Sec 4- the communication of proposal is
complete when it comes to the knowledge of
the person to whom it is made.
A proposes by a letter, to sell a house to B at a certain
price. The communication of the proposal is
complete when B receives the letter.
Lalman shukla v Gauri Dutt [(1913) 11 ALJ
The nephew of the defendant absconded from
Defendant sent his servants, including the
plaintiff to different places in search of the boy.
After this the defendant issued hand bills
offering a reward of Rs 501 to anyone who
might find out the boy.
The plaintiff traced and found the boy at
The defendant paid him twenty Rupees and
The plaintiff was terminated after some six
Then he brought a suit, claiming Rs 499 out of
the amount of the reward offered by the
The court held:
The claim can not be regarded as one on the basis of
The plaintiff was in the service of the defendant
He was sent to search the boy as servant
The reward was offered when he was under the
obligation to find the boy.
There was already an obligation to find the boy
which can not be considered as consideration for the
In order to constitute a contract there must be
an acceptance of the offer and there can be no
acceptance unless there is knowledge of the
The knowledge of an offer is pre requisite
before it can be accepted.
The question of acceptance does not arise when
the proposal is unknown.
Mackilligan v Compagnie[(1877) ILR 6 Cal
The plaintiff accepted a steamer ticket containing
conditions printed in the French language.
He pleaded ignorance of those terms and claimed
that those terms are not communicated to him.
It was held that:
The test to apply in this situation is that whether the
offeror has done all that is reasonably necessory to
draw the attention of the offeree to those terms or
If sufficient indication given at the face of the
document regarding the terms and conditions
printed at the back the offeree can not claim
The conditions and the offer is communicated.
Invitation to treat
Harvey v Facey  AC 552 (PC)
The case involved negotiations over a property
in Jamaica. Defendant Facey had been carrying on
negotiations with the Mayor and Council of Kingston
to sell a piece of property to Kingston City. Facey was
traveling on a train, and Appellant Harvey , who also
wanted the property, sent Facey a telegram which said:
"Will you sell us Bumper Hall Pen? Telegraph lowest cash
Facey replied on the same day:
"Lowest price for Bumper Hall Pen £900."
Harvey then replied in the following words:
"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."
Facey, however refused to sell at that price, at
which Harvey sued. Facey successfully defended
his action at trial, but Harvey appealed to the
Supreme Court, which reversed the trial court
decision. Facey appealed the Supreme Court
decision to the Privy Council. The Privy Council
reversed the Supreme Court's opinion, reinstating
the trial court's decision and stating the reason for
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 the question
regarding the lowest price of the
property, Defendant did not make an
affirmative answer to the first question
regarding his willingness to sell.
The court held that the defendant had made an
invitation to trade and not an offer.
Pharmaceutical Society of Great Britain v
Boots Cash Chemists (Southern)
Ltd EWCA Civ 6
Boots Cash Chemists had just implemented a new
method for its customers to buy certain medicines.
They would let shoppers pick drugs off the shelves
in the chemist, and then pay for them at the
till, rather than require all medicines to be behind a
counter and for an assistant to have to get what was
The Pharmaceutical Society of Great
Britain objected, and argued that under
the Pharmacy and Poisons Act 1933, this was an
unlawful practice. Under s 18(1), a pharmacist
needed to supervise at the point where "the sale
is effected", when the product was one listed on
the 1933 Act's schedule of poisons.
The Society argued that displays of goods were
an "offer" and when a shopper selected and put
the drugs into their shopping basket this was
an "acceptance". Therefore because no
pharmacist had supervised the transaction at
this point, Boots was in breach of the Act. Boots
argued that the sale was still only effected at
Both the Queen's Bench Division of the High
Court and the Court of Appeal sided with Boots.
They held that the display of goods was not an
offer. Rather, by placing the goods into the
basket, it was the customer that made the offer to
buy the goods.
This offer could be either accepted or rejected by
the pharmacist at the cash desk.
The moment of the completion of contract was at
the cash desk, in the presence of the supervising
pharmacist. Therefore, there was no violation of