BLOQUE II: JORNADAS PRÁCTICAS CON ALUMNOS

or an invitation to negotiate. Th e cases that are discussed in the following sections illustrate four commonplace transactions, namely (a) advertisements, (b) displays of goods in shops, (c) auctions, and (d) tenders.

(a) advertisements

Th e general rule applicable to advertisements is that, at least in the case of bilateral contracts, an advertisement constitutes an invitation to negotiate and not an off er. Th us, to take the standard example, suppose that a vendor of goods advertises them for sale in a local news-paper. Th e advertisement will generally be regarded as an invitation to negotiate and not an off er (see Partridge v. Crittenden [1968] 1 WLR 1204). Th e principal reason for this is said to be the need to protect the party placing the advertisement from incurring a liability in contract to every person who is willing to purchase the goods at the stipulated price. Th us in

the case of a price-list distributed by a merchant ‘among persons likely to give orders’ and concluded that:

[t]he transmission of such a price-list does not amount to an offer to supply an unlimited quantity of the wine described at the price named, so that as soon as an order is given there is a binding contract to supply that quantity. If it were so, the merchant might fi nd himself involved in any number of contractual obligations to supply wine of a particular description which he would be quite unable to carry out, his stock of wine of that description being nec-essarily limited.

[t]he transmission of such a price-list does not amount to an offer to supply an unlimited quantity of the wine described at the price named, so that as soon as an order is given there is a binding contract to supply that quantity. If it were so, the merchant might fi nd himself involved in any number of contractual obligations to supply wine of a particular description which he would be quite unable to carry out, his stock of wine of that description being nec-essarily limited.

While there is obvious force in the point that there is a need to protect the vendor from poten-tial multiple liability, this could have been done in another way. It did not demand that the advertisement be classifi ed as an invitation to negotiate. It could have been done by treating the advertisement as an off er but then implying into that off er a term to the eff ect that the off er can only be accepted ‘while stocks last’. One consequence of choosing to regard an advertise-ment as an invitation to negotiate rather than an off er is that the party who responds to the advertisement and is willing to purchase the goods at their advertised price cannot compel the advertiser to sell the goods to him at the stated price. He can only make an off er which the vendor can then choose either to accept or to reject. It has also had unfortunate conse-quences in the context of the criminal law. For example, in Partridge v. Crittenden (discussed earlier) the defendant was charged with an off ence of off ering wild birds for sale contrary to the Protection of Birds Act 1954. Th e advertisement placed by the defendant stated ‘Quality British A.B.C.R . . . Bramblefi nch cocks, Bramblefi nch hens, 25s each’. It was held that he had not com-mitted the off ence with which he was charged because he had not off ered the birds for sale; the advertisement was simply an invitation to negotiate. Legislators who wish to catch those who advertise certain goods for sale must therefore extend the scope of the off ence beyond those who ‘off er’ goods for sale (thus the Consumer Protection from Unfair Trading Regulations 2008 (SI No 2008/1277) makes provision for a range of off ences which may be committed by a trader who provides misleading information of various types to consumers).

Th e conclusion that an advertisement is an invitation to negotiate is not, however, an invariable one. Cases can be found in which the courts have concluded that an advertise-ment is an off er and not an invitation to negotiate. Th e leading case, to which we now turn, is an example of a unilateral contract. Th e inference that an advertisement is an off er rather than an invitation to negotiate will oft en be more readily drawn in the context of a unilateral contract.

Carlill v. Carbolic Smoke Ball Company

[1893] 1 QB 256, Court of Appeal

The defendants advertised their medicinal product, the now infamous ‘carbolic smoke ball’, in various newspapers in the following terms:

‘100l. reward will be paid by the Carbolic Smoke Ball Company to any person who contracts the increasing epidemic infl uenza, colds, or any disease caused by taking cold, after having used the ball three times daily for two weeks according to the printed directions supplied with each ball. 1000l. is deposited with the Alliance Bank, Regent Street, shewing our sincerity in the matter.

During the last epidemic of infl uenza many thousand carbolic smoke balls were sold as pre-ventives against this disease, and in no ascertained case was the disease contracted by those using the carbolic smoke ball.

One carbolic smoke ball will last a family several months, making it the cheapest remedy in the world at the price, 10s., post free. The ball can be refi lled at a cost of 5s. Address, Carbolic Smoke Ball Company, 27, Princes Street, Hanover Square, London.’

The plaintiff, in reliance upon this advertisement, purchased and used the product as directed but subsequently caught infl uenza. She sued for payment of the £100 and succeeded before Hawkins J. The defendants appealed to the Court of Appeal but the appeal was dismissed. It was held that the terms of the advertisement constituted an offer, the terms of which were accepted by the plaintiff with the result that she was entitled to recover the promised £100.

The defendants advertised their medicinal product, the now infamous ‘carbolic smoke ball’, in various newspapers in the following terms:

‘100l. reward will be paid by the Carbolic Smoke Ball Company to any person who contracts the increasing epidemic infl uenza, colds, or any disease caused by taking cold, after having used the ball three times daily for two weeks according to the printed directions supplied with each ball. 1000l. is deposited with the Alliance Bank, Regent Street, shewing our sincerity in the matter.

During the last epidemic of infl uenza many thousand carbolic smoke balls were sold as pre-ventives against this disease, and in no ascertained case was the disease contracted by those using the carbolic smoke ball.

One carbolic smoke ball will last a family several months, making it the cheapest remedy in the world at the price, 10s., post free. The ball can be refi lled at a cost of 5s. Address, Carbolic Smoke Ball Company, 27, Princes Street, Hanover Square, London.’

The plaintiff, in reliance upon this advertisement, purchased and used the product as directed but subsequently caught infl uenza. She sued for payment of the £100 and succeeded before Hawkins J. The defendants appealed to the Court of Appeal but the appeal was dismissed. It was held that the terms of the advertisement constituted an offer, the terms of which were accepted by the plaintiff with the result that she was entitled to recover the promised £100.

Bowen LJ

. . . We were asked to say that this document was a contract too vague to be enforced.

The fi rst observation which arises is that the document itself is not a contract at all, it is only an offer made to the public. The defendants contend next, that it is an offer the terms of which are too vague to be treated as a defi nite offer, inasmuch as there is no limit of time fi xed for the catching of the infl uenza, and it cannot be supposed that the advertisers seri-ously meant to promise to pay money to every person who catches the infl uenza at any time after the inhaling of the smoke ball. It was urged also, that if you look at this document you will fi nd much vagueness as to the persons with whom the contract was intended to be made—

that, in the fi rst place, its terms are wide enough to include persons who may have used the smoke ball before the advertisement was issued; at all events, that it is an offer to the world in general, and, also, that it is unreasonable to suppose it to be a defi nite offer, because nobody in their senses would contract themselves out of the opportunity of checking the experiment which was going to be made at their own expense. It is also contended that the advertise-ment is rather in the nature of a puff or a proclamation than a promise or offer intended to mature into a contract when accepted. But the main point seems to be that the vagueness of the document shows that no contract whatever was intended. It seems to me that in order to arrive at a right conclusion we must read this advertisement in its plain meaning, as the public would understand it. It was intended to be issued to the public and to be read by the public. How would an ordinary person reading this document construe it? It was intended unquestionably to have some effect, and I think the effect which it was intended to have, was to make people use the smoke ball, because the suggestions and allegations which it contains are directed immediately to the use of the smoke ball as distinct from the purchase of it. It did not follow that the smoke ball was to be purchased from the defendants directly, or even from agents of theirs directly. The intention was that the circulation of the smoke ball should be promoted, and that the use of it should be increased. The advertisement begins by saying that a reward will be paid by the Carbolic Smoke Ball Company to any person who contracts the increasing epidemic after using the ball. It has been said that the words do not apply only to persons who contract the epidemic after the publication of the advertisement, but include persons who had previously contracted the infl uenza. I cannot so read the adver-tisement. It is written in colloquial and popular language, and I think that it is equivalent to this: ‘100l. will be paid to any person who shall contract the increasing epidemic after having used the carbolic smoke ball three times daily for two weeks’. And it seems to me that the way in which the public would read it would be this, that if anybody, after the advertisement was published, used three times daily for two weeks the carbolic smoke ball, and then caught cold, he would be entitled to the reward. Then again it was said: ‘How long is this protection to endure? Is it to go on for ever, or for what limit of time?’ I think that there are two construc-tions of this document, each of which is good sense, and each of which seems to me to sat-isfy the exigencies of the present action. It may mean that the protection is warranted to last during the epidemic, and it was during the epidemic that the plaintiff contracted the disease.

I think, more probably, it means that the smoke ball will be a protection while it is in use. That seems to me the way in which an ordinary person would understand an advertisement about medicine, and about a specifi c against infl uenza. It could not be supposed that after you have left off using it you are still to be protected for ever, as if there was to be a stamp set upon your forehead that you were never to catch infl uenza because you had once used the carbolic smoke ball. I think the immunity is to last during the use of the ball. That is the way in which I should naturally read it, and it seems to me that the subsequent language of the advertise-ment supports that construction. It says: ‘During the last epidemic of infl uenza many thou-sand carbolic smoke balls were sold, and in no ascertained case was the disease contracted Bowen LJ

. . . We were asked to say that this document was a contract too vague to be enforced.

The fi rst observation which arises is that the document itself is not a contract at all, it is only an offer made to the public. The defendants contend next, that it is an offer the terms of which are too vague to be treated as a defi nite offer, inasmuch as there is no limit of time fi xed for the catching of the infl uenza, and it cannot be supposed that the advertisers seri-ously meant to promise to pay money to every person who catches the infl uenza at any time after the inhaling of the smoke ball. It was urged also, that if you look at this document you will fi nd much vagueness as to the persons with whom the contract was intended to be made—

that, in the fi rst place, its terms are wide enough to include persons who may have used the smoke ball before the advertisement was issued; at all events, that it is an offer to the world in general, and, also, that it is unreasonable to suppose it to be a defi nite offer, because nobody in their senses would contract themselves out of the opportunity of checking the experiment which was going to be made at their own expense. It is also contended that the advertise-ment is rather in the nature of a puff or a proclamation than a promise or offer intended to mature into a contract when accepted. But the main point seems to be that the vagueness of the document shows that no contract whatever was intended. It seems to me that in order to arrive at a right conclusion we must read this advertisement in its plain meaning, as the public would understand it. It was intended to be issued to the public and to be read by the public. How would an ordinary person reading this document construe it? It was intended unquestionably to have some effect, and I think the effect which it was intended to have, was to make people use the smoke ball, because the suggestions and allegations which it contains are directed immediately to the use of the smoke ball as distinct from the purchase of it. It did not follow that the smoke ball was to be purchased from the defendants directly, or even from agents of theirs directly. The intention was that the circulation of the smoke ball should be promoted, and that the use of it should be increased. The advertisement begins by saying that a reward will be paid by the Carbolic Smoke Ball Company to any person who contracts the increasing epidemic after using the ball. It has been said that the words do not apply only to persons who contract the epidemic after the publication of the advertisement, but include persons who had previously contracted the infl uenza. I cannot so read the adver-tisement. It is written in colloquial and popular language, and I think that it is equivalent to this: ‘100l. will be paid to any person who shall contract the increasing epidemic after having used the carbolic smoke ball three times daily for two weeks’. And it seems to me that the way in which the public would read it would be this, that if anybody, after the advertisement was published, used three times daily for two weeks the carbolic smoke ball, and then caught cold, he would be entitled to the reward. Then again it was said: ‘How long is this protection to endure? Is it to go on for ever, or for what limit of time?’ I think that there are two construc-tions of this document, each of which is good sense, and each of which seems to me to sat-isfy the exigencies of the present action. It may mean that the protection is warranted to last during the epidemic, and it was during the epidemic that the plaintiff contracted the disease.

I think, more probably, it means that the smoke ball will be a protection while it is in use. That seems to me the way in which an ordinary person would understand an advertisement about medicine, and about a specifi c against infl uenza. It could not be supposed that after you have left off using it you are still to be protected for ever, as if there was to be a stamp set upon your forehead that you were never to catch infl uenza because you had once used the carbolic smoke ball. I think the immunity is to last during the use of the ball. That is the way in which I should naturally read it, and it seems to me that the subsequent language of the advertise-ment supports that construction. It says: ‘During the last epidemic of infl uenza many thou-sand carbolic smoke balls were sold, and in no ascertained case was the disease contracted

by those using’ (not ‘who had used’) ‘the carbolic smoke ball’, and it concludes with saying that one smoke ball will last a family several months (which imports that it is to be effi cacious while it is being used), and that the ball can be refi lled at a cost of 5s. I, therefore, have myself no hesitation in saying that I think, on the construction of this advertisement, the protection was to enure during the time that the carbolic smoke ball was being used. My brother, [Lord Justice Lindley], thinks that the contract would be suffi ciently defi nite if you were to read it in the sense that the protection was to be warranted during a reasonable period after use. I have some diffi culty myself on that point; but it is not necessary for me to consider it further, because the disease here was contracted during the use of the carbolic smoke ball.

Was it intended that the 100l. should, if the conditions were fulfi lled, be paid? The adver-tisement says that 1000l. is lodged at the bank for the purpose. Therefore, it cannot be said that the statement that 100l. would be paid was intended to be a mere puff. I think it was intended to be understood by the public as an offer which was to be acted upon.

Was it intended that the 100l. should, if the conditions were fulfi lled, be paid? The adver-tisement says that 1000l. is lodged at the bank for the purpose. Therefore, it cannot be said that the statement that 100l. would be paid was intended to be a mere puff. I think it was intended to be understood by the public as an offer which was to be acted upon.