Harvey v. Facey

Facts

• Harvey (plaintiff) was interested in purchasing a property called "Bumper Hall Pen" in Jamaica from Facey (defendant)
• Harvey sent a telegram: "Will you sell us Bumper Hall Pen? Telegraph lowest cash price."
• Facey replied by telegram: "Lowest price for Bumper Hall Pen £900."
• Harvey immediately telegraphed: "We agree to buy Bumper Hall Pen for £900 asked by you."
• Facey did not respond further and refused to sell
• Harvey sued for specific performance, claiming a binding contract existed

Issue

1. Whether a statement of the lowest acceptable price, in response to an inquiry, constitutes an offer to sell which is capable of acceptance?

Held

• The Privy Council held that no contract existed
• Facey's telegram did not answer the first question ("Will you sell?"); it only answered the second ("What is the lowest price?")
• Stating a price is not the same as offering to sell at that price
• Facey's reply was merely supplying information in response to a query, not making an offer
• Harvey's "acceptance" was in reality a fresh offer, which Facey never accepted

Ratio Decidendi

A statement of price, or an indication of the lowest price at which a party would be willing to sell, does not by itself constitute an offer to sell. It is merely a response to a request for information. For an offer to exist, there must be a willingness to be bound upon acceptance. A party who merely quotes a price reserves the right not to sell and has made no commitment that can be converted into a contract by the other party's purported acceptance.