Harvey v Facey [1893] UKPC 1 (29 July 1893)

Appellants telegraphed asking if respondents would sell a property and to state the lowest price. Respondents replied with only the lowest price. The court held this was not a binding offer to sell but merely an invitation to treat.

Facts

The appellants, Harvey, were interested in purchasing a property in Jamaica known as Bumper Hall Pen, which was owned by the respondents. A series of telegrams were exchanged between the parties. The first telegram from the appellants on 7th October 1891 read:

“Will you sell us Bumper Hall Pen? Telegraph lowest cash price–answer paid.”

The same day, the respondents (specifically Mr. Facey) replied:

“Lowest price for Bumper Hall Pen £900.”

In response, the appellants telegraphed:

“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, who was in negotiations with the Mayor and Council of the City of Kingston to sell the same property, refused to proceed with the sale to Harvey. The appellants subsequently brought an action for specific performance, arguing that the exchange of telegrams constituted a binding contract.

Issues

The central legal issue before the Judicial Committee of the Privy Council was whether a binding contract for the sale of the Bumper Hall Pen property had been formed. The resolution of this issue turned on the interpretation of the telegrams. Specifically, was the respondents’ telegram stating the ‘lowest price’ an offer to sell, which the appellants could accept, or was it merely a statement of information, otherwise known as an ‘invitation to treat’?

Judgment

The Privy Council, overturning the decision of the Supreme Court of Jamaica, held that no contract had been formed. The judgment, delivered by Lord Morris, carefully analysed the nature of the communications. It was reasoned that the appellants’ initial telegram contained two distinct questions: firstly, a question as to the willingness to sell, and secondly, a request for the lowest price. The respondents’ reply answering only the second question was not an offer, but simply an indication of the minimum price at which they might be willing to sell.

Lord Morris stated:

“Their Lordships are of opinion that the mere statement of the lowest price at which the vendor would sell contains no implied contract to sell at that price to the persons making the inquiry.”

The court reasoned that the appellants’ final telegram, stating ‘we agree to buy’, was in fact an offer to purchase, which the respondents had not accepted. The respondents’ preceding telegram was a precise answer to a specific question about price, not a promise to sell. Therefore, there was no ‘consensus ad idem’ (meeting of the minds) required for contract formation.

“The third telegram from the appellants is treated by the learned Chief Justice as an acceptance of an offer to sell them the property for the sum of 900l. Their Lordships cannot treat the telegram from L. M. Facey as binding him in any respect, except to the extent it does by its terms, viz., the lowest price. Everything else is left open, and the reply telegram from the appellants cannot be treated as an acceptance of an offer to sell to them; it is an offer that required to be accepted by L. M. Facey.”

The court concluded that the appellants’ action for specific performance must fail as there was no concluded contract between the parties.

Implications

This case is a foundational authority in contract law, establishing a crucial distinction between an offer and an invitation to treat. It clarifies that a response to a request for information, such as the statement of a minimum selling price, does not, by itself, constitute an offer that can be accepted to form a binding contract. This principle introduces certainty into pre-contractual negotiations, allowing parties to explore terms and provide information without being prematurely bound. The ruling confirms that an offer must be a clear and unambiguous statement of a willingness to be bound on specific terms. The case remains a cornerstone citation used to illustrate the necessary elements for the formation of a valid contract, particularly the objective communication of an offer capable of acceptance.

Verdict: The appeal was allowed, the judgment of the court below was reversed, and the appellants’ action for specific performance was dismissed with costs.

Source: Harvey & Anor v Facey & Ors [1893] UKPC 1 (29 July 1893)