Harvey vs Facey case is one of the important case law in contract law as it defines the difference between an invitation to offer and offer and it also throws a light explaining completion of the offer as it plays a very important role in the agreement formation.
Judgment of the lords of the Judicial Committee of the Privy Council on the appeal of Harvey v Facey and others.
From the Supreme Court of Judicature of Jamaica.
The Lord Chancellor, Lord Watson, Lord Hobhouse, Lord McNaughton, Lord Morris [Delivery of the Judgement], Lord Shand.
RELEVANT ACT AND SECTION:
- Section 2(a), Indian Contract Act, 1872–“When one person signifies to another his willingness to do or to abstain from doing anything, with a view to obtaining the assent of that other to such act or abstinence, he is said to make a proposal.”
- Section 2(b), Indian Contract Act, 1872–“When the person to whom the proposal is made signifies his assent thereto, the proposal is said to be accepted. A proposal, when accepted, becomes a promise”
- Once the acceptance is communicated, it can’t be revoked or withdrawn.
- An invitation to treat (offer)–It’s a concept of Contract Law which refers to an invitation for a party to make an offer to enter into contractual negotiation.
FACTS OF THE CASE:
- Appellants, Mr. Harvey, who was running a partnership company in Jamaica, wanted to purchase a property owned by Mr. Facey, who was also negotiating with the Mayor and Council of the Kingdom of Kingston City for the same property.
- On October 6th, 1893 appellant sent a telegram regarding the purchase of property to Mr. Facey who was traveling on the train on that day as he did not want that the property was sold to Kingston City.
- Telegram said “Will you sell us Bumper Hall Pen? Telegraph lowest cash price-answer paid.” Replying to the question Mr. Facey said “Lowest price for Bumper Hall Pen£900.” Furthermore, Mr. Harvey Replied “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.”
- Mr. Facey refuses to sell the property resulting in Mr. Harvey sued him, claiming that the contract existed between him and stated that the telegram was an offer and that he has accepted it.
- The Petition was dismissed on the first trial by Justice Curran on the ground that “The agreement as alleged by the Appellant did not denote a concluded contract” but won the claim in the appellate court which quashed the trial court judgement declaring that the binding agreement had been proved. Upon taking leave from the appellate court, he appeals to the Queen of Council (i.e. The Privy Council).
- Was there an explicit offer from Mr. Facey to Mr. Harvey for the sale of the said property for the consideration of £900 and is it capable of acceptance?
- Was there a valid contract or not?
The Privy Council held that no agreement has ever existed between the parties. The first conversation is only a request for information, not an offer that could be accepted. Therefore, the telegram sent by Mr. Facey was not credible. It was concluded that the telegram sent by Mr. Facey is only a piece of information. At no point in time, Mr. Facey made an offer that could be accepted.
A valid contract requires a proposal and an acceptance to it and to make contract binding acceptance of the proposal must be notified to the proposer because a legally enforceable agreement required sureness to hold. This case clearly explains the differentiation between invitation to offer and offer and it also throws a light explaining the nature of the offer as it plays a very important role.