Case Summary

Harvey vs. Facey (1893) AC 552

This Case Summary is written by Ishanvi Jain, a student of Galgotias University, Noida

Introduction

Harvey vs. Facey case is one of the important case law in contract law as it defines the difference between an invitation to offer and offer. In this case it is shown that the quotation of the price was held not to be an offer. Its importance is that it defined the difference between an offer and supply of information. In this case it is described that the indication of lowest acceptable price does not constitute an offer to sell, but it is considered as an invitation to enter into any negotiation. The defendants in this case were the owner the land, Bumper Hall Pen. And the plaintiffs were those who wanted to buy that land. The plaintiff sent a telegram to the defendant stating “Will you sell us the Bumper Hall Pen?” Telegraph the lowest price.” The defendants in return telegraphed them “the lowest price for Bumper Hall Pen is £900.” The plaintiffs then sent them the telegraph saying that “we agree to buy the Bumper Hall Pen for £900, send the details of the deeds”.

But then the defendants changed their mind and refused to sell their land to them. So the plaintiff sued them on the basis that the second telegraph sent by the defendant quoting the lowest price was the offer and same had been accepted by the plaintiff, and the contract was completed. But on the other hand defendants said that quoting the lowest price is not an offer which can be accepted. The Judicial Committee if the Privy Council held that the exchange of the above stated telegrams had not resulted in a contract. In the first telegram two questions were asked, first was regarding the willingness to sell the land and the second was about the price for which they can sell their land. And in the reply of this telegraph only the lowest price was sent which cannot be considered as offer to sell. In the third telegraph the plaintiffs agreed to buy the land and asked them to send the details of the deeds, which can be considered that they agreed to buy the land, which means that it is an offer and not the acceptance to offer. As the offer was not accepted so it cannot be considered as binding contract between two parties.

Facts

  1. Harvey who was running the partnership company in Jamaica wanted to buy the property owned by Facey who was also negotiating with the Mayor and Council of the Kingdom of Kingston City for the same property.
  2. On October 6th, 1893 appellant sent a telegram regarding the purchase of property to Mr. Facey who was travelling on the train on that day as he did not want that the property was sold to Kingston City.
  3. Telegram said “Will you sell us Bumper Hall Pen? Telegraph lowest cash price-answer paid.” Mr. Facey replied “Lowest price for Bumper Hall Pen£900.” In return, Mr. Harvey Replied “We agree to buy Bumper Hall Pen for the sum of nine hundred pounds asked by you. Please send us your title deed in order that we may get early possession.”
  4. Then Mr. Facey changed his mind and refused to sell the land to Mr. Harvey, on this basis Mr. Harvey sued him stating that there existed a contract between them and said that the telegram was an offer and he accepted it.

Issues Raised

  1. Was there an explicit offer from Mr. Facey to Mr. Harvey for the sale of the said property for the consideration of £900 and is it capable of acceptance?
  2. Was there a valid contract or not?
  3. Was the telegram advising the lowest price an offer capable of acceptance?

Judgement

The honourable Judges Bench reviewed the total matter of this case and upholding the Justice Curran’s verdict the Lordships held that the Telegraph 1 asks the respondent this willingness to sell the land and what is the lowest price of that land. But the respondent answered only the second part, and his willingness to sell the property was absent in the telegraph and therefore it cannot be expected to be binding upon him. Here the Court asserted that through the telegraph 3 the reply from the appellants cannot be considered an acceptance to the offer to sell them the land. So the respondent acceptance cannot be granted as a valid contract and actually no acceptance through any form was conveyed by respondent. The Privy Council held that there was no contract concluded between the parties. Facey had not directly answered the first question as to whether they would sell and the lowest price stated was merely responding to a request for information not an offer. There was thus no evidence of an intention that the telegram sent by Facey was to be an offer.

Conclusion

A valid contract requires a proposal and an acceptance to it and to make contract binding acceptance of the proposal must be notified to the proposer because a legally enforceable agreement required sureness to hold. This case clearly explains the differentiation between invitation to offer and offer and it also throws a light explaining the nature of the offer as it plays a very important role. A valid and concluded contract requires a proposal and an acceptance of the proposal. To make a contract binding it is necessary that the proposal must be accepted and also the acceptance of the proposal must be notified to the proposer. A mere statement contains no implied acceptance to hold. This is because a legally enforceable agreement requires certainty to hold. Here, in this case invitation to offer is an abstract concept which was realized clearly and expressly and this concept is improvising over the period of time. Now, I must say that the principle of invitation to offer is clearly distinguishable from an offer and it has played a crucial role to understand the nature of an offer.

Suggestions

This landmark case laid down the foundation of the concept “invitation to offer”, where a person barely think about the notion accepting the offer or not. Simply, we can say that when a person has not intimated his final desire to accept an offer, it is an invitation to offer. This clearly express that it is only mere formal proclamation of information on the terms on which the person may be willing to negotiate soon. Lack of consensus ad idem between the two parties is the primary reason for which this is not a complete offer. There was no valid contract between both the parties because in reply of the first telegraph the defendant answered only one of the two questions that is what is the lowest price of land and the answer was 900 pounds and it was only the reply of general information and only the invitation to offer but not an offer.

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