Bilateral Agreement Cases

Step 1: Does the communication amount to an offer? 

Gibson v Manchester City Council (1979) - Distinguish an offer from an invitation to treat. The language used may lack the necessary firmness required to qualify as an offer. 

Grainger & Son v Gough (1896) - Introduced the limited stocks argument. If a brochure constituted an offer, the acceptance would be the customer's order and the supplier would be bound to supply when his stocks were necessarily limited. The law considers that in a bilateral situation the supplier should have control over the making of the agreement. 

Partridge v Crittenden (1968) - justified the conclusion that advertisements were an invitation to treat using the limited stocks argument. 

Fisher v Bell (1961) - display of goods in a shop window is an invitation to treat, and the customer taking the goods to the counter is an offer.

Pharmaceutical Society of Great Britain v Boots Cash Chemists (1953) - display of goods on supermarket shelves is an invitation to treat, and the shop controls the making of the agreement via its acceptance of the customers offer. 

Note: Retailers' websites are likely to be invitations to treat, but there is no authority on this point yet. Regulation 12 of the E-Commerce (EC Directive) Regulations 2002 suggest that a customer's order may well be the offer so that the website would be an invitation to treat. 

Spencer v Harding (1870) - requests for bids or tenders are invitations to treat, which enables the requestor to control the making of the bilateral contract to sell, buy or perform a service. 

Harris v Nickerson (1873) - requests for bids at an auction or advertisement that an auction is to be held. It is the auctioneer or advertiser who controls agreement by determining acceptance. The goods can be withdrawn from sale at a general auction, or an advertised auction can be cancelled, without incurring any liability. 

Step 2: Was the offer communicated?

Step 3: Did the offeree accept that offer or was the offer withdrawn before acceptance? 

Step 4: Can the response to the offer constitute an acceptance in law? 

Hyde v Wrench (1840) - If any of the terms are changed or added to by the offeree, then this constitutes a counter-offer, and the original offer is destroyed. This supports the Mirror-Image Rule (where all responses must correspond with the exact terms of the offer in order to be an acceptance). 

Stevenson, Jacques & Co. v McLean (1880) - if the response asks for more information, and does not change any of the specified terms from the offer, then this is a request for more information and does not destroy the original offer (it is not a counter-offer). 

Butler Machine Tool Co. Ltd v Ex-Cell-O Corporation (England) Ltd (1979) - applied Hyde v Wrench and meant that the buyer had altered the terms of the contract, meaning that it was a counter-offer and there had been no acceptance. The counter-offer itself was available to be accepted by the other…