the contemplation of the parties that¡Kthe post might be used as a means of communicating the acceptance of an offer.¡¦  Otherwise, the acceptance is only effective when it comes to the notice of Plump before the offer terminates.  On the other hand, Fast¡¦s acceptance by telephone on 8 April reached Plump before Slick¡¦s letter was more advantageous means as what Plump intended was.  The acceptance therefore occurred in Adelaide when Plump received the communication according to postal rule for instantaneous or near instantaneous communication: Entores Ltd v Miles Far East Corp[6].  When to pay was immaterial as Plump did not stipulate this as one condition to form the contract.  Therefore it is sufficed to form a binding contract between Plump and Fast in this scenario.   

In the second scenario, as Plump said in his letter ¡¥The offer will expire on 21 April 2000¡¦ is an express stipulation that his offer received by SCC on 22 April automatically terminated.  Slick posted his letter of acceptance on 23 April was a purported acceptance, which failed to create a binding contract for lapse of time: Dickinson v Dodds[7]Thus Slick¡¦s acceptance voided the original offer and constituted a counter-offer to deal on terms identical to the original offer, but the option of accepting or rejecting has now passed to Plump. 

[1] [1896] AC 325 at 334

[2] 38 NY 248 (1868)

[3] [1908] VLR 354

[4] (1818) 1 B & Ald 681

[5] [1892] 2 Ch 27 at 33

[6] [1955] 2 QB 327

[7] (1876) 2 Ch D 463


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