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

Appellants sent a telegram asking if Facey would sell property and his lowest price. Facey replied with only the lowest price (£900). Appellants purported to accept. The Privy Council held no contract existed as stating a lowest price was not an offer to sell.

Facts

The Appellants, Harvey and another, were solicitors in Kingston, Jamaica. In October 1891, the Respondent L. M. Facey was negotiating with the Mayor and Council of Kingston to sell a property called Bumper Hall Pen for £900. On 7th October 1891, while Facey was travelling by train, the Appellants sent him a telegram asking: ‘Will you sell us Bumper Hall Pen? Telegraph lowest cash price-answer paid.’ Facey replied by telegram: ‘Lowest price for Bumper Hall Pen 900l.’ The Appellants then sent a further telegram stating: ‘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.’

The Appellants brought an action for specific performance of what they alleged was an agreement for the sale of the property.

Issues

The central issue was whether the exchange of telegrams constituted a concluded contract for the sale and purchase of Bumper Hall Pen between the Appellants and L. M. Facey.

Judgment

The Judicial Committee of the Privy Council, delivering judgment through Lord Morris, reversed the Court of Appeal and restored the judgment of Mr. Justice Curran, holding that there was no concluded contract.

Their Lordships analysed the telegrams carefully. The first telegram from the Appellants asked two distinct questions: firstly, whether Facey was willing to sell to them, and secondly, what his lowest price was. Facey’s reply answered only the second question regarding price.

The Privy Council held that Facey’s telegram stating the lowest price could not be treated as an unconditional offer to sell. Their Lordships stated that the Appellants’ final telegram could not be treated as an acceptance of an offer to sell; rather, it was itself an offer that required acceptance by Facey to complete any contract.

Their Lordships rejected the Appellants’ contention that Facey’s telegram should be read as implying ‘yes’ to the first question about willingness to sell. The judgment emphasised that the contract must appear from the telegrams themselves, and a mere statement of the lowest price at which a vendor would sell contains no implied contract to sell at that price to the persons making the inquiry.

Implications

This case established an important principle in contract law regarding the distinction between an offer and a mere supply of information or invitation to treat. A statement of the minimum price at which a party would be willing to sell does not, without more, constitute an offer capable of acceptance. The case demonstrates that courts will interpret communications strictly according to their terms when determining whether a binding contract has been formed. It remains a leading authority on offer and acceptance, particularly regarding price quotations and their legal effect in contract formation.

Verdict: Appeal allowed. The judgment of the Supreme Court of Jamaica (Court of Appeal) was reversed and the judgment of Mr. Justice Curran dismissing the action was restored. No concluded contract existed between the parties. The Appellants were ordered to pay the Respondents’ costs.

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