I have prepared an outline for microeconomics mid-term examination, you are welcome to download :)
Click here to download
2007年11月2日星期五
2007年10月11日星期四
consideration
1) payment or money. 2) a vital element in the law of contracts, consideration is a benefit which must be bargained for between the parties, and is the essential reason for a party entering into a contract. Consideration must be of value (at least to the parties), and is exchanged for the performance or promise of performance by the other party (such performance itself is consideration). In a contract, one consideration (thing given) is exchanged for another consideration. Not doing an act (forbearance) can be consideration, such as "I will pay you $1,000 not to build a road next to my fence." Sometimes consideration is "nominal," meaning it is stated for form only, such as "$10 as consideration for conveyance of title," which is used to hide the true amount being paid. Contracts may become unenforceable or rescindable (undone by rescission) for "failure of consideration" when the intended consideration is found to be worth less than expected, is damaged or destroyed, or performance is not made properly (as when the mechanic does not make the car run properly). Acts which are illegal or so immoral that they are against established public policy cannot serve as consideration for enforceable contracts. Examples: prostitution, gambling where outlawed, hiring someone to break a skater's knee or inducing someone to breach an agreement (talk someone into backing out of a promise). 1) payment or money. 2) a vital element in the law of contracts, consideration is a benefit which must be bargained for between the parties, and is the essential reason for a party entering into a contract. Consideration must be of value (at least to the parties), and is exchanged for the performance or promise of performance by the other party (such performance itself is consideration). In a contract, one consideration (thing given) is exchanged for another consideration. Not doing an act (forbearance) can be consideration, such as "I will pay you $1,000 not to build a road next to my fence." Sometimes consideration is "nominal," meaning it is stated for form only, such as "$10 as consideration for conveyance of title," which is used to hide the true amount being paid. Contracts may become unenforceable or rescindable (undone by rescission) for "failure of consideration" when the intended consideration is found to be worth less than expected, is damaged or destroyed, or performance is not made properly (as when the mechanic does not make the car run properly). Acts which are illegal or so immoral that they are against established public policy cannot serve as consideration for enforceable contracts. Examples: prostitution, gambling where outlawed, hiring someone to break a skater's knee or inducing someone to breach an agreement (talk someone into backing out of a promise).
2007年10月9日星期二
Binomial Distribution in Excel
Below you can download the work I have done for the discrete Probability distributions of emplyees leaving MUST FMA each year, using binomial distribution tool in Excel.
Also, I find a quite helpful pdf document 'Excel中的统计应用', you can also download it here .
2007年10月7日星期日
Contract Law notes
Here are some perfect notes which I found on http://www.jaani.net/resources/law_notes/contracts/
" These notes are based on memoranda taken during lectures, whilst reading primary and secondary materials, upon reflection, and in critique. They are structured around areas of contract law, and are intended as an introductory reference to the law as I understand it.
The jurisdiction to which these writings are most applicable is Victoria, Australia. However, other Australian states are reasonbly similar. Some parallels exist between the principles of Australian contract law and those of other common law countries, and the notes may serve as a summary for comparative purposes in that regard.
Of other students, who may make use of these materials in their preparation for examinations or moots, I ask only one thing: please report any errors — suspected or blatant, legal or typographical — to the author by one of the following means: the comments section at the bottom of the page,
Topic Summaries
Part I - Introduction
Part II - Contract in Private Law
Part VIII - Equitable Estoppel
Part IX - The Doctrine of Privity
Part X - Incorporation of Terms
2007年9月25日星期二
Works done & find
For Chapter 2 we have learned several kinds of graphs. I have explored how to make these graphs with Excel, and below you can download works I have done for Appendix 2.2 on P66 to P75. And you are also welcome to contact me and share your works with the others!
SoftDrinkP68-70.xls
AuditP70-71.xls
RestaurantP72-75.xls
And it is also easy to do histogram by Excel:
AuditHistogrambyExcel.xls
I find a tool that can automaticly make stem and leaf graph by Excel:
Stem-and-leaf plot
Also, there is an interesting article I found which described
The Charts that Excel Cannot Do
SoftDrinkP68-70.xls
AuditP70-71.xls
RestaurantP72-75.xls
And it is also easy to do histogram by Excel:
AuditHistogrambyExcel.xls
I find a tool that can automaticly make stem and leaf graph by Excel:
Stem-and-leaf plot
Also, there is an interesting article I found which described
The Charts that Excel Cannot Do
2007年9月22日星期六
ACCEPTANCE
(from:http://www.lawteacher.net/Contract/Agreement/Agreement%20Cases.htm)
Williams v Carwardine (1833)
The defendant offered a reward for information leading to the conviction of a murderer. The plaintiff knew of this offer and gave information that it was her husband after he had beaten her, believing she had not long to live and to ease her conscience. It was held that the plaintiff was entitled to the reward as she knew about it and her motive in giving the information was irrelevant.
The buyers, an English company, by a telex, sent from London to Vienna, accepted the terms of sale offered by the sellers, an Austrian company. The buyers issued a writ claiming damages for breach of the contract.
The House of Lords held that the service of the writ should be set aside because the contract had not been made within the court's jurisdiction. Lord Wilberforce stated that the present case is, as Entores itself, the simple case of instantaneous communication between principals, and, in accordance with the general rule, involves that the contract (if any) was made when and where the acceptance was received. This was in Vienna.
Adams v Lindsell (1818)
2 Sept. The defendant wrote to the plaintiff offering to sell goods asking for a reply "in the course of post"5 Sept. The plaintiff received the letter and sent a letter of acceptance.9 Sept. The defendant received the plaintiff's acceptance but on 8 Sept had sold the goods to a third party.
It was held that a binding contract was made when the plaintiff posted the letter of acceptance on 5 Sept, so the defendant was in breach of contract.
Adams v Lindsell (1818)
2 Sept. The defendant wrote to the plaintiff offering to sell goods asking for a reply "in the course of post"5 Sept. The plaintiff received the letter and sent a letter of acceptance.9 Sept. The defendant received the plaintiff's acceptance but on 8 Sept had sold the goods to a third party.
It was held that a binding contract was made when the plaintiff posted the letter of acceptance on 5 Sept, so the defendant was in breach of contract.
Household v Grant (1879)
G applied for shares in the plaintiff company. A letter of allotment of shares was posted but G never received it. When the company went into liquidation G was asked, as a shareholder, to contribute the amount still outstanding on the shares he held. The trial judge found for the plaintiff.
The Court of Appeal affirmed the judgment. Thesiger LJ stated that "Upon balance of conveniences and inconveniences it seems to me … it was more consistent with the acts and declarations of the parties in this case to consider the contract complete and absolutely binding on the transmission of the notice of allotment through the post, as the medium of communication that the parties themselves contemplated, instead of postponing its completion until the notice had been received by the defendant."
Williams v Carwardine (1833)
The defendant offered a reward for information leading to the conviction of a murderer. The plaintiff knew of this offer and gave information that it was her husband after he had beaten her, believing she had not long to live and to ease her conscience. It was held that the plaintiff was entitled to the reward as she knew about it and her motive in giving the information was irrelevant.
Tinn v Hoffman (1873)
Acceptance was requested by return of post. Honeyman J said: "That does not mean exclusively a reply by letter or return of post, but you may reply by telegram or by verbal message or by any other means not later than a letter written by return of post."
Butler Machine Tool v Ex-Cell-O Corporation (1979)
The plaintiffs offered to sell a machine to the defendants. The terms of the offer included a condition that all orders were accepted only on the sellers' terms which were to prevail over any terms and conditions in the buyers' order. The defendants replied ordering the machine but on different terms and conditions. At the foot of the order was a tear-off slip reading, "We accept your order on the Terms and Conditions stated thereon." The plaintiffs signed and returned it, writing, "your official order … is being entered in accordance with our revised quotation …".
The Court of Appeal had to decide on which set of terms the contract was made. Lord Denning M.R. stated:
In many of these cases our traditional analysis of offer, counter-offer, rejection, acceptance and so forth is out-of-date. This was observed by Lord Wilberforce in New Zealand Shipping Co Ltd v AM Satterthwaite. The better way is to look at all the documents passing between the parties and glean from them, or from the conduct of the parties, whether they have reached agreement on all material points, even though there may be differences between the forms and conditions printed on the back of them. As Lord Cairns L.C. said in Brogden v Metropolitan Railway Co (1877):
… there may be a consensus between the parties far short of a complete mode of expressing it, and that consensus may be discovered from letters or from other documents of an imperfect and incomplete description.
Applying this guide, it will be found that in most cases when there is a "battle of forms" there is a contract as soon as the last of the forms is sent and received without objection being taken to it. Therefore, judgment was entered for the buyers.
Lord Denning in Entores v Miles Far East Corp (1955)
If a man shouts an offer to a man across a river but the reply is not heard because of a plane flying overhead, there is no contract. The offeree must wait and then shout back his acceptance so that the offeror can hear it.
The buyers, an English company, by a telex, sent from London to Vienna, accepted the terms of sale offered by the sellers, an Austrian company. The buyers issued a writ claiming damages for breach of the contract.
The House of Lords held that the service of the writ should be set aside because the contract had not been made within the court's jurisdiction. Lord Wilberforce stated that the present case is, as Entores itself, the simple case of instantaneous communication between principals, and, in accordance with the general rule, involves that the contract (if any) was made when and where the acceptance was received. This was in Vienna.
Adams v Lindsell (1818)
2 Sept. The defendant wrote to the plaintiff offering to sell goods asking for a reply "in the course of post"5 Sept. The plaintiff received the letter and sent a letter of acceptance.9 Sept. The defendant received the plaintiff's acceptance but on 8 Sept had sold the goods to a third party.
It was held that a binding contract was made when the plaintiff posted the letter of acceptance on 5 Sept, so the defendant was in breach of contract.
Adams v Lindsell (1818)
2 Sept. The defendant wrote to the plaintiff offering to sell goods asking for a reply "in the course of post"5 Sept. The plaintiff received the letter and sent a letter of acceptance.9 Sept. The defendant received the plaintiff's acceptance but on 8 Sept had sold the goods to a third party.
It was held that a binding contract was made when the plaintiff posted the letter of acceptance on 5 Sept, so the defendant was in breach of contract.
Household v Grant (1879)
G applied for shares in the plaintiff company. A letter of allotment of shares was posted but G never received it. When the company went into liquidation G was asked, as a shareholder, to contribute the amount still outstanding on the shares he held. The trial judge found for the plaintiff.
The Court of Appeal affirmed the judgment. Thesiger LJ stated that "Upon balance of conveniences and inconveniences it seems to me … it was more consistent with the acts and declarations of the parties in this case to consider the contract complete and absolutely binding on the transmission of the notice of allotment through the post, as the medium of communication that the parties themselves contemplated, instead of postponing its completion until the notice had been received by the defendant."
2007年9月19日星期三
common stock
common stock
Securities representing equity ownership in a corporation, providing voting rights, and entitling the holder to a share of the company's success through dividends and/or capital appreciation. In the event of liquidation, common stockholders have rights to a company's assets only after bondholders, other debt holders, and preferred stockholders have been satisfied. Typically, common stockholders receive one vote per share to elect the company’s board of directors (although the number of votes is not always directly proportional to the number of shares owned). The board of directors is the group of individuals that represents the owners of the corporation and oversees major decisions for the company. Common shareholders also receive voting rights regarding other company matters such as stock splits and company objectives. In addition to voting rights, common shareholders sometimes enjoy what are called "preemptive rights". Preemptive rights allow common shareholders to maintain their proportional ownership in the company in the event that the company issues another offering of stock. This means that common shareholders with preemptive rights have the right but not the obligation to purchase as many new shares of the stock as it would take to maintain their proportional ownership in the company. also called junior equity.
Securities representing equity ownership in a corporation, providing voting rights, and entitling the holder to a share of the company's success through dividends and/or capital appreciation. In the event of liquidation, common stockholders have rights to a company's assets only after bondholders, other debt holders, and preferred stockholders have been satisfied. Typically, common stockholders receive one vote per share to elect the company’s board of directors (although the number of votes is not always directly proportional to the number of shares owned). The board of directors is the group of individuals that represents the owners of the corporation and oversees major decisions for the company. Common shareholders also receive voting rights regarding other company matters such as stock splits and company objectives. In addition to voting rights, common shareholders sometimes enjoy what are called "preemptive rights". Preemptive rights allow common shareholders to maintain their proportional ownership in the company in the event that the company issues another offering of stock. This means that common shareholders with preemptive rights have the right but not the obligation to purchase as many new shares of the stock as it would take to maintain their proportional ownership in the company. also called junior equity.
2007年9月16日星期日
Words Of Wisdom
1. A day without sunshine is like night
.2. On the other hand, you have different fingers.
3. 42.7 percent of all statistics are made up on the spot.
4. 99 percent of lawyers give the rest a bad name.
5. Remember, half the people you know are below average.
6. He who laughs last, thinks slowest.
7. Depression is merely anger without enthusiasm.
8. The early bird may get the worm, but the second mouse gets the cheese in the trap.
9. Support bacteria. They're the only culture some people have.
10. A clear conscience is usually the sign of a bad memory.
11. Change is inevitable, except from vending machines.
12. If you think nobody cares, try missing a couple of payments.
13. How many of you believe in psycho-kinesis? Raise my hand.
14. OK, so what's the speed of dark?
15. When everything is coming your way, you're in the wrong lane.
16. Hard work pays off in the future. Laziness pays off now.
17. How much deeper would the ocean be without sponges?
18. Eagles may soar, but weasels don't get sucked into jet engines
19. What happens if you get scared half to death, twice?
20. Why do psychics have to ask you for your name?
21. Inside every older person is a younger person wondering, "What the hell happened?"
22. Just remember -- if the world didn't suck, we would all fall off.
23. Light travels faster than sound. That's why some people appear bright until you hear them speak.
24. Life isn't like a box of chocolates. It's more like a jar of jalapenos.
2007年9月11日星期二
unilateral contract and bilateral contract
unilateral contract
n. an agreement to pay in exchange for performance, if the potential performer chooses to act. A "unilateral" contract is distinguished from a "bilateral" contract, which is an exchange of one promise for another. Example of a unilateral contract: "I will pay you $1,000 if you bring my car from Cleveland to San Francisco." Bringing the car is acceptance. The difference is normally only of academic interest.
bilateral contract
n. an agreement in which the parties exchange promises for each to do something in the future. "Susette Seller promises to sell her house to Bobby Buyer and Buyer promises to pay Seller $100,000 for it." This is distinct from a "unilateral contract," in which there is a promise to pay if the other party chooses to do something. "I'll pay you $1,000 if you'll stop smoking." These are basically academic differences which are only important in the rare instance in which one person has acted in anticipation that the other will have obligations as well.
n. an agreement to pay in exchange for performance, if the potential performer chooses to act. A "unilateral" contract is distinguished from a "bilateral" contract, which is an exchange of one promise for another. Example of a unilateral contract: "I will pay you $1,000 if you bring my car from Cleveland to San Francisco." Bringing the car is acceptance. The difference is normally only of academic interest.
bilateral contract
n. an agreement in which the parties exchange promises for each to do something in the future. "Susette Seller promises to sell her house to Bobby Buyer and Buyer promises to pay Seller $100,000 for it." This is distinct from a "unilateral contract," in which there is a promise to pay if the other party chooses to do something. "I'll pay you $1,000 if you'll stop smoking." These are basically academic differences which are only important in the rare instance in which one person has acted in anticipation that the other will have obligations as well.
2007年9月9日星期日
Return on assets (ROA)
Return on assets (ROA)Indicator of profitability. Determined by dividing net income for the past 12 months by total average assets. Result is shown as a percentage. ROA can be decomposed into return on sales (net income/sales) multiplied by asset utilization (sales/assets).
Note: Some investors add interest expense back into net income when performing this calculation because they'd like to use operating returns before cost of borrowing.
ROA tells you what earnings were generated from invested capital (assets). ROA for public companies can vary substantially and will be highly dependent on the industry. This is why when using ROA as a comparative measure, it is best to compare it against a company's previous ROA numbers or the ROA of a similar company. The assets of the company are comprised of both debt and equity. Both of these types of financing are used to fund the operations of the company. The ROA figure gives investors an idea of how effectively the company is converting the money it has to invest into net income. The higher the ROA number, the better, because the company is earning more money on less investment. For example, if one company has a net income of $1 million and total assets of $5 million, its ROA is 20%; however, if another company earns the same amount but has total assets of $10 million, it has an ROA of 10%. Based on this example, the first company is better at converting its investment into profit. When you really think about it, management's most important job is to make wise choices in allocating its resources. Anybody can make a profit by throwing a ton of money at a problem, but very few managers excel at making large profits with little investment.
An indicator of how profitable a company is relative to its total assets. ROA gives an idea as to how efficient management is at using its assets to generate earnings. Calculated by dividing a company's annual earnings by its total assets, ROA is displayed as a percentage. Sometimes this is referred to as "return on investment".
Note: Some investors add interest expense back into net income when performing this calculation because they'd like to use operating returns before cost of borrowing.
ROA tells you what earnings were generated from invested capital (assets). ROA for public companies can vary substantially and will be highly dependent on the industry. This is why when using ROA as a comparative measure, it is best to compare it against a company's previous ROA numbers or the ROA of a similar company. The assets of the company are comprised of both debt and equity. Both of these types of financing are used to fund the operations of the company. The ROA figure gives investors an idea of how effectively the company is converting the money it has to invest into net income. The higher the ROA number, the better, because the company is earning more money on less investment. For example, if one company has a net income of $1 million and total assets of $5 million, its ROA is 20%; however, if another company earns the same amount but has total assets of $10 million, it has an ROA of 10%. Based on this example, the first company is better at converting its investment into profit. When you really think about it, management's most important job is to make wise choices in allocating its resources. Anybody can make a profit by throwing a ton of money at a problem, but very few managers excel at making large profits with little investment.
Termination of offer
1)By revocation
Byrne & Co. v Leon Van Tienhoven & Co (1880)
[This version of the judgment has been edited by Dr Robert N MolesUnderlining where it occurs is for editorial emphasis]
LR 5 CPD 344, Common Pleas Division
The parties exchanged the following correspondence:
1 October: D posted a letter to P offering to sell tinplate.8 October: D posted letter revoking the offer.11 October: P telegraphed acceptance of the offer.15 October: P confirmed acceptance by letter.20 October: P received D's letter of revocation.
At what time would the revocation have taken effect?
HELD - Lindley J
This case raises 2 questions:
1. Is revocation effective prior to its actual communication to the other party?
2. Does posting a letter of revocation constitute communication of it?
A state of mind not notified cannot be regarded in dealings. Whilst it is well accepted that an acceptance takes effect from posting, yet there is no authority to say that a revocation is also effective from posting.
The principle is that the writer of an offer impliedly accepts that a posted answer will be sufficient - and that the post office will act as agent for the purpose. Therefore, delivery to the post office is delivery to the other party. But this principle is not applicable to the withdrawal of an offer. There is no authority or principle that withdrawal is effective before it is received. So the withdrawal was ineffective and the contract completed on 11 October.
Any other view would lead to great inconvenience. Nobody could act on an acceptance until a further stage had been gone through of confirming that a revocation had not been sent to them in the meantime.
Dickinson v Dodds (1876)
2 Ch D 463 Court of Appeal UK
D delivered to P a document stating "I hereby agree to sell to P [a property] for £800-00. This offer to be left over to 12 June 9am."
11 June: P was told by a third party that D was negotiating to sell the property to someone else. P then took to D's house a formal written acceptance of the offer. It was given to a member of the family who forgot to give it to D.
12 June: Before 9am, P gave D a duplicate of the letter of acceptance. D said to P, “you are too late, the property has already been sold”.
The Trial Judge held that there was a binding contract of sale between the parties and ordered specific performance. D appealed.
HELD James LJ
Although the document said "I hereby agree to sell ...", it was only an offer. The fact that it was "left over" until 12 June makes this clear. There was no consideration to keep the property unsold until 12 June, despite the fact that one or maybe both of them thought that at least there was some obligation. "It is clearly settled law, on one of the clearest principles of law, that this promise, being a mere nudum pactum (promise without consideration) was not binding."
There is no authority which requires an express retraction. P knew that D no longer wished to sell the property to him. Prior to the purported acceptance of the offer, P knew that D had revoked it. This knowledge made the revocation effective.
[It may be argued that D's conduct appears far from acceptable. If both parties thought that D was bound, and this is what comes through from the report, then why were their intentions not enforced?
2.By rejection
Tinn v Hoffman (1873)
Acceptance was requested by return of post. Honeyman J said: "That does not mean exclusively a reply by letter or return of post, but you may reply by telegram or by verbal message or by any other means not later than a letter written by return of post."
3.By lapse of time
4By death
Byrne & Co. v Leon Van Tienhoven & Co (1880)
[This version of the judgment has been edited by Dr Robert N MolesUnderlining where it occurs is for editorial emphasis]
LR 5 CPD 344, Common Pleas Division
The parties exchanged the following correspondence:
1 October: D posted a letter to P offering to sell tinplate.8 October: D posted letter revoking the offer.11 October: P telegraphed acceptance of the offer.15 October: P confirmed acceptance by letter.20 October: P received D's letter of revocation.
At what time would the revocation have taken effect?
HELD - Lindley J
This case raises 2 questions:
1. Is revocation effective prior to its actual communication to the other party?
2. Does posting a letter of revocation constitute communication of it?
A state of mind not notified cannot be regarded in dealings. Whilst it is well accepted that an acceptance takes effect from posting, yet there is no authority to say that a revocation is also effective from posting.
The principle is that the writer of an offer impliedly accepts that a posted answer will be sufficient - and that the post office will act as agent for the purpose. Therefore, delivery to the post office is delivery to the other party. But this principle is not applicable to the withdrawal of an offer. There is no authority or principle that withdrawal is effective before it is received. So the withdrawal was ineffective and the contract completed on 11 October.
Any other view would lead to great inconvenience. Nobody could act on an acceptance until a further stage had been gone through of confirming that a revocation had not been sent to them in the meantime.
Dickinson v Dodds (1876)
2 Ch D 463 Court of Appeal UK
D delivered to P a document stating "I hereby agree to sell to P [a property] for £800-00. This offer to be left over to 12 June 9am."
11 June: P was told by a third party that D was negotiating to sell the property to someone else. P then took to D's house a formal written acceptance of the offer. It was given to a member of the family who forgot to give it to D.
12 June: Before 9am, P gave D a duplicate of the letter of acceptance. D said to P, “you are too late, the property has already been sold”.
The Trial Judge held that there was a binding contract of sale between the parties and ordered specific performance. D appealed.
HELD James LJ
Although the document said "I hereby agree to sell ...", it was only an offer. The fact that it was "left over" until 12 June makes this clear. There was no consideration to keep the property unsold until 12 June, despite the fact that one or maybe both of them thought that at least there was some obligation. "It is clearly settled law, on one of the clearest principles of law, that this promise, being a mere nudum pactum (promise without consideration) was not binding."
There is no authority which requires an express retraction. P knew that D no longer wished to sell the property to him. Prior to the purported acceptance of the offer, P knew that D had revoked it. This knowledge made the revocation effective.
[It may be argued that D's conduct appears far from acceptable. If both parties thought that D was bound, and this is what comes through from the report, then why were their intentions not enforced?
2.By rejection
Tinn v Hoffman (1873)
Acceptance was requested by return of post. Honeyman J said: "That does not mean exclusively a reply by letter or return of post, but you may reply by telegram or by verbal message or by any other means not later than a letter written by return of post."
3.By lapse of time
4By death
Offer and invitation to treat
An invitation to treat is to be distinguished from an offer as it merely indicates a willingness to deal but does not display an intention to be bound.
There are several categories of invitation to treat :
•Pre-contractual negotiations
•Shop displays
•Advertisements
Of the above categories the latter two are standard situations and due to the need for certainty the court will generally apply the rule that they are invitations to treat regardless of the intentions of the parties. e.g.
Fisher v Bell ( display in shop window )
Pharmaceutical Society of GB v Boots Cash Chemists ( self-service store )
Partridge v Crittenden ( advert in newspaper )
N.B. sometimes the court will even in the case of displays or adverts find that an offer has been made e.g. Chapeltown v Barry ( deckchairs ), Carlill v Carbolic Smokeball Company (offer to the world which constitutes a unilateral contract )
Pharmaceutical Society of Great Britain v Boots [1952] 2 QB 795
Boots were prosecuted for selling drugs without the presence of a qualified pharmacist. The customer, on entering the store was given a basket and, having selected which articles he/she wanted, would place them in a basket and take them to the cash desk. Near the desk was a registered pharmacist. The Pharmacy and Poisons Act 1933 made it unlawful to sell any listed poison unless the sale was effected under the supervision of a registered pharmacist. The Plaintiffs alleged that the display of goods amounted to an offer which was accepted when the customer put the drugs in to the basket : hence if the drugs in question were poisons then the 'sale' took place before the pharmacist could intervene.
The Queens Bench and the CA rejected this argument. This was because the courts' analysed the situation as follows : the offer to buy came from the customer when the article was put in the basket - this offer the defendants remained free to accept or reject. If they did accept, then this took place at the cash desk in the presence of a registered pharmacist and hence there was no breach of the Act.
Fisher v Bell [1961] 1 QB 394
The defendant shopkeeper was prosecuted for offering flick knives for sale contrary to statute. The defendant was acquitted when the court accepted that the display in the shop window was merely an invitation to treat.
Partridge v Crittenden [1968] 1 WLR 1204
The Protection of Birds Act 1954 made it an offence to "offer for sale a wild live bird". The defendant had placed an advertisement in the journal 'Cage and Aviary Birds' with the words "Bramble finch cocks and hens 25 shillings each". He did not use the words "offer for sale" - He was charged with offering for sale a wild bird, contrary to the 1954 Act.
At first instance he was convicted but on appeal his conviction was quashed. The reason being that there had been no offer for sale as his advertisment was only an invitation to treat.
Carlill v. Carbolic Smoke Ball Co. [1892] 2 QB 484
The defendant Smoke Ball Co. patented a medical preparation called 'The Carbolic Smoke Ball' and advertised the product, declaring that they would pay £100 to anyone who succumbed to influenza after having used their product in the manner specified by the manufacturers. They added that £1,000 had been deposited with their bankers as a sign of their sincerity. The plaintiff, on the strength of the advert, bought a smokeball, caught influenza and thus sued the manufacturers for the £100.
One of the arguments used by counsel for the defendant manufacturers was that there would be no binding agreement because the manufacturers had by their wording, purported to make their offer to the whole world and that, as you cannot contract with everybody, the plaintiff was not capable of accepting this invalid offer.
The Court of Appeal rejected this argument. The defendant's advert did amount to an offer to the whole world but it only matured into a contract when someone performed the condition required in the offer. Consequently, although the offer was made to the whole world, the contact is made with that limited section of the public who come forward and perform the condition requested.
The plaintiff who had performed the condition ( thereby accepting the offer and providing the necessary consideration ) could thus enforce the unilateral contract constituted by the advert and won her case and the £100 claimed.
Note : The defendant company also argued that the promise to pay £100 to any purchaser who bought the smokeball was a mere puff ( i.e. an advertising device devoid of any intention to create legal relations, at most a promise in honour only ) and not therefore legally binding.
The Court of Appeal dismissed this argument pointing to the £1,000 stated to be deposited with the defendant's bankers as proof of the defendant's intention to be legally bound.
What is not clear is what would have been the case had the company not made the statement about the £1,000. It is suggested that to hold every manufacturer legally responsible for the contents of every flamboyant claim made with a view to selling a product is to invite an avalanche of suits and actions against such producers which the courts are less than keen to promote given the current overcrowding of the courts.
Pre-contractual negotiations exist where parties are in discussion with each other but neither has sufficient intention to be bound so as to make their representations to each other capable of being an offer.
A statement forming part of pre-contractual negotiations is a form of invitation to treat.
It is the court which has to determine whether there is an offer capable of being accepted and this will require an investigation of all the circumstances by the court as in Gibson v Manchester City Council. The court thus has a wide discretion over the issue.
N.B. Due to the need for commercial certainty the court will be reluctant to engage in an investigation of the intention of the parties in standard form transactions where there is no real negotiation e.g. displays of goods for purchase and advertisements. The presumption in such cases is to view them as invitations to treat unless there is strong evidence to the contrary : see Carlill v. Carbolic Smoke Ball Co. [1892] 2 QB 484
Gibson v Manchester City Council [1979] 1 WLR 294
In November 1970, Manchester City Council (MCC) (then led by the Conservatives) sent out brochures outlining their scheme to sell council houses. If recipients of the brochures wanted further information they were to return a form attached to the brochure. Mr Gibson did precisely this. Afterwards he received an application form and a letter on February 16th 1971 stating that MCC may be willing to sell him a council house at a price of £2,180. The letter asked Mr Gibson to make a formal application on the form provided - which he did. In May 1971, the council changed hands and Labour came to power and promptly reversed the policy of selling council houses, only completing those deals in which an exchange of contracts had taken place. Mr Gibson was told that as his transaction had not reached the stage of exchanging contracts, the council was no longer prepared to sell him a council house; Mr Gibson tried to argue that they were bound to sell on the grounds that the letter of Feb 16th, 1971 from the Council constituted an offer which he had accepted when he completed the formal application.
The case went to the HOL - where it was held that no binding contract had come into existence. The most that could be said about the council's letter of Feb 16th was that it represented part of the negotiations where the parties were feeling their way towards an agreement. It lacked the unequivocal nature of a true offer.
Invitation to Treat
The general rule is that an invitation to tender for a contract constitutes an invitation to treat and that any tenders made by suppliers in response to such an invitation constitute offers which may be accepted or rejected and not acceptances which would lead to a binding contract in respect of each of the tenders.
Sometimes however the court will analyse the situation as involving not only the invitation to tender but also a separate unilateral contract which the party making the tender accepts by the act of tendering and which therefore forms a binding contract in respect of the subject matter of that unilateral contract : Blackpool & Flyde Aero Club Ltd v Blackpool Borough Council ( unilateral contract that council would consider all tenders submitted on time ).
Occasionally as a matter of policy the courts will construe a tender as in fact being simply an offer: Harvela Investments Ltd v Royal Trust Co of Canada ( referential bid not open for acceptance as "invitation to tender"already accepted by highest cash bid ).
There are several categories of invitation to treat :
•Pre-contractual negotiations
•Shop displays
•Advertisements
Of the above categories the latter two are standard situations and due to the need for certainty the court will generally apply the rule that they are invitations to treat regardless of the intentions of the parties. e.g.
Fisher v Bell ( display in shop window )
Pharmaceutical Society of GB v Boots Cash Chemists ( self-service store )
Partridge v Crittenden ( advert in newspaper )
N.B. sometimes the court will even in the case of displays or adverts find that an offer has been made e.g. Chapeltown v Barry ( deckchairs ), Carlill v Carbolic Smokeball Company (offer to the world which constitutes a unilateral contract )
Pharmaceutical Society of Great Britain v Boots [1952] 2 QB 795
Boots were prosecuted for selling drugs without the presence of a qualified pharmacist. The customer, on entering the store was given a basket and, having selected which articles he/she wanted, would place them in a basket and take them to the cash desk. Near the desk was a registered pharmacist. The Pharmacy and Poisons Act 1933 made it unlawful to sell any listed poison unless the sale was effected under the supervision of a registered pharmacist. The Plaintiffs alleged that the display of goods amounted to an offer which was accepted when the customer put the drugs in to the basket : hence if the drugs in question were poisons then the 'sale' took place before the pharmacist could intervene.
The Queens Bench and the CA rejected this argument. This was because the courts' analysed the situation as follows : the offer to buy came from the customer when the article was put in the basket - this offer the defendants remained free to accept or reject. If they did accept, then this took place at the cash desk in the presence of a registered pharmacist and hence there was no breach of the Act.
Fisher v Bell [1961] 1 QB 394
The defendant shopkeeper was prosecuted for offering flick knives for sale contrary to statute. The defendant was acquitted when the court accepted that the display in the shop window was merely an invitation to treat.
Partridge v Crittenden [1968] 1 WLR 1204
The Protection of Birds Act 1954 made it an offence to "offer for sale a wild live bird". The defendant had placed an advertisement in the journal 'Cage and Aviary Birds' with the words "Bramble finch cocks and hens 25 shillings each". He did not use the words "offer for sale" - He was charged with offering for sale a wild bird, contrary to the 1954 Act.
At first instance he was convicted but on appeal his conviction was quashed. The reason being that there had been no offer for sale as his advertisment was only an invitation to treat.
Carlill v. Carbolic Smoke Ball Co. [1892] 2 QB 484
The defendant Smoke Ball Co. patented a medical preparation called 'The Carbolic Smoke Ball' and advertised the product, declaring that they would pay £100 to anyone who succumbed to influenza after having used their product in the manner specified by the manufacturers. They added that £1,000 had been deposited with their bankers as a sign of their sincerity. The plaintiff, on the strength of the advert, bought a smokeball, caught influenza and thus sued the manufacturers for the £100.
One of the arguments used by counsel for the defendant manufacturers was that there would be no binding agreement because the manufacturers had by their wording, purported to make their offer to the whole world and that, as you cannot contract with everybody, the plaintiff was not capable of accepting this invalid offer.
The Court of Appeal rejected this argument. The defendant's advert did amount to an offer to the whole world but it only matured into a contract when someone performed the condition required in the offer. Consequently, although the offer was made to the whole world, the contact is made with that limited section of the public who come forward and perform the condition requested.
The plaintiff who had performed the condition ( thereby accepting the offer and providing the necessary consideration ) could thus enforce the unilateral contract constituted by the advert and won her case and the £100 claimed.
Note : The defendant company also argued that the promise to pay £100 to any purchaser who bought the smokeball was a mere puff ( i.e. an advertising device devoid of any intention to create legal relations, at most a promise in honour only ) and not therefore legally binding.
The Court of Appeal dismissed this argument pointing to the £1,000 stated to be deposited with the defendant's bankers as proof of the defendant's intention to be legally bound.
What is not clear is what would have been the case had the company not made the statement about the £1,000. It is suggested that to hold every manufacturer legally responsible for the contents of every flamboyant claim made with a view to selling a product is to invite an avalanche of suits and actions against such producers which the courts are less than keen to promote given the current overcrowding of the courts.
Pre-contractual negotiations exist where parties are in discussion with each other but neither has sufficient intention to be bound so as to make their representations to each other capable of being an offer.
A statement forming part of pre-contractual negotiations is a form of invitation to treat.
It is the court which has to determine whether there is an offer capable of being accepted and this will require an investigation of all the circumstances by the court as in Gibson v Manchester City Council. The court thus has a wide discretion over the issue.
N.B. Due to the need for commercial certainty the court will be reluctant to engage in an investigation of the intention of the parties in standard form transactions where there is no real negotiation e.g. displays of goods for purchase and advertisements. The presumption in such cases is to view them as invitations to treat unless there is strong evidence to the contrary : see Carlill v. Carbolic Smoke Ball Co. [1892] 2 QB 484
Gibson v Manchester City Council [1979] 1 WLR 294
In November 1970, Manchester City Council (MCC) (then led by the Conservatives) sent out brochures outlining their scheme to sell council houses. If recipients of the brochures wanted further information they were to return a form attached to the brochure. Mr Gibson did precisely this. Afterwards he received an application form and a letter on February 16th 1971 stating that MCC may be willing to sell him a council house at a price of £2,180. The letter asked Mr Gibson to make a formal application on the form provided - which he did. In May 1971, the council changed hands and Labour came to power and promptly reversed the policy of selling council houses, only completing those deals in which an exchange of contracts had taken place. Mr Gibson was told that as his transaction had not reached the stage of exchanging contracts, the council was no longer prepared to sell him a council house; Mr Gibson tried to argue that they were bound to sell on the grounds that the letter of Feb 16th, 1971 from the Council constituted an offer which he had accepted when he completed the formal application.
The case went to the HOL - where it was held that no binding contract had come into existence. The most that could be said about the council's letter of Feb 16th was that it represented part of the negotiations where the parties were feeling their way towards an agreement. It lacked the unequivocal nature of a true offer.
Invitation to Treat
The general rule is that an invitation to tender for a contract constitutes an invitation to treat and that any tenders made by suppliers in response to such an invitation constitute offers which may be accepted or rejected and not acceptances which would lead to a binding contract in respect of each of the tenders.
Sometimes however the court will analyse the situation as involving not only the invitation to tender but also a separate unilateral contract which the party making the tender accepts by the act of tendering and which therefore forms a binding contract in respect of the subject matter of that unilateral contract : Blackpool & Flyde Aero Club Ltd v Blackpool Borough Council ( unilateral contract that council would consider all tenders submitted on time ).
Occasionally as a matter of policy the courts will construe a tender as in fact being simply an offer: Harvela Investments Ltd v Royal Trust Co of Canada ( referential bid not open for acceptance as "invitation to tender"already accepted by highest cash bid ).
2007年9月6日星期四
Carlill v. Carbolic Smoke Ball Company
Background
The Carbolic Smoke Ball Company made a product called a smoke ball that it claimed could protect the user from contracting influenza. The smoke ball was a rubber ball with a tube attached. It was filled with Carbolic acid (Phenol). The tube was then inserted into the user's nose. It was squeezed at the bottom to release the vapours into the nose of the user. This would cause the nose to run, and hopefully flush out the cold. In fact the inflammation caused by the device would have probably increased susceptibility to catching influenza.
The Company published advertisements claiming that it would pay £100 to anyone who got sick with influenza after using its product according to the instructions set out in the advertisement.
Specifically, they stated:
£100 reward will be paid by the Carbolic Smoke Ball Company to any person who contracts the increasing epidemic influenza, colds or any disease caused by taking cold, after having used the ball three times daily for two weeks according to the printed directions supplied each ball. £1000 is deposited with the Alliance Bank, Regent Street, showing our sincerity in the matter.
Mrs Carlill, relying on the promises made in the advertisement, bought one of the balls and used it in the manner specified, yet still managed to contract influenza.
Ruling
The Carbolic Company claimed that there was no enforceable contract between it and the user of the smoke ball on the grounds that there was no acceptance of its offer, because Mrs Carlill had never notified the Company that she accepted its offer, or consideration, since the Company did not receive any benefit from a purchaser's use of the product once the sale had been completed. The court rejected both arguments, ruling that the advertisement was an offer of a unilateral contract between the Carbolic Smoke Ball Company and anyone who satisfies the conditions set out in the advertisement. Once Mrs Carlill had satisfied the conditions she was entitled to enforcement of the contract; the notification of performance of the conditions formed part of the acceptance. Furthermore, weight was placed on the £1000 bank deposit that claimed to 'show their sincerity in the matter' in showing that the advertisement was not just a puff.
As to consideration, it was held that the act itself was a certain effort required from the promisee and this effort qualified as consideration for the promise to pay her the reward.
Later influence
The case was quoted extensively in the famous "Pepsi Points case", Leonard v. Pepsico, Inc., 88 F.Supp.2d 116 (1996), wherein presiding Judge Kimba Wood wrote:
Long a staple of law school curricula, Carbolic Smoke Ball owes its fame not merely to "the comic and slightly mysterious object involved"... but also to its role in developing the law of unilateral offers.
The Carbolic Smoke Ball Company made a product called a smoke ball that it claimed could protect the user from contracting influenza. The smoke ball was a rubber ball with a tube attached. It was filled with Carbolic acid (Phenol). The tube was then inserted into the user's nose. It was squeezed at the bottom to release the vapours into the nose of the user. This would cause the nose to run, and hopefully flush out the cold. In fact the inflammation caused by the device would have probably increased susceptibility to catching influenza.
The Company published advertisements claiming that it would pay £100 to anyone who got sick with influenza after using its product according to the instructions set out in the advertisement.
Specifically, they stated:
£100 reward will be paid by the Carbolic Smoke Ball Company to any person who contracts the increasing epidemic influenza, colds or any disease caused by taking cold, after having used the ball three times daily for two weeks according to the printed directions supplied each ball. £1000 is deposited with the Alliance Bank, Regent Street, showing our sincerity in the matter.
Mrs Carlill, relying on the promises made in the advertisement, bought one of the balls and used it in the manner specified, yet still managed to contract influenza.
Ruling
The Carbolic Company claimed that there was no enforceable contract between it and the user of the smoke ball on the grounds that there was no acceptance of its offer, because Mrs Carlill had never notified the Company that she accepted its offer, or consideration, since the Company did not receive any benefit from a purchaser's use of the product once the sale had been completed. The court rejected both arguments, ruling that the advertisement was an offer of a unilateral contract between the Carbolic Smoke Ball Company and anyone who satisfies the conditions set out in the advertisement. Once Mrs Carlill had satisfied the conditions she was entitled to enforcement of the contract; the notification of performance of the conditions formed part of the acceptance. Furthermore, weight was placed on the £1000 bank deposit that claimed to 'show their sincerity in the matter' in showing that the advertisement was not just a puff.
As to consideration, it was held that the act itself was a certain effort required from the promisee and this effort qualified as consideration for the promise to pay her the reward.
Later influence
The case was quoted extensively in the famous "Pepsi Points case", Leonard v. Pepsico, Inc., 88 F.Supp.2d 116 (1996), wherein presiding Judge Kimba Wood wrote:
Long a staple of law school curricula, Carbolic Smoke Ball owes its fame not merely to "the comic and slightly mysterious object involved"... but also to its role in developing the law of unilateral offers.
Ben Franklin, 2007
8.5 feet wide by 10.5 feet tall in three horizontal panels
Depicts 125,000 one-hundred dollar bills ($12.5 million), the amount our government spends every hour on the war in Iraq.
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