Podcast: the Fair
Bob is a stamp dealer. On Monday he puts an advert on his website stating, ‘Utopian Penny Red Stamp, one only, £2,000’.
Later that day, Alan, a stamp collector, telephones Bob and says, ‘The Utopian Red for sale, I’ll give you £1,500 for it’. Bob replies, ‘I cannot accept less than £1,750, but since you’ve been a good customer in the past, I won’t sell it to anybody else before Saturday. Let me have a reply by Friday if you want it.’ Alan says, ‘Thanks, that’s good of you – remind me to buy you a drink when I see you. I’ll think about it and let you know.’
At 7.30 am on Wednesday, Alan sends Bob an email saying, ‘Ok, I accept your offer to sell the Utopian Red for £1,750 – when can I pick it up?’ Unfortunately Bob’s email system diverts this email to his ‘junk mail’ folder, so that he does not read it. At 2 pm on Wednesday Bob sells the stamp to Charles for £1,800.
On Thursday Alan’s wife meets Charles’s wife at the supermarket. Charles’s wife complains about the amount of money Charles has been spending on stamps, including a Utopian Red, which he has just bought from a dealer. Alan’s wife reports this to Alan, who immediately sends a further email to Bob, confirming his previous message. Once he has sent this he notices an email from Bob in his inbox. In this email Bob says that he is having to withdraw his offer to Alan, because he has accepted a better offer from Charles.
Advise Alan.
Podcast: the Fair
The first question to consider in advising Alan is whether Bob’s advertisement is an offer. Advertisements can be offers, as is shown by Carlill v Carbolic Smoke Ball Co (1893). In this case, the Smoke Ball Co advertised its smoke balls as able to prevent the ‘flu, and offered £100 to anyone who caught the ‘flu after using them. Mrs Cargill used the balls but then caught the ‘flu. She sued the company. The court held that the advertisement was intended to be an offer, as shown by the company’s statement that it had deposited £1,000 with a bank to meet any claims. Mrs Cargill was successful in her claim. (1) The status of the advertisement is a good place to start, but the essay would benefit from a short introductory paragraph, rather than plunging straight in to the first issue. Too much space is given to describing Carlill v Carbolic Smoke Ball Co, which, as the next paragraph recognises, is clearly distinguishable.
A case that is more relevant to Bob’s advertisement is Fisher v Bell (1961), in which the display of a flick-knife in window was held to be an invitation to treat rather than an offer. This approach was applied in Partridge v Crittenden (1968), where a newspaper advertiser offered bramblefinches for sale at 25 shillings each, and was charged with an offence under the Protection of Birds Act 1954 of offering a wild bird for sale, but he was not convicted because the court held that this advertisement was not an ‘offer’ but an ‘invitation to treat’, because the offeror did not have an unlimited supply of wild birds, and so couldn’t have intended to sell one to everyone who replied ‘accepting’ his ‘offer’. (2) This paragraph gets to the right point (Partridge v Crittenden) after an unnecessary reference to Fisher v Bell. The second sentence is far too long – it is much better to write in shorter sentences, as this is likely to make your meaning clearer.
Assuming that Bob’s advertisement is an invitation to treat, the next point to consider is the telephone conversation between Alan and Bob. Alan says that he will pay £1,500 for the stamp, but Bob replies that he is only prepared to accept £1,750. Alan has made an offer to buy, and Bob has responded with a counter offer. Offers and counter offers are dealt with by Hyde v Wrench (1840), in which a farm was offered for sale at £1,000. A prospective buyer offered £900, which was rejected by the owner. The buyer later tried to accept the original offer to sell at £1,000. It was held that he could not, because his counter offer of £900 had destroyed the original offer, so that it could no longer be accepted. From this it can be seen that Alan and Bob have made an offer and counter offer, but that neither of these has been accepted as yet. (3) Space is wasted here on a description of Hyde v Wrench, which will gain limited credit from the examiner. The concept of offer and counter offer is clearly important to the problem, but the particular issue dealt with by Hyde v Wrench (inability to accept previously rejected offers) is not
Bob says that he will keep his offer to sell at £1,750 open until the end of the week. On Wednesday, Alan sends Bob an email accepting this offer. The rule for posted acceptances is that they take effect on posting, as is shown by Adams v Lindsell (1818). In this case a letter offering to sell wool was misdirected. The offerees replied as soon as they received the letter, but because of the delays the owners sold the wool to someone else. It was held that a contract was made as soon as the letter of acceptance was posted. This was because, otherwise, the parties could go on for ever exchanging letters waiting for confirmation that their last letter had been received. The postal rule applies even where the letter is never delivered (Household Fire and Carriage Accident Insurance v Grant (1879)). So, if Alan had posted his acceptance to Bob, he would have a contract as soon as his letter was posted. But he sent an email rather than a letter and we must now consider whether the postal rule applies to emails. In Entores v Miles Far East Corporation (1955) Lord Denning held that making a contract by telex or fax was like shouting across a river. As a result the postal rule should not apply. So the postal rule will not apply to emails, assuming that it is treated in the same way as telex and fax messages. (4) Once again too much space is given to describing the facts of a case, Adams v Lindsell, which is of limited relevance, because it is unlikely to apply to the problem. More space should be given to Entores v Miles Far East Corporation, which is dealt with briefly and not very clearly.
Alan’s email is never read by Bob, so it cannot operate as an acceptance, though Alan may argue that Bob should have checked his junk mail folder, because it is not uncommon for emails to be misdirected as spam when they are not, and Bob should have been looking out for replies to his advert, especially from Alan. This is not a very strong argument, though, and I would not advise Alan to pursue it further. (5) This is a weak paragraph. It sets up an argument that is not based on any legal principle, only to reject it. It adds nothing to the answer, and would not gain any marks.
Another argument Alan could use is to say that his email should take effect once it is received on Bob’s computer, even though Bob does not read it. This would be using the decision in The Brimnes (1975), where it was suggested that instantaneous communications sent in office hours should be taken to be effective as soon as they are received. (6) This is a good point, which would have benefited from being dealt with at greater length. The case of Brinkibon v Stahag Stahal could also have been mentioned.
On Wednesday afternoon Bob sells the stamp to Charles, so he cannot now sell it to Alan. He has not, however, withdrawn his offer to sell to Alan at £1,750. So Alan is still entitled to accept that offer, if he does so before he is informed of Bob’s sale to Charles, which would clearly imply that Bob has withdrawn his offer to Alan. An offer can generally be revoked at any time until it has been accepted. This was established by Payne v Cave (1789). The revocation must be communicated to be effective. This was held in Byrne v van Tienhoven (1880), which was concerned with a revocation sent by telegram. It was held that it only took effect when it was communicated to the offeree, not when it was sent. (7) This is a generally good paragraph, which makes its points succinctly. On this occasion the answer rightly avoids giving too much detail on the facts of the cases.
We must now consider whether Alan’s second email, again accepting Bob’s offer to sell the stamp to him at £1,750, is effective before Bob has revoked his offer to Alan.
Before he sends this email he is told by his wife of her conversation with Charles’ wife to the effect that Charles has just bought a Utopian Red stamp from a dealer. This is a very vague statement and it should not be regarded as having any direct legal effect, though clearly it raises Alan’s concern that Bob may not have received his previous acceptance, and that is why he sends his second email. Once he has sent this he notices an email from Bob in his inbox. In this email Bob says that he is withdrawing his offer to Alan, because he has accepted a better offer from Charles. Because Alan only reads this email after he has sent his second acceptance to Bob, it comes too late to withdraw Bob’s offer. Alan has already accepted, and so has a contract for the stamp. (8) What is needed here is a reference to Dickinson v Dodds, and an explanation of why that case can be distinguished. As it stands the paragraph consists of unsupported assertions, which are inconsistent with the earlier view that emailed acceptances only take effect when read. He can claim the stamp from Charles, because he started negotiations with Bob before Charles had any dealings with Bob, and so his contract should take priority. (9) The final sentence of this paragraph is incorrect. Alan's remedy would be in damages against Bob; he would not be able to claim the stamp from Charles. Unless you are sure of your ground on remedies, it is probably better to say nothing, given that the problem is really about offer and acceptance.
As we have seen, the dealings between Bob and Alan have probably resulted in a contract, which Alan can enforce, but the final result would have to be determined by the court. (10) This is a weak conclusion, which adds nothing to the essay. Saying that the matter has to be decided by a court appears to be trying to avoid your obligation to come to a conclusion on the issues, and to give advice to Alan.