Offer

WHAT IS AN OFFER?

In NTHC v Antwi, Date-Bah JSC defined an offer as ‘an indication in words or by conduct by an offeror that he or she is prepared to be bound by a contract in the terms expressed in the offer, if the offeree communicates to the offeror his or her acceptance of those terms. To qualify as an offer, the statement or conduct must indicate a willingness to enter a bargain. This is shown by indicating in the offer what the offeror requires the offeree by way of acceptance in return for the promise. It is this notion which distinguishes a contractual offer from a bare gratuitous promise. Further, the statement or conduct must indicate the terms on which the maker is prepared to be bound. An offer must be made with the intention that it will become binding once it is accepted by the other party.

HOW OFFER IS DISTINGUISHED FROM INVITATION TO TREAT?

An invitation to treat in essence constitutes an attempt to initiate the bargaining process by soliciting or attracting offers from the party to whom it is addressed. As explained in Chitty on Contracts : A communication by which a party is invited to make an offer is commonly called an invitation to treat. IT is distinguishable from an offer primarily on the ground that it is not made with the intention that it is to become binding as soon as the person to whom it is addressed simply communicates his assent to its terms.

In NTHC Ltd v Antwi, the Supreme Court had to determine whether an offer had been made which was capable of being converted into a contract upon acceptance.

Facts : The plaintiff at some point worked for the defendant. During the period of her employment, she received a letter dated 17th of January 2005 signed by the Board secretary informing her about the decision of the Board of Directors to sell the company’s houses being occupied by staff and the first offer was made to her. She was to indicate her interest in writing by the 31st of January 2005 if she was interested. The house in question was house No 4 Plateau Close, East Legon Extension, the cost price of which was quoted as $70, 307 or its cedi equivalent and payment was to be made in 6 months. The plaintiff indicated her acceptance of the offer in writing on the 31st of January 2005 and requested that the necessary bank accounts details into which payment was to be made should be made available to her. There was no further correspondence between the parties until the plaintiff received a letter from the defendant dated 7th November 2005, stating hat the Board of Directors had decided to withdraw the offer of sale of the said property signed by the Deputy Managing Director. The plaintiff had, however, by this time left the employment of the Defendant and had begun working for a different employer on 8th August , 2005.

The defendant in a second letter addressed to the plaintiff requested that she vacate from the house in question following her resignation from the company. Based on these , the plaintiff instituted an action against the defendants claiming that the exchange of letters in January 2005 resulted in an agreement that the defendant would sell the house to the plaintiff which was enforceable, the remedies of specific performance and a perpetual inunction to restrain the defendants from ejecting her from the property. The defendant on the other hand asserted that the letter of 17th January 2005 was not an offer but an invitation to staff to make an offer to purchase the premises. There was therefore no enforceable contract between the parties. The High Court held that no contract had been formed and that the company’s proposal to sell the property was not a definite enough offer of the property to the plaintiff. Hence the plaintiff’s actions were dismissed since no contract had been formed. On appeal, however, the judgment was reversed. The Learned Judge concluded that the letter of 17th January, 2005 contained an offer because the letter was not that of an enquiry but referred to a specific house and the offer was made to the appellant and a certain price was to be paid within a certain period and the appellant was only to indicate her acceptance if she accepted the terms offered. The defendant /respondent then appealed to the Supreme Court that the Court of Appeal erred in holding that the communications between the parties constituted an offer.

The Supreme Court in coming to its conclusion considered the basic principles of offer and invitation to treat and distinguished them. The court stated that an invitation to treat is distinguished from an offer on the basis of the proposal’s lack of an essential characteristic of an offer, namely its finality which gives a capacity to the offeree to transform the offer into a contract by the mere communication of his or her assent to its terms. The appellant in this case relied heavily on the case of Gibson v Manchester City Council. The Supreme Court was however of the opinion that there were marked differences between the two cases, noting that the Manchester City Council letter obviously lacked finality, unlike the proposed sale of the house in the current case to the plaintiff which was an offer of an identified property at a price certain, leaving details of the bank accounts to be communicated and the price to be paid. These however, according to the court, were subsidiary questions which did not affect the finality of the offer. The letter of 17th January , 2005 in which the plaintiff was given the first offer to purchase the hosue was therefore held to constitute an offer and not an invitation to treat.

In NTHC Ltd v. Antwi, the Supreme Court per Date-Bah JSC in establishing the distinction between offers and invitations to treat explained : “…Accordingly, the offer has to be definite and final and must not leave significant terms open for further negotiation, By significant, we here mean terms that are essential to the bargain contemplated…It is this need for finality and definiteness which leads to the analytical need for the concept of invitation to treat. If a communication during negotiations is not the final expression of an alleged offeror’s willingness to be bound, it may be interpreted as an invitation to the other party to use it as a basis for formulating a proposal emanating from him or her that is definite enough to qualify as an offer. Thus the indefinite communication may be what generates an offer from the other side. An invitation to treat is thus to be distinguished from an offer on the basis of the proposal’s lack of an essential characteristic of an offer, namely, its finality which gives a capacity to the offeree to transform the offer into a contract by the mere communication of his or her assent to its terms.”

In commercial practice, a seller of goods or services or a person seeking business would usually have to first of all solicit offers for possible bargains by way of display of the goods, circulation of brochures or catalogues or the placing of advertisements announcing r publicizing the availability of the goods or services and providing information about them. Such preliminary activities which are usually only intended to solicit offers from potential customers are not normally considered by the law as contractual offers in themselves, capable of being converted into a contract upon acceptance. Such statement of intention or conduct are merely invitations to the public to make offers and attempts to imitate the bargaining process and are, therefore, referred to as “invitation to treat”.

What are the Common Examples of “invitations to treat”?
a. Tender notices
b. Display of goods in a shop window with prices attached
c. Advertisement of goods or services in a newspaper
d. Circulation of catalogues or price lists
e. Auction notices

Tender Notices
A notice stating that goods are to be sold by tender and inviting people to submit tenders for their purchase is an invitation to treat and not an offer which is deemed to have been accepted when a person submits the highest tender. Similarly a notice inviting suppliers to submit tenders of the lowest price at which they are prepared to supply goods is not deemed as an offer to buy from the person with the lowest price, but is simply an invitation to treat. Thus tender notices are merely intended to invite tenders and to ascertain whether an acceptable offer can be obtained. It is the tender which constitutes the offer which may or may not be accepted.

Spencer v. Harding :
The defendants sent out a circular stating that they were instructed to offer for sale by tender certain goods and gave the date and time when the tenders would be received. The plaintiff alleged that the circular amounted to an offer to sell the goods to the highest bidder and they , the plaintiffs had submitted the highest bid, and defendants had refused to sell to them.
The court held that the circular or tender notice was not an offer. It amounted to nothing more than a mere proclamation that the defendants were ready to chaffer for the sale of the goods and to receive offers for the purchase of them. The advertisement inviting tenders was held to be mere invitation to the public to send in tenders. It contained no promise, either express or implied, to accept the highest tender.

WHAT IS A STANDING OFFER?

Acceptance of Offers and Standing Offers
It has been noted that whether or not the acceptance of the tender will result in a binding contract between the parties depends on the nature and wording of the invitation.

Basically, if the invitation contains an explicit promise to buy a specified quantity of goods from the supplier within a particular period, then acceptance of a tender would normally lead to the conclusion of a contract between the parties. However, where the invitation does not include any definite promise to buy, but simply states that the invitor will buy the goods from the tendering party as and when it sees fit to order such goods, an acceptance of a tender in response to such an invitation may not immediately result in a binding contract between the parties. The acceptance only signifies that the invitor finds the tendering party’s price acceptable and that if he orders the goods, he intends to order them from the tendering party. If, subsequent to the acceptance of the order, the invitor proceeds to place an order for a specified quantity of the goods from the tendering party, his order will then constitutes an acceptance of the offer (tender) and result in the conclusion of a contract between the parties.

The acceptance only signifies that the invitor finds the tendering party’s price acceptable and that if he orders the goods, he intends to order them from the tendering party. If subsequent to the acceptance of the order, the invitor proceeds to place an order for a specified quantity of the goods from the tendering party, his order will then constitute an acceptance of the offer (tender) and result in the conclusion of a contract between the parties. Thus every order placed will create a separate contract for the sale of the goods. In this situation the tender constitutes a “standing offer” which subsists for a period and is capable of recurrent acceptances during the period of its existence , each acceptance resulting in a separate contract.

Great Northern Railway v. Witham : The plaintiffs advertised for tenders for the supply of stores. The defendant submitted a tender stating : “ I undertake to supply the company for twelve months with such quantities of [specified articles] as the company may order from time to time”. The company replied by letter accepting the tender, and subsequently gave various orders, which were executed by the defendant. Ultimately the company gave an order for goods within the schedule, which the defendant refused to supply. The company sued for breach of contract .
The court held that the company must succeed. The tender was said to be a standing offer, which was converted into a series of contracts by the subsequent orders placed by the company. The placing of an order by the company (which created a separate contract) precluded the possibility of revocation by the defendant. Thus the defendant was contractually bound to supply the goods that had been ordered, even though he could take steps to regain his liberty of action for the future.

In Perbi v Attorney General, In 1967, the government of Ghana advertised for tenders by the supply of food items to a hospital for a fixed period of five months. The plaintiff accepted the tender and supplied the required items as and when demanded. The agreement provided that the government was free to purchase the items elsewhere if the plaintiff failed to supply within time or when the items supplied were of bad quality. The agreement further provided that each party could terminate the agreement by giving a month’s notice in writing. Sometime in 1967 the government gave only two days’ notice of its intention to terminate the agreement before the expiration of the five months on the ground that the agreement was a mere arrangement or standing offer which could be terminated at short notice. In an action by the plaintiff for breach of contract, the main issue for determination by the court was whether the agreement was a binding contract or a mere standing offer incapable of giving rise to enforceable legal rights.

The court held that where there was a tender by a purchasing body to buy goods needed by them, an acceptance of such a tender would constitute a binding contract although the parties would not be bound to buy any specific quantity of goods. Nevertheless the purchasing body would be bound to buy and pay for all the goods that were in fact needed by them. There would be a breach of contract if the purchasing body in fact needed some of the articles, the subject of the tender and did not take them from the tenderer. The court held further that in this case there was a complete and valid contract between the parties because the items specified in the tender were required by the defendant who had agreed to purchase all the said items from the plaintiff. The court noted that if the parties did not contemplate a binding agreement but merely an offer capable of acceptance, the agreement would not contain stipulations in respect of breach and notice of termination.

The decision in Perbi v AG emphasized that by making a firm promise to purchase all its requirements of food items from the tenderer, the hospital had concluded a binding contract to purchase from the latter all the specified items that the hospital had need of in the designated period. The court concluded that the nature of the invitation and the terms of the standard contract used by the government showed clearly that the parties contemplated a binding contract and not simply a standing offer which was capable of acceptance from time to time.

Display or Exhibition of Goods for Sale
A display of goods in a shop with prices marked is not an offer binding the shopkeeper to sell at those prices. It is merely an “invitation to treat” and it is for the customer to offer to buy the goods which offer the shopkeeper may or may not accept.

Fisher v. Bell: A shopkeeper displayed a flick knife in his shop window with a ticket behind stating “ Ejector knife-4s”. He was charged with offering the knife for sale contrary to the Restriction of Offensive Weapons Act.
The court held that according ot the ordinary law of contract, the display of an article with a price on it in a shop window is merely an invitation to treat. It is in no sense an offer for sale, the acceptance of which constitutes a contract. Similarly the display of goods with prices marked on the shelf of a self-service shop is also in law an “invitation to treat” and not an offer to sell at that price.

Pharmaceutical Society of Great Britain v. Boots Cash Chemist (Southern) Ltd : The defendants adapted one of their shops to a “self-service” system. Under this system, a customer, upon entering the shop was given a basket, allowed to select the items he required, place them in the basket and take them to the cash desk. Near the cash desk there was a registered Pharmacist who was authorized, if necessary , to stop any customer from buying and removing from the shop, certain drugs listed as poisons in the Pharmacy and Poisons Act. The plaintiffs alleged that the defendants had infringed the provisions in section 18 of the Act which made it unlawful to sell any listed poison “unless the sale is effected under supervision of a Registered Pharmacist”.
The critical issue was this : “Under the self-service system, at what point was the contract of sale concluded?” The plaintiffs argued that the display of the goods in a self-service shop with the prices attached was an offer, which was accepted as soon as a customer selected an item and placed it in his basket. If the item was a poison, the contract was concluded before the registered pharmacists had a chance to see it.
The defendant argued that the display of goods in the self-service shop was merely an invitation to treat. An offer to buy was made when the customer selected the item and placed it in his basket. That offer was accepted at the cash desk when the shop keeper accepted the customer’s money in payment for the goods. At that point the registered pharmacist would have had the chance to supervise the sale.

At first instance the court accepted the defendant’s contention and held that there was no infringement of the provision. The court decided that the display of the goods in the self-service shop was only an invitation to treat and not an offer. This position was upheld on appeal. The Court of Appeal stated : “…the mere fact that a customer picks up a bottle of medicine from a shelf does not amount to an acceptance of an offer to sell, but is an offer by the customer to buy. There was no sale until the buyer’s offer to buy was accepted by the acceptance of the purchase price.

Advertisements
Generally, advertisements in newspapers advertising the availability of goods for sale are deemed to be “invitations to treat” and not contractual offers.

Partridge v. Crittendon : The plaintiff inserted an advertisement in a periodical which read “ Bramblefinch cocks, Bramblefinch hens, 25s each”. Plaintiff was charged with unlawfully offering for sale a wild live bird contrary to the Protection of Birds Act.
It was held hat the advertisement was an invitation to treat and not a contractual offer to sell the birds. The plaintiff could, therefore, not be guilty of the offence charged. According to Lord Parker, in dealing with advertisements and circulars, unless these come from manufactures, there is business sense in their being construed as invitations to treat and not offers in themselves.

Dormenyor v. Johnson Motors Ltd : The defendants, car repairers , advertised on radio and made public announcements that they had spare parts for the repair of vehicles including Peugeot cars. Relying on the advertisements, the plaintiff caused his extensively damaged Peugeot car to be towed to the defendants’ garage in June 1980. His agent gave no instructions on what was to be done and had no job card prepared as was customary to show the conditions for the repairs. The defendants therefore refused to repair the vehicle on the ground that no formal agreement had been concluded for the repairs. Within two weeks the defendants wrote to the plaintiff informing him that commencement of repairs would depend on a “receipt of a written official acceptance of our estimates.” The plaintiff , however, ignored the letter. In February 1981, he wrote for the release of his car to him. But on 5 February 1981, the defendants replied that the car could be released only on payment of the sum of 4,500 cedis being their storage and risk charges. The plaintiff refused to pay the charge and sued, inter alia, for damages for breach of contract and wrongful detention of his car. The defendants counterclaimed for the storage charges. On 6 February 1986 the court ordered the defendants to release the car. Even though the defendants were willing to release the car, the plaintiff failed to take delivery and pressed on with his claim contending that the car had further deteriorated.

It was held that even if these advertisements had been established with certainty, they could not by themselves constitute valid binding agreements. Considering the nature of work to be done on the vehicle, it would have been necessary for a prudent person to be present for the estimation of what was to be repaired and cost of it. The defendant’s letter to the plaintiff warning that repairs would commence on a receipt of a written official acceptance of the estimate was a reasonable condition, for the repairer would have to be sure that the owner would accept his repairing the vehicle at the estimated cost. The court observed further that even if the plaintiff had relied on the advertisements, the letter was a call to him to accept or reject it. It indicated to him that his vehicle would only be repaired on conditions contained in the letter given him. The plaintiff was therefore unwise not to have written as requested. There was thus no consensus as to what as to be done.

It must be noted that whether or not an advertisement constitutes an offer depends on the wording of the advertisement. It has been held that a unilateral offer made by way of advertisement would qualify as a contractual offer. In the American case of Lefkowitz v. Great Minneapolis Surplus Stores, a newspaper advertised the sale of three fur coats worth $100 each for $1 each-first come first served. Plaintiff showed up first. Defendant refused to sell saying house rules allowed sales only to women. the court held that the newspaper advert was an offer. It was clear, explicit and definite and it left nothing open to negotiation. The plaintiff was allowed to claim.

Circulation of Catalogues and Price Lists
The issue or circulation of price lists or catalogues advertising goods for sale constitutes an invitation to treat and not a contractual offer which can be deemed to be accepted by the placing of an order for the goods. The circulation of catalogues and price lists is generally considered to be a mere attempt to induce or attract offers and not an offer itself. The justification for this position has been said to be that any other interpretation would result in the seller being contractually bound to supply to every person who places an order even if his stock is depleted.

In Grainger & Son v. Gough, it was held that the transmission of price lists by a wine merchant in England did not amount to an offer to supply an unlimited quantity of wines at the stated prices , such that as soon as an order was given, there was a binding contract to supply that quantity. The court noted that if that were so, the merchant would find himself in a number of contractual obligations to supply quantities of wines which he would be unable to, since his stock would necessarily be limited. Likewise, an advertisement on the internet will also not constitute invitation to treat.

Auction Sales
In Ghana , the law on auction sales has been largely codified the Sale of Goods Act, 1962, (Act 137) and the Auction Sales law, 1989 (PNDC Law 230).
Generally, an auctioneer can only offer goods for sale by auction with the consent of the owner. For every auction sale, the law requires that there must be a notice announcing the sale, which must contain a clear description of the goods to be sold and give particulars of the quality and quantity of the goods.

Section 13 of the Auction Sales Law, 1989 (PNDCL 230) states :
(1) Where the goods to be sold by auction are not perishable or damaged goods the auctioneer shall give not less than seven days notice of sale to the District Secretary of the district where the sale is to take place.
(2) A notice of sale shall-
(a) state the time and place of the sale; and
(b) give a catalogue of the goods to be sold.

A notice advertising an auction sale is merely a statement of an intention to sell and not a binding contract. It has therefore been held that in the absence of fraud, an intending purchaser has no right to use if the auction is put off or the items withdrawn. In Harris v. Nickerson, the defendant , an auctioneer, advertised in the London papers to the effect that certain materials including plant and office furniture would be sold at a certain place on a certain day. The notice stated “The highest bidder to be the buyer”. The plaintiff, a broker, had a commission to purchase at the sale the office furniture advertised to be sold. He went to the place indicated ,attended the sale and purchased certain lots. But the goods described as “office furniture” had been withdrawn and were not put up for sale. The plaintiff brought the action for damages for loss of time etc. The court held that the auction notice or advertisement was a mere declaration of intention and not a binding contract. The defendant was therefore , not liable in damages.

Auction Sales-Rules of Offer and Acceptance
(1) Where the goods are sold in lots, each lot put up at the auction sale constitutes the subject matter f a separate contract of sale –section 4(1) of the Sale of Goods Act, 1962(Act 137)
(2) The auctioneer, by putting up the goods and inviting bids, makes an invitation to treat and not an offer.
(3) At an auction sale, each bid constitutes an offer which ma or may not be accepted.
(4) The contract of sale is complete when the auctioneer announces his acceptance by the fall of the hammer or in any other customary manner –Section 4(1) of the Sale of Goods Act, 1962(Act 137)
(5) At any time before the Auctioneer announces his acceptance the bidder is entitled to withdraw or revoke his bid. This rule is in accordance with universal contractual principle that an offer can be revoked at any time before acceptance.

What are the Kinds of Auction Sales?

There are basically two kinds of auction sales, which are : (i) Auction Sale subject to a Reserve Price and (ii) Auction Sale without Reserve Price.

Auction Sale Subject to a Reserve Price
Section 17(1) of the Auction Sales Law, 1989 (PNDCL 230) States : The auctioneer shall state the particulars or conditions of sale by auction of any goods whether such sale is without reserve, or subject to a reserved price , and whether a right to bid is reserved by the vendor.

Where the sale is stated to be subject to a reserved price, this means that there is a specific price below which the vendor will not sell the goods (i.e. the reserve price) Where the sale is advertised as one subject to a reserved price the vendor or agent can bid, once only , openly at the beginning of the auction, before any bid is made.-Section 4(1)(c) of Act 137.

Secondly, where the sale is one subject to a reserve price, the auctioneer is not bound to sell the goods to the highest bona fide bidder if his bid is below the notified reserve price. This is so even if the auctioneer accidentally knocks the goods to him. The Auction Sales Act codifies the common law principle applied in the case of McManus v. Fortescue as follows : Where the sale is subject to a reserve price, the sale shall not take effect even when the property is knocked down to the highest bidder if the highest bid is lower than the reserved price and in such a case the highest bidder has no right of action.
Provided that where an auctioneer signs a memorandum of the contract after accepting a bid below the reserved price he thereby impliedly warrants that he has authority to sell at the price named, and is liable to the purchaser for breach of warranty of authority.

Auction Sale without Reserve Price
If the sale is advertised as a sale “without reserve price” this means there is no minimum price below which the seller will not sell the goods. The law therefore presumes that the vendor is prepared to sell the goods at the highest price bid at the auction, no matter what that price may be. Accordingly, where the auction sale is without reserved price, the law stipulates that the highest bona fide bidder will be entitled to buy the goods at the price bid whether the auctioneer accepts his bid or not.-Section 4(1) of Act 137.

Secondly, where the auction sale is advertised as a sale “without reserve”, neither the owner nor his agent can bid at the auction and the auctioneer cannot knowingly accept such a bid-Section 17(3) of PNDCL 230.

The Auction Sales Act codifies the principle as stated in the case of Warlow v. Harrison. : The defendant, an auctioneer, advertised the sale of horse by auction, stating in the notice that it would be a sale “without reserve price”. The plaintiff attended the sale and bid 60 guineas for the horse. After the plaintiff had made his bid, one Henderson, the owner of the horse, bid 61 guineas for the horse. The auctioneer knocked the horse down to Henderson, the owner and entered his name as purchaser of the horse. The plaintiff contended that since he was the highest bona fide bidder, he was entitled to buy the horse at the price bid. The defendant refused to sell the horse to the plaintiff.
The court held that where an auctioneer puts up goods for sale and pledges that the sale shall be without reserve, he thereby makes a contract with the highest bona fide bidder to sell the goods at the price bid, whether the sum bid is equivalent to the value of the goods or not. The court held further that where an auction sale is advertised as a sale “without reserve” neither the vendor not any person on his behalf shall bid at the auction. The plaintiff, being the highest bona fide bidder, was therefore entitled to buy the horse at the price bid.

WHAT ARE BILATERAL AND UNILATERAL CONTRACTS?

Basically, a contract concluded between two or more parties could take one of two forms: Unilateral Contracts and Bilateral Contracts. A unilateral contract is formed where a promisor makes a promise in exchange for the actual performance of an act by the promise as opposed to a counter promise. The contract is described as unilateral because only the offeror makes a promise. The offeree is not required to make a counter promise, but rather ,to perform the stipulated act. It is only when the oferee performs the specified act that the offeror becomes contractually bound to fulfil his promise. The distinguishing feature of a unilateral contract is that the acceptance consists of the actual performance of a stipulated act and not the making of a promise.
On the other hand, a bilateral contract is formed when one party makes a promise in exchange for a return promise from the other party. Bilateral contracts therefore , consist of two promises which depend on each other.

WHAT ARE GENERAL OFFERS?

Unilateral contracts are often created by general offers. A general offer is an offer made to the public at large or to a particular person by way of public notice. Basically, two kinds of general offers can be distinguished :
• General offers that can only be accepted by one person-usually the first in time to perform the stipulated conditions.
• General offers that are capable of acceptance by numerous persons.

A classic example of a general offer can be seen in the case of Carlil v Carbolic Smokeball Co. : The defendant advertised that they would pay 100 pounds to anyone who contracts influenza after using their medical preparation, the carbolic smokeball in accordance with prescribed instructions for a fortnight. The plaintiff used the smokeball in accordance with the instructions but caught influenza within the prescribed period. She sued the company for the 100 pounds.
One of the arguments put up by the defendants was that if the advertisement was to be construed as a contract at all, it was a contract with the whole world and one could not contract with the whole world. The court held that the advertisement constituted an offer made to the public i.e. a general offer, and stated further that although the offer was made to the whole world, the contract was made only with that limited portion of the public who came forward to perform the conditions of the offer on the faith of the advertisement.
Where a person performs an act stipulated by a general offer at a time when he was ignorant of the existence of the offer, can he sue on any contract?

In principle a performance cannot properly be said to constitute acceptance of an offer if it was made in ignorance of the offer.
Generally, an offer takes effect when it is communicated to the offeree. Thus, before an offer can be accepted the offeree must know of the existence of the offer and an offeree’s acceptance which consists of the performance of a stipulated act must be made in response to the offer so as to constitute a bargain.

Gibbons v. Proctor : The respondent , Proctor, on May 29 instructed printers to prepare handbills offering a reward for information leading to the conviction of a person who had committed a criminal assault. The information was to be given to Police Superintendent named Penn. The printed handbills were delivered to Superintendent Penn in the evening of the 29th and he sent them by post to neighboring Police Stations where they were to arrive on the morning of mary 30. Before that happened however, -in the early hours of May 29, the appellant, Gibbons, a Police Officer, met another Policeman named Coppin. Coppin showed Gibbons his notebook , which contained a description of the offender for whose conviction the reward was later to be offered.
Gibbons realized that the description corresponded with that of a man he knew who was already in custody for another offence and told Coppin to inform Superintendent Penn. On the afternoon of May 29, Coppin told his superior, who in turn wrote to Superintendent Penn. Penn received the letter on the morning of may 30 –the morning on which the handbills reached the local Police Station. The prisoner indicted was later convicted and Gibbons sued for the reward.
It was held at first instance that Gibbons could not recover the reward because the offer of reward had not been published until after the information had been given. On appeal , it was held that the information was passed through his fellow Policemen as his agent to forward the information to the proper officer Penn and that the information ultimately reached Penna at a time when the plaintiff knew that the reward had been offered-the information having been given to Penn after the offer was made.

The requirement that an offeree must know of the offer at the time of the alleged acceptance accounts for the rule that cross offers do not create a contract. Thus where two persons make identical offers to each other simultaneously (cross offers), neither party knowing of the other’s offer at the time of making his own , the two offers do not constitute a contract. In the classic case of Tinn v. Hoffman & Co, the defendant wrote to plaintiff offering to sell plaintiff a quantity of iron at a certain price. On the same day plaintiff wrote, offering to buy iron from the defendant at the same price. The letters crossed in the post. The court held that cross offers are not an acceptance of each other and therefore do not create a binding contract. This position could be supported on the ground that to ensure certainty, an acceptance can only be effective if it is made with reference to previous offer such that the offer and the purported acceptance can be deemed to constitute one bargain.

WHAT ARE THE MODES OF TERMINATION OF OFFERS?

Rejection of Offer
Generally, an offer may be terminated by a rejection or counter-offer, which has been communicated to the offeror.

Lapse of Time : Where there is a time for the duration of the offer and there is no acceptance within the specified period the offer lapses. Where no time limit is fixed for the duration of the offer, the offer lapses after the expiration of a reasonable time. Relevant factors in determining what is a reasonable time may include rapid fluctuations in price, the perishable nature of goods involved, the mode of communication of the offer (by telegram or telephone) indicating the some urgency and the customs of the relevant trade. See Aning v Knigful.

Revocation of Offer
It is a basic principle of contract law that an offer may be revoked at any time before acceptance. Thus, once the offer is effectively revoked it is terminated and the offeree cannot thereafter accept it. In some cases however, the offeror may make an additional promise to keep the offer open for acceptance by the offeree for a specified period of time. Such offers are often referred to as “firm offers”. What then is the legal effect of a promise to keep an offer open for a specified period of time?

At common law, a promise to keep an offer open for a specified period of time is not binding on the promisor in the absence of consideration. In other words a firm offer is binding on the promisor only if the offeree provides some consideration for the promise to keep the offer open. thus ,at common law, in the absence of consideration an offeror who has promised to keep his offer open for a specified period may revoke his offer during that period as long as the offer has not yet been accepted.

In Routledge v. Grant , the defendant made an offer to take a lease of het plaintiff’s premises. The defendant stated that his offer would be open for acceptance for a period of six weeks. Before the expiration of the six weeks the defendant revoked his offer and the plaintiff sued. The court held that het defendant was entitled to revoke his offer at any time before the offer was accepted since no consideration was given for the promise to keep the offer open.

This common law position has, however, been changed by section 8(1) of the Ghana Contracts Act 1960(Act 25), which states “A promise to keep an offer open for acceptance for a specified time shall not be invalid as a contract by reason only of the absence of any consideration therefor.” Thus under Ghanaian law, a promise to keep an offer open for acceptance for a specified period of time is binding on the promisor even in the absence of consideration.

Generally, for a revocation of an offer to be effective, it must actually be brought to the notice of the offeree. Thus it has been held that where the revocation is communicated by post it does not take effect until the letter of revocation is actually received by the offeree.

In Byrne & Co v. Leon Van Tienhoven, On October 1 , the defendants posted a letter to the plaintiffs offering to sell them 1,000 boxes of tinplates. On October 8, the defendants posted a letter revoking their offer. On October 11, the plaintiffs telegraphed their acceptance. On October 15, the plaintiffs confirmed their acceptance by letter. On October 20th the defendants’ letter of revocation reached the plaintiffs.
The court held that a contract was concluded on October 11. The revocation became effective on October 20, when the letter was received and this was after the contract had been concluded.

Even though there must be actual communication of revocation to the offeree , it has been held in one case that such communication need not come from the offeror himself. It is enough if the offeree receives notice of the revocation through a reliable third party. In Dickinson v. Dodds, The defendant made an offer to the plaintiff to sell certain houses, stating that the offer would be left open until Friday 9 oclock . On Thursday afternoon the plaintiff was informed by one Berry that the defendant had sold the house to one Allan. Nevertheless the plaintiff handed the defendant an acceptance letter a few minutes before the time limit expired. The defendant refused to accept the plaintiff’s acceptance letter saying he had already sold the house to someone else. The plaintiff sued. The court held that there was no contract. The offer had been unequivocally revoked and the revocation had been communicated to the offeree before his purported acceptance. The offer could not be accepted after the offeror had, to the knowledge of the offeree, sold the house to a third party. The court was of the view that a person cannot accept an offer which to his knowledge has been revoked.

Revocation of General Offers:
In the case of general offers made to the whole world such as reward offers, it is sufficient if the offeror revoked the offer through the same channel as the offer was made. In Shuey v. United States, where the plaintiff sought to claim the reward for information provided after the notice advertising the reward offer had been withdrawn through a newspaper advertisement, the court held that het general offer had been effectively revoked. An offer for a unilateral contract is one which requests the performance of an act as opposed to the making of a promise. In unilateral contracts the acceptance consists of the complete performance of the stipulated act and not the making of a return promise.. thus the question arises as to whether the offer could be revoked before the completion of the act which has been started in response to the offer.

For example, in Carlil v. Carbolic Smokeball Co, could the company have revoked its offer after Mrs. Carlil had used the smokeball for say, eight days? Logically, in a true unilateral contract, acceptance should consist of the complete performance of the stipulated act such that it is only after the act has been fully performed that his acceptance is deemed complete. Since an offeror is entitled to revoke his offer at any time before acceptance, it would seem that the offeror is entitled to revoke the offer any time before the act is completed .IT must be noted that the offeree is not bound to perform the act at all. Since the offeror is under no compulsion to complete the performance it only seems logical that the offeror should also be entitled to revoke his offer at any time before the completion of the act.

The strict position however seems less than equitable where the offeree has spent money , time and effort in beginning the performance in reliance on the offeror’s promise. To address this unfairness, it has been proposed in one case that where appropriate , the courts should imply from the offeror’s offer a second promise to het effect that once the offeree embarks upon performance the offeror will not revoke the offer.

In Errington v. Errington, a father bought a house in his own name for his son and daughter in-law-to live in. He allowed them to live in the house and promised that if the couple would pay off the rest of the instalments due on the house the house would become their property. The couple stayed on and paid the installments until the father died, whereupon his personal representative sought to revoke the offer and eject the couple from the house. The court held, per Lord Denning , that this was a unilateral contract and in the circumstances the court could imply a second promise on the part of the offeror that once the couple begun with the payments and continued to pay the house would be conveyed to them. Thus the offeror could not revoke the offer and eject the couple from the house.