Harvey Vs Facey, 1893: A Landmark Case in Contract Law

Harvey Vs Facey, 1893: A Landmark Case in Contract Law

The case of Harvey Vs Facey (1893) stands as a cornerstone in understanding the legal distinction between an Offer and an Invitation to Treat. This case highlights the nuances of contractual communication and the interpretation of intent in commercial dealings. Below, we delve into the facts, issues, judgment, and the legal principles established by this case, as well as its relevance to Indian Contract Law.

Facts of the Case

Harvey (the appellant) was interested in purchasing a piece of property owned by Facey (the respondent). Harvey sent a telegram to Facey stating: “Will you sell us Bumper Hall Pen? Telegraph lowest cash price.” Facey replied: “Lowest price for Bumper Hall Pen £900.” Harvey then sent another telegram: “We agree to buy Bumper Hall Pen for £900 asked by you.”

Facey did not respond to Harvey’s final telegram, and Harvey initiated legal proceedings, claiming that a valid contract had been formed.

Issues Raised

Was Facey’s reply (£900) an offer capable of acceptance?

Did Harvey’s acceptance of the £900 price create a binding contract?

What constitutes an offer versus an invitation to treat?

Judgment of the Court

The Judicial Committee of the Privy Council held that Facey’s statement of “lowest price for Bumper Hall Pen £900” was merely a response to a request for information. It did not indicate an intention to be bound by a contract.

Facey’s reply was an invitation to treat, not an offer. An invitation to treat is a preliminary communication expressing a willingness to negotiate but not an intention to enter into a binding contract.

Since there was no offer, Harvey’s telegram purporting to accept Facey’s price could not form a contract. Thus, the court ruled in favor of Facey, and no enforceable contract was deemed to exist.

Pollock & Mulla The Indian Contract & Specific Relief Acts

Legal Concepts Explained

Offer: Defined under Section 2(a) of the Indian Contract Act, 1872, an offer (or proposal) is when a person signifies to another their willingness to do or abstain from doing something with a view to obtaining the other’s assent.

Invitation to Treat: An invitation to treat is not explicitly defined in Indian law but is recognized in legal jurisprudence as an indication that a person is willing to enter into negotiations. It lacks the intention to create legal relations unless followed by an offer and subsequent acceptance.

Key Differences:

Offer	Invitation to Treat
Shows readiness to create a binding contract.	Expresses willingness to negotiate further.
Capable of being accepted to form a contract.	Cannot be accepted to form a contract
Proposal to sell goods at a specified price.	Display of goods in a shop window or catalog.

Relevance to Indian Contract Law

The principles laid down in Harvey Vs Facey, 1893 align closely with the provisions of the Indian Contract Act, 1872:

Section 2(a): Defines an offer or proposal.

Section 2(b): Specifies that a proposal becomes a promise when accepted.

Section 7: States that an acceptance must be absolute and unqualified.

Section 10: Highlights the requirement of intention to create legal obligations for a valid contract.

Conclusion

The case of Harvey Vs Facey underscores the critical distinction between an offer and an invitation to treat, shaping the understanding of contractual communications. It serves as a guiding precedent for interpreting intent in commercial dealings, ensuring clarity in contract formation. For students and professionals in law, this case emphasizes the importance of clear communication and the necessity of mutual consent in binding agreements.

By understanding the principles elucidated in this case, one can better appreciate the intricacies of contract law and its practical applications in both English and Indian legal contexts.

Anson's Law of Contract