Case name & citation: Harvey v Facey [1893] AC 552
- Jurisdiction: The Privy Council (Jamaica)
- Area of law: Offer and invitation to treat
What is the case about?
This is a famous contract law case that establishes that a mere statement of information does not necessarily constitute an offer.
Facts (Harvey v Facey)
In the case of Harvey v Facey, the plaintiffs and the defendants communicated via telegram. Harvey was interested in purchasing a Jamaican property owned by Facey. The following is a summary of their key exchanges:
1. The plaintiffs telegraphed to the defendants, asking: “Will you sell us Bumper Hall Pen? Telegraph lowest cash price.”
2. The defendants replied by telegram, stating: “Lowest price for Pen, £900.”
3. The plaintiffs then sent a telegram stating: “We agree to buy Pen for £900 asked by you.”
It is worth noting that these telegrams constituted the entire communication between the parties in this case. The defendants did not respond to the plaintiffs’ final telegram and therefore did not accept the plaintiffs’ offer to purchase the land for £900. As a result, on the face of it, no contract was formed between the parties.
In contrast, the plaintiffs argued that the exchange of telegrams constituted an offer, which they had accepted, and therefore a binding contract existed. Consequently, they sued the defendants for breach of contract.
Issue
Was the telegram advising of the £900 lowest price an offer that the plaintiffs accepted?
Was there a binding contract?
Judgment of the Court in “Harvey v Facey”
The Court decided in favor of the defendants.
In the instant case of Harvey v Facey, the Court ruled that the defendants’ statement of the lowest price at which they would sell the plot of land (Bumper Hall Pen) did not constitute an offer. This is because an offer must be an expression of a clear willingness to enter into a contract, and the defendants’ statement did not indicate such willingness. Furthermore, the plaintiffs’ subsequent telegram, in which they agreed to buy the land for the stated price, amounted to an offer to purchase. However, since this offer was not accepted by the defendants, no contract was formed.
Reasoning
As stated above, the defendants’ statement indicating the lowest price did not include any terms beyond the price itself. It neither conveyed a willingness to enter into a contract nor specified any other terms or conditions that would govern the sale. Therefore, the defendants had not made a valid offer but merely issued an invitation to treat. An invitation to treat is a preliminary communication made by one party (the offeror), inviting the other (the offeree) to make an offer; it does not itself constitute an offer. In this case, the plaintiffs, in response to the price statement, made an offer to purchase the land at the stated price. However, since the defendants did not accept that offer, no contract was formed.
Conclusion
The final telegram by the plaintiffs did not amount to an acceptance since there was no offer (from the defendants) in the first place.
List of references:
- https://lawplanet.in/harvey-vs-facey-case-summary-1893/
- https://s3.studentvip.com.au/notes/3442-sample.pdf
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Ruchi is a legal research writer with an academic background in CA, MBA (Finance), and M.Com. She specializes in digesting and summarizing complex judicial decisions into clear and structured case notes for students and legal professionals.