HARVEY V. FACEY

HARVEY V. FACEY

(1893) AC 552

FACTS

Harvey, the plaintiff, was interested in purchasing a property called "Bumper Hall Pen" in Jamaica, which was owned by Facey, the defendant. Harvey sent Facey a telegram that read:

1. "Will you sell us Bumper Hall Pen? Telegraph lowest cash price."
2. Facey replied: "Lowest price for Bumper Hall Pen £900."
3. Harvey responded: "We agree to buy Bumper Hall Pen for £900 asked by you. Please send us your title deeds."

• Facey, however, refused to sell the property to Harvey. Harvey then sued Facey, arguing that a contract had been formed based on the exchange of telegrams.

ISSUES

The primary issue was whether Facey’s telegram constituted a valid offer that Harvey could accept, thereby forming a binding contract.

CONTENTIONS

Plaintiff (Harvey)

• Argued that Facey’s statement of the lowest price was an offer to sell the property at that price. By accepting it, Harvey contended that a contract was formed.

Defendant (Facey)

• Argued that his telegram merely stated the lowest price he would consider, without any intention to make a binding offer. He contended that this was merely a response to an inquiry, not an offer.

ANALYSIS

• The court had to determine whether Facey’s telegram was an offer or merely an invitation to treat. 
• The distinction is critical in contract law because an offer, if accepted, forms a binding contract, whereas an invitation to treat is merely an invitation for others to make offers.

JUDGMENT

• Lordships pointed out that in their first telegram, the plaintiff had asked two questions, first, as to the willingness to sell and, second, as to the lowest price. The defendants answered only the second and gave only the lowest price. They reserved their answer as to the willingness to sell.
• It held that Facey’s telegram was not an offer but merely a statement of the lowest price he would accept if he were to sell. 
• The court found that Facey had not expressed any intention to sell the property, and thus there was no offer for Harvey to accept. 
• Consequently, no contract was formed.

COMMENTARY

Harvey v. Facey is a significant case that illustrates the importance of clear communication in the formation of contracts. 

• The case established that a mere statement of price, without an accompanying intention to sell, does not constitute an offer. 
• This distinction between an offer and an invitation to treat is fundamental in contract law, as it prevents parties from being bound by statements that were never intended to create legal obligations. 

• The ruling also establishes the necessity of mutual agreement and clear terms for a contract to be valid.