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Offer


Anna advertised for sale for $45,000 first appears like an offer.  However as Lord Herschell said in Grainger & Sons v Gough[1] that .a price list does not amount to an offer to supply an unlimited quantity・.  Hence advertisement for sale with price specified is legally an invitation to receive offers.  So it cannot be converted to binding obligation because they are not capable of acceptance: Partridge v Crittenden[2].  Consequently, Martin・s response at $42,500 was an offer to buy and Anna could either accept or reject.  In addition, Martin made no stipulation to the means of acceptance and as a general rule, acceptance should be communicated by the same means that were used to send the offer, here presumably by post. 

Anna agreed at $44,000 by letter and then changed her mind to accept Martin・s original offer $42,500 by fax next morning.  Anna・s letter was not really an acceptance but a rejection of Martin・s offer and substituted with a counter-offer to sell.  The effect was that Anna probably could not reconsider and accept the original offer: Hyde v Wrench[3] once the postal rule effected.  In fact it is not as postal rule only applies on contemplated communication of acceptance: Adams v Lindsell[4].  Therefore, Anna・s counter-offer is only effective and accepted after communication with Martin: Fitch v Snedaker[5].  So Martin・s offer remained open as the rejection had not come to his attention. 

As no means of acceptance was stipulated, Anna can use any other means provided that it is more advantageous to the offeror but will only be bound upon acknowledgement of the message conveyed.  According to the postal rule for instantaneous or near instantaneous communication, acceptance occurs when and where the offeror receives the communication: Entores Ltd v Miles Far East Corp[6].  The fact that Martin received the fax acceptance before the letter rejection is already sufficed to constitute a contract. 

Martin posted a letter agreeing to pay the asking price of $45,000 had revoked his original offer to buy and substituted with a new offer as in Hyde v Wrench[7], which is then up to Anna to either accept or reject.  Kay LJ stated in Henthorn v Fraser[8] that .an offer to sell is nothing until it is actually received・ specifying the necessity for communication of offer.  So Martin・s fresh offer is already immaterial here.  

Based on the above arguments, a contract has been formed at $42,500.

[1] [1896] AC 325 at 334

[2] [1968] 2 All ER 421

[3] (1840) 3 Beav 334; 49 ER 132

[4] (1818) 1 B & Ald 681; 106 ER 250

[5] 38 NY 248 (1868)

[6] [1955] 2 QB 327

[7] (1840) 3 Beav 334; 49 ER 132

[8] [1892] 2 Ch 27


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