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DR. RAM MANOHAR LOHIYA NATIONAL LAW

UNIVERSITY

2016-17

Final Draft

LAW OF CONTRACT
Case Analysis of Harvey vs Facey

Submitted to: Submitted by:

Dr.Visalakshi Vegesna Animesh Tiwari

Associate Professor ( Law ) Roll No. 17, Semester-2

RMLNLU Section - A
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Table Of Contents Page No.

Declaration.....................................................................................

Acknowledgement.

Objective.................................................................................

Hypothesis.......

Research Methodology...............................................................................

Introduction ...

Heading..
Statement of facts
Parties and their relationship......
Legally relevant facts.
Procedurally significant facts.
Procedural History..
Issues.
Judgment...
Holding.
Reasoning..
Personal Opinion.......
Conclusion........................................

Bibliography

DECLARATION
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I hereby declare that the project work entitled CASE Analysis of Harvey vs Facey
submitted to Dr. Ram Manohar Lohiya National Law University, Lucknow, is a record of
an original work done by me under the guidance of, Dr.Visalakshi Vegesna Associate
Professor of Law at RMLNLU. The case study embodied in the project has not been
submitted to any other University or Institute.

Animesh Tiwari

Section=A

Roll no.=17
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ACKNOWLEDGEMENT

I express my gratitude and deep regards to my teacher Dr.Visalakshi Vegesna for giving
me such a challenging topic and also for his exemplary guidance, monitoring and constant
encouragement throughout the course of this thesis.

I also take this opportunity to express a deep sense of gratitude to my seniors in the college
for their cordial support, valuable information and guidance, which helped me in completing
this task through various stages.

I am obliged to the staff members of the Madhu Limaye Library, for the timely and valuable
information provided by them in their respective fields. I am grateful for their cooperation
during the period of my assignment.

Lastly, I thank almighty, my family and friends for their constant encouragement without
which this assignment would not have been possible.
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OBJECTIVE

The main objective of this project is to analyse the famous case of Harvey vs Facey 1893. The
thesis will help in finding a conclusion for differentiation in offer and invitation to treat.

HYPOTHESIS

In this case. In the view their Lordships take of this case it becomes unnecessary to consider
several of the defences put forward on the part of the respondents, as their Lordships concur in
the judgment of Mr. Justice Curran that there was no concluded contract between the appellants
and L. M. Facey to be collected from the aforesaid telegrams. Their Lordships are of opinion that
the mere statement of the lowest price at which the vendor would sell contains no implied
contract to sell at that price to the persons making the inquiry. Their Lordships will therefore
humbly advise Her Majesty that the judgment of the Supreme Court should be reversed and the
judgment of Curran, J., restored. The appellants must pay to the respondents the costs of the
appeal to the Supreme Court and of this appeal.

RESEARCH METHODOLOGY

The methodology used in this project shall be strictly doctrinal wherein matter given in various
texts, articles, research papers and law commission reports shall be emphasized upon.
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INTRODUCTION

HEADING

Harvey & Anor v Facey & Ors [1893] UKPC 1 (29 July 1893)1

Judgment of the Lords of the Judicial Committee of the Privy Council

on the Appeal of

Harvey and another

v/s

Facey and others,

from the Supreme Court of Judicature of Jamaica, delivered 29th July1893.

STATEMENT OF FACTS

Facey (D) was in negotiations with the Mayor and Council of Kingston regarding the sale of his
store. Harvey (P) sent Facey a telegram stating: Will you sell us Bumper Hall Pen? Telegraph

lowest cash price-answer paid. On the same day, Facey sent Harvey a reply by telegram stating:
Lowest price for Bumper Hall Pen 900. Harvey sent Facey another telegram agreeing to
p2urchase the property at the asking price. D refused to sell and P sued for specific performance

1 www.cips.org/en/Supply.../Classic-court-report-Harvey-v-Facey-1893/

2
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and an injunction to prevent Kingston from taking the property. The trial court dismissed on the
grounds that an enforceable contract had not been formed and P appealed. The Supreme Court of
Jamaica reversed and D appealed.

PROCEDURAL HISTORY

The Appellants instituted an action against the Respondents to obtain specific performance of an
agreement alleged to have been entered into by the Respondent Larch in M. Facey for the sale of
a property named Bumper Hall Pen, The Respondent L. M. Facey was alleged to have had power
and authority to hind his wife the Respondent Adelaide Facey in selling the property. The
Appellants also sought an injunction against the Mayor and Council of Kingston to restrain them
from taking a conveyance of the property from L. M. Facey. The case came on for hearing before
Mr. Justice Curran who dismissed the action with costs, on the ground that the agreement alleged
by the Appellants did not disclose a concluded contract for the sale and purchase of the property.
The Court of Appeal reversed the judgment of Mr. Justice Curran, and declared that a binding
agreement for the sale and purchase of the property had been proved as between the Appellants
and the Respondent L. M. Facey, but that the Appellants had failed to establish that the said L.
M. Facey had power to sell the said property without the concurrence of his wife the said
Adelaide Facey, or that she had authorised him to enter into the agreement relied on by the
Appellants, and that the agreement could not therefore be specifically , and the Court ordered
that the Appellants should have forty shillings for damages against L. M. Facey in respect of the
breach of the agreement, with costs in both Courts against L.M. Facey in respect of the breach of
the agreement.

The Appellants obtained leave from the Supreme Court to appeal to Her Majesty in Council, and
afterwards obtained special leave from Her :Majesty in Council to appeal in respect of a point
not included in the leave granted by the Supreme Court, but the Order in Council provided that
the Respondents should he at liberty at the hearing, without special leave, to contest the contract
alleged in the pleadings and affirmed by the Court of Appeal.

The Appellants are solicitors carrying on business in partnership at Kingston, and it appears that
in the beginning of October 1891 negotiations took place between the Respondent L. M. Facey
and the Mayor and Council of Kingston for the sale of the property in question, that Facey had
offered to sell it to them for the sum of 900l., that the offer was discussed by the Council at their
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meeting on the 6th of October 1891, and the consideration of its acceptance deferred; that on the
7th of October 1891, L. M. Facey was travelling in the train from Kingston to Porus, and that the
Appellants caused a telegram to be sent after him from Kingston addressed to him "on the train
for "Porus." in the following words:-"Will you sell us Bumper Hall Pen? Telegraph lowest cash
price-answer paid;" that on the same day L. M. Facey replied by telegram to the Appellants in the
following words:-

"Lowest price for " Bumper Hall Pen 9001."; that on the same day the Appellants replied to the
last-mentioned telegram by a telegram addressed to L. M. Facey "on train at Porus" in the words
following :-"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."

The above telegrams were duly received by the Appellants and by L. M. Facey. In the view their

Lordships take of this case it becomes unnecessary to consider several of the defences put
forward on the part of the Respondents, as their Lordships concur in the judgment of Justice
Curran that there was no concluded contract the Appellants and L. M. Facey to be collected from
the aforesaid telegrams. The first telegram asks two questions. The first question is as to the
willingness of L.M.Facey to sell to the Appellants; the second question asks the lowest price, and
the word "Telegraph" is in its collocation addressed to that second question only. L. M. Facey
replied to the second question only, and gives his lowest price. The third telegram from the
Appellants treats the , 1l1swer of L. M. Facey stating his lowest price as an unconditional offer
to sell to them at the mice named. Their Lordships cannot treat the telegram from L. M. Facey as
binding him in any respect, except to the extent it does by its terms, viz., the lowest price.
Everything else is left open, and the reply telegram from the Appellants cannot be treated as an
acceptance of an offer to sell to them; it is an offer that required to be accepted by L. M. Facey.
The contract could only be completed if L. M.Facey had accepted the Appellants' last telegram.
It has been contended for the Appellants that L.M. Facey's telegram should be read as saying
"yes" to the first question put in the Appellants' telegram, but there is nothing to support that
contention. L. M. Facey's telegram gives a precise answer to a precise question, viz., the price.
The contract must appear by the telegrams, whereas the

Appellants are obliged to contend that an acceptance of the first question is to be implied. Their
Lordships are of opinion that the mere statement of the lowest price at which the vendor would
sell contains no implied contract to sell at that price to the persons making the inquiry. Their
Lordships will therefore humbly advise Her Majesty that the judgment of the Supreme Court
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should be reversed and the judgment of Mr. Justice Curran restored. The Appellants must pay to
the Respondents the costs of the appeal to the Supreme Court and of this appeal.

ISSUES

1. Is a statement of the minimum price at which a seller would sell an offer?

2. Whether there was a concluded contract between the appellants and LM Facey?

Was there an offer?

Was there an acceptance of the offer?

JUDGEMENT

The trial court dismissed the action on the ground that the agreement did not disclose a
concluded contract, the Supreme Court of Jamaica reversed, the defendants appealed to the
Judicial Committee of the Privy Council. The Privy Council later advised that no contract existed
between the two parties. The first telegram was simply a request for information, so at no stage
did the defendant make a definite offer that could be accepted.

HOLDING

A mere statement of the minimum selling price is an invitation to treat and not an offer to sell.

The court held that by replying to Ps question regarding the lowest price of the property, D did
not make an affirmative answer to the first question regarding his willingness to sell. The court
held that D had made an invitation to trade and not an offer.

RELATED CASES

Harris v Nickerson (1893) L.R. 8 Q.B. 286 3

3 netk.net.au/Contract/Harris.asp
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An auctioneer advertised in a newspaper that a sale of office furniture would be held. A

broker came from a distant place to attend that auction, but all the furniture was withdrawn.
The broker thereupon sued the auctioneer for his loss of time and expenses. Held, a
declaration of intention to do a thing did not create a binding contract with those who acted
upon it, so that the broker could not recover

Pharmaceutical Society of Great Britain v Boots [1953] 1 QB 401 4

. The defendants operated a retail self-service chemist. The customers took the items they
required from the shelves, put them into a basket, and then took them to the cash desk. The
pharmacist supervised the transaction at the cash desk. The issue was whether the sale was
completed at the shelf when the goods were selected, or at the cash desk. The provisions of the
Pharmacy and Poisons Act 1933 s18 stated that it was unlawful to sell certain drugs, unless the
sale is affected under the supervision of a registered pharmacist.

HELD Somervell LJ

The usual view has been that customers (say in a bookshop) select the item they wish to
purchase, and then take it to the assistant, who accepts it and completes the contract. I cannot see
that this situation is any different. The plaintiff contends that the defendant has offered to sell the
goods by displaying them on the shelves, and that the plaintiff accepts the offer by taking them
from the shelf. If this is correct, then a person who takes something from the shelves cannot then
replace the item if they see something which they would prefer more. It seems clear that the sale
takes place at the cash register, under the supervision of the pharmacist, in conformity with the
Act.

Carlill v Carbolic Smoke Ball Co. [1893] 1 QB 256 5

It is the authoritative case in this area. The Smoke Ball Co advertised a reward of 100 to any
customer who bought their product and having used it appropriately caught influenza

distinction between an invitation to treat and an offer turned on intention. This can also apply to
advertisements. Consider the advert in the shop window advertising a reward for the return of a
4
http://casebrief.wikia.com/wiki/Pharmaceutical_Society_of_Great_Britain_v_Boots_Ca
sh_Chemists_(Southern)_Ltd.

5 Mulla The Contract act by Sir Dinshav Fardunji Mulla(14 th ,edited by Rahul s Shay)
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lost kitten, which is capable of being a unilateral offer accepted by embarking upon performance.
The Smoke Ball Co advertised a reward of 100 to any customer who bought their product and
having used it appropriately caught influenza. The company claimed that this was just an
invitation to treat, their advertisement being no more than a 'mere puff ' to increase sales. The
court held that the company had intended to be bound to their promise as they had deposited
1000 in the bank for such a purpose. It was a unilateral offer made to the whole world at large
which could be accepted by anyone who complied with the terms.

REASONING

Mere statement of the lowest price at which the vendor would sell contains no implied contract
to sell at that price to the persons making the inquiry.

PERSONAL OPINION

2 questions in the 1st telegram and only 1 was replied to

The lowest price was stated,
But the question regarding the sales was not

The contract could only be completed if Facey had accepted the Harveys last telegram. A mere
statement contains no implied acceptance of a contract.

Harveys statement we agree to buy pen at sum

This is an offer; offer to buy

Previous telegram from Facey wasnt as it only stated facts

Using the word agree does not make something into a contract

There is a presumption against implied contract

There is no legal intention from Facey to sell the pen

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An objective test is not possible since we dont know if Facey plans to accept the
deal
A legally enforceable agreement requires certainty to hold

FURTHER EXPLANATION:-

Offer

An offer is an expression of willingness to contract made with the intention that it shall become
binding on the offeror as soon as it is accepted by the offeree.

A genuine offer is different from what is known as an "invitation to treat", ie where a party is
merely inviting offers, which he is then free to accept or reject. The following are examples of
invitations to treat:

INVITATION TO TREAT INCLUDE:-

Auctions

In an auction, the auctioneer's call for bids is an invitation to treat, a request for offers. The bids
made by persons at the auction are offers, which the auctioneer can accept or reject as he
chooses. Similarly, the bidder may retract his bid before it is accepted.

Display of Goods

The display of goods with a price ticket attached in a shop window or on a supermarket shelf is
not an offer to sell but an invitation for customers to make an offer to buy.
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Advertisements

Advertisements of goods for sale are normally interpreted as invitations to treat. However,
advertisements may be construed as offers if they are unilateral, ie, open to all the world to
accept (eg, offers for rewards).

Mere Statements of Price

Recommended reading: Harvey v Facey [1893] AC 552

Tenders

Where goods are advertised for sale by tender, the statement is not an offer, but an invitation to
treat; that is, it is a request by the owner of the goods for offers to purchase them.

CONCLUSION
In the instant case, . there was no concluded contract between the appellants and L. M. Facey to
be collected from the telegrams. The first telegram asks two questions. The first question is as to
the willingness of L. M. Facey to sell to the appellants; the second question asks the lowest
price,. L. M. Facey replied to the second question only, and gives his lowest price. The third
telegram from the appellants treats the answer of L. M. Facey stating his lowest price as an
unconditional offer to sell to them at the price named. it does by its terms, viz., the lowest price.
Everything else is left open, and the reply telegram from the appellants cannot be treated as an
acceptance of an offer to sell to them; it is an offer that required to be accepted by L. M. Facey.
The contract could only be completed if L. M. Facey had accepted the appellant's last telegram.
It has been contended for the appellants that L. M. Facey's telegram should be read as saying
yes to the first question put in the appellants' telegram, but there is nothing to support that
contention. L. M. Facey's telegram gives a precise answer to a precise question, viz., the price.
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The contract must appear by the telegrams, whereas the appellants are obliged to contend that an
acceptance of the first question is to be implied.

Hence A statement of the minimum price at which a party may be willing to sell will not amount
to an offer.

BIBLIOGRAPHY

http://indiankanoon.org/doc/570898/
http://www.scconline.com/Members/SearchResult2014.aspx
http://jajharkhand.in/judg/sc/pdf/CIVIL%20LAW/CIVIL%20PROCEDURE
%20CODE/Section%2092%20of%20CPC/Order%2021%20Rule%2029/Sri%20Krishna
%20Singh%20V%20Mathura%20Ahir%20and%20Ors%20-%20AIR%201982%20SC
%20686.pdf
http://indiatogether.org/combatlaw/vol3/issue4/flipflop.htm
http://www1.umn.edu/humanrts/research/india-jurisprudence.html
http://www.criticaltwenties.in/lawthejudiciary/religious-law-v-fundamental-rights
Book Avtar singh
Book R.K Bangia
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Mulla The India Contract book

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