Contract Law Case Study: Bob and Toshiba Electronics Agreement

This case study examines a scenario involving Bob and Toshiba Electronics to determine if a valid contract was formed. It applies principles of contract law, including offer and acceptance, invitation to treat, and revocation of an offer, drawing from landmark cases like Pharmaceutical Society of Great Britain v Boots Cash Chemists and Partridge v Crittenden. The analysis concludes that Toshiba's advertisement was an invitation to treat, not a legal offer, and Bob's subsequent interactions did not result in a binding contract. The study further explores the implications of counteroffers and the timing of acceptance, ultimately finding that no contractual agreement was established between Bob and Toshiba Electronics on either Thursday or Friday. Desklib provides this and other solved assignments for students.

Running Head: BUSINESS LAW
Business Law
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Issue
The issues which has been determined in relation to the facts stated in the scenario is that
whether on Thursday or Friday a valid contract had been formed between Bob and Toshiba
electronics via their agent Mollie.
Rule
The case of Pharmaceutical Society of Great Britain v Boots Cash Chemists (Southern) Ltd
[1953] 1 QB 401 is a famous English case which provided a decision in relation to the legal
nature of an offer. A Landmark ruling has been made in the case which stated that goods which
are displayed in store having an attached price tag do not make it an offer on the part of the store
owner instead they are considered as an invitation to offer. In this case the court further signified
that the display of goods in itself is not an offer rather when the customers put the goods in the
basket and move to the counter of the store to purchase the goods it constitutes an offer which
would be either rejected or accepted by the shop owner. Therefore when an invitation to treat is
made there is no legal obligation on the part of the party making the treat.
In another famous English case of Partridge v Crittenden [1968] 1 WLR 1204, it was held by the
court that any advertisement cannot be considered as a legal offer. This is because if
advertisements are considered as legal offers then a person who has advertised in relation to a
certain product would have to sell the product to each and every person who makes an
acceptance in relation to it. Therefore the plaintiff who made an advertisement for the sale of
protected birds in a newspaper was not held guilty by the court as his advertisement never
constituted a legally valid offer.

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An offer can be accepted by any person who the offeror had the intention of making the offer. A
person to whom the offer has not been made cannot accept the offer. Further in the case of Byrne
& Co v Leon Van Tien Hoven & Co [1880] 5 CPD 344 it had been stated by the court that an
offer can only be accepted before it has been revoked by the person making it. Revocation of an
offer means letting the offeree known that the offer is no longer interested in going forward with
the terms of the offer. However this case also signifies that until and unless the revocation has
actually been received by the offeree though it is not valid.
In addition the Court ruled in the case of Ramsgate Victoria Hotel v Montefoire (1866) LR 1 Ex
109 that an offer can elapse by time and until the time stated by the offer has elapsed and no
revocation has been made it has the capacity of being accepted by the person to whom it has
been made.
In the case of Hyde v Wrench (1840) 49 ER 132 the court made it clear that and acceptance has
to be unequivocal. If the acceptance does not comply with the terms of the offer or it is not the
mirror image of the terms of the offer it cannot be a valid acceptance. Any manipulation of the
original offer terms makes the acceptance a counter offer. The court also signified in this case
that counter offer brings the original offer to an end.
Application
In the given situation it has been provided that and advertisement has been made by Toshiba
electronics pty Limited who is a vendor of electronic equipments that they are going to offer 75
inches Sony Bravia LED televisions only at a price of $3,500. In response to the advertisement
Bob went to the nearest store next day in order to purchase the television. As soon as he met the
manager of the store he informed him that he accepts the offer of Sony Bravia LED television

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which had been advertised. However the manager told him to slow down as the stock has been
sold out because of the rush. In the given situation it has to be analysed that whether a valid offer
has been made by Toshiba Electronics pty Limited or not. In the above discussed case of
Partridge v Crittenden [1968] 1 WLR 1204 it had been ruled by the court that f advertisements
are considered as legal offers then a person who has advertised in relation to a certain product
would have to sell the product to each and every person who makes an acceptance in relation to
it. In the same way if the principles of this case are applied in the present situation it can be
stated that if the advertisement which had been made by Toshiba electronics would be
considered as an offer then Toshiba electronics would be liable to sell the television to any
number of person who accept the offer even if they do not have the number of required
televisions. Therefore through the application of the above discussed provisions in the given
circumstances it can be stated that there has been only an invitation to treat made by Toshiba
electronics and not a valid offer. Where there has only been an invitation to treat there is no legal
liability which Toshiba electronics have. Further through the application of the Society of Great
Britain v Boots Cash Chemists case which stated that when the customers put the goods in the
basket and move to the counter of the store to purchase the goods it constitutes an offer which
would be either rejected or accepted by the shop owner, It can be evidently said that Bob is the
one who has made the offer in the given situation and it is up on the shopkeeper or its manager to
decide whether to accept or reject the offer. Therefore through the applications of rules relating
to contract law it is clear that no contract had been formed between bob and Toshiba electronics
on Thursday.
Further an offer has been made by the manager of Toshiba electronics that she is willing to sell a
demonstration model of the same television to Bob at a price of$2,000. However as Bob was not

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sure about the deal he said that he is going to think about it. Further it has been stated by the sale
manager that she would keep the set aside for him till Friday only if he provided her with a$10
booking money. However as Bob was unsure that arrangements had been refused by him. He
also stated to the manager that he will let her know by Friday. Through the application of Hyde v
Wrench is where it was ruled by the court that an offer comes to an end once it has been rejected
through the counter offer it can be clearly stated that the refusal of Bob to agree with the
arrangement and provide his own time of acceptance in relation to the offer resulted in a counter
offer. Therefore the offer which had been made by the manager of selling him the demonstration
model at a price of $2,000 was ended as soon as Bob refused to agree with the arrangements. The
television had been sold by the manager to another person next day at a price of $2,500. It has
been provided by the scenario that Bob made an attempt to accept the offer made by the manager
on Thursday at 10:30 a.m. on Friday. However, as discussed above as the offer had already come
to an end when the arrangements had been refused by Bob there is no obligation which the
manager has in relation to selling the television to Bob. Therefore in the given situation there has
not been any contract form between Bob and Toshiba electronics either on Thursday or on
Friday.
Conclusion
There has been no contract form between bob and Toshiba electronics either on Thursday or on
Friday.

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References
Byrne & Co v Leon Van Tien Hoven & Co [1880] 5 CPD 344
Great Britain v Boots Cash Chemists (Southern) Ltd [1953] 1 QB 401
Hyde v Wrench (1840) 49 ER 132
Partridge v Crittenden [1968] 1 WLR 1204
Ramsgate Victoria Hotel v Montefoire (1866) LR 1 Ex 109