Explain and Illustrate the Operation of the Doctrine of Judicial Precedent

b) How far is it true to say judges are bound by decisions in earlier cases?

Judicial precedent is where the past decisions of the judges create law for future judges to follow. English precedent is based on the Latin, stare decisis, meaning stand by what has been said in the past. This allows the rules system to be consistent: like cases treated alike, and it is just, as people can decide on a course of conduct knowing what the legal consequences will be.

Judicial Precedent can only operate if the legal reasons for past decisions are known, therefore, at the end of the case there will be a judgement. This will contain the precise words of the judge and follow a Law Report, which consists of full accounts of cases that are considered important. It will give an account of the facts of the case and a summary of the decision. The principles of law that the judge used to make his decision are the important part of the judgement, and are known as ratio decidendi, or ‘the reason for deciding’. This is what creates a precedent for judges to follow in future cases. This is identified not by the judge that makes the decision, but by lawyers looking at it afterwards, they may therefore have different views on it. The remainder of the judgement is called obiter dicta and in future cases, judges do not have to follow it. These are other things the judge said, such as the reasoning and explanation of why he made the decision. It may also contain a hypothetical situation, what his decision would have been if the facts of the case had been different, and the legal reasoning may be considered in future cases. If a new event that hasn’t been decided before comes to the court (original precedent), it is likely that the judge will look at cases which are close in principle and decide to use similar rules. This idea of creating new law by analogy can be seen in Hunter v Canary Wharf (1995). The interference with the reception on Hunter’s television because of Canary Wharf Tower having been built, was likened to the case of Bland v Molselely (1661), in respect to the loss of a view. The two things were said to be a matter of “delight” and not “necessity” so could not come before the courts.

In England and Wales, the courts have a very rigid doctrine of judicial precedent, which has the effect that every court is bound to follow any decision made by a higher court and that appellate courts are bound by their own decisions. Decisions made in the European Court of Justice bind all other courts since 1973 and can overrule its own decisions. Decisions made in the House of Lords bind all lower courts, especially Court of Appeal, and, since 1966 when it issued a practise statement, can overrule past decisions. This is clearly seen in DPP. NI v Lynch when the House of Lords said that duress could be a defence to a charge of murder, and in R v Howe they said it could not. The Court of Appeal has two divisions, which are both bound by the higher courts but not each other. Each single division is bound by its own previous decisions. Both have the Young v Bristol Aeroplane Exceptions however. Divisional Courts are bound by higher courts and bind lower courts. They are generally binding on themselves, but with the Young v Bristol Aeroplane Exceptions. The High Court is bound by higher courts, but not themselves, and all courts bind Inferior Courts.

If one line of authority is clearly binding on the court, then the judges have no choice but to follow it, even if they do not agree with the legal principle. A binding precedent is only created when the facts of the second case are sufficiently similar to the original case and the decision was made by a court senior to the court hearing the later case. Persuasive precedent however is not binding, but the judge may consider it and decide that it is a correct precedent. Persuasive precedent can come from courts lower in the hierarchy, as seen in R v R (1991), where the House of Lords agreed and followed the same reasoning as the Court of Appeal. Decisions of the Judicial Committee of the Privy Council, and statements made obiter dicta. Where a case has been decided by a majority of judges, there may be some that don’t agree on what the law is, this is known as a dissenting judgement. In Candler v Crane, Christmas and Co., Lord Denning gave a dissenting judgement on the case, but the other judges didn’t agree with him. In 1964 however, The House of Lords decided he had been right, in the case of Hedley Byrne v Heller and Partners. The dissenting judgement persuaded them to follow it. Decisions from foreign courts may also have persuasive precedents.

There are also other methods used by judges to prevent them from following precedents: Distinguishing is when a judge finds the material facts of the case he is deciding are sufficiently different for him to draw a distinction between the present case and previous precedent. Two cases demonstrating this process are Balfour v Balfour (1919) and Merritt v Merritt (1971). The first case was successful but the second was not, as although both involved a wife making a claim against her husband for breach of contract, there was enough different facts to distinguish them. Overruling is where a court in a later case states that the legal rule decided in an earlier case is wrong. It is used to prevent an injustice if the judges feel the first decision was wrong. This is illustrated in Pepper v Hart (1993) when the House of Lords ruled that Hansard could be consulted in statutory interpretation. This overrules the earlier decision in Davis v Johnson (1979). The last method is Reversing, and is when a higher court overturns the decision in a lower Court of Appeal, in the same case. This is again illustrated in Davis v Johnson (1979).

Because of distinguishing, overruling, reversing and persuasive precedents, it is true to say that although judges are bound rigidly to follow decisions made in earlier cases, they do have ways of avoiding it if certain facts comply.

Defination

Offer to receive an offer. Under UK law, the price tag on an item displayed in a shop window (or advertised over publicmedia) is an invitation-to-treat and not an offer of sale (theacceptance of which constitutes a contract).

Invitations to treat

An invitation to treat is not an offer, but an indication of a person’s willingness to negotiate a contract. In Harvey v. Facey[4], an indication by the owner of property that he or she might be interested in selling at a certain price, for example, has been regarded as an invitation to treat. Similarly in Gibson v Manchester City Council[5] the words “may be prepared to sell” were held to be a notification of price and therefore not a distinct offer, though in another case concerning the same change of policy (Manchester City Council underwent a change of political control and stopped the sale of council houses to their tenants) Storer v. Manchester City Council[6], the court held that an agreement was completed by the tenant’s signing and returning the agreement to purchase, as the language of the agreement had been sufficiently explicit and the signature on behalf of the council a mere formality to be completed.

The courts have tended to take a consistent approach to the identification of invitations to treat, as compared with offer and acceptance, in common transactions. The display of goods for sale, whether in a shop window or on the shelves of a self-service store, is ordinarily treated as an invitation to treat and not an offer.[7]

The holding of a public auction will also usually be regarded as an invitation to treat. Auctions are, however, a special case generally. The rule is that the bidder is making an offer to buy and the auctioneer accepts this in whatever manner is customary, usually the fall of the hammer.[8] A bidder may withdraw his or her bid at any time before the fall of the hammer, but any bid in any event lapses as an offer on the making of a higher bid, so that if a higher bid is made, then withdrawn before the fall of the hammer, the auctioneer cannot then purport to accept the previous highest bid. If an auction is without reserve then whilst there is no contract of sale between the owner of the goods and the highest bidder (because the placing of goods in the auction is an invitation to treat) there is a collateral contract between the auctioneer and the highest bidder that the auction will be held without reserve (i.e., that the highest bid, however low, will be accepted).[9] The U.S. Uniform Commercial Code provides that in an auction without reserve the goods may not be withdrawn once they have been put up.[10]

Invitation to treat vs. offer in contract law

An invitation to treat is a mere declaration of willingness to enter into negotiations; it’s not an offer1, and can’t be accepted so regarding form a binding contract2.

In practice, the formation of a contract is frequently preceded by preliminary negotiations. Some of the exchanges in these negotiations contain no declaration at all, as where one party simply asks for information3. Others may amount to invitations to the recipient to make an offer4, these being invitations to treat.

Therefore, a distinction must be drawn between those declarations which amount to offers, and those which only amount to invitations to treat. Sometimes, a particular type of declaration is, at least Prima facie, put into one or the other category by statute5 or by common law6; but in all other cases it’s a question of intention. An express statement that a declaration isn’t an offer is effective to prevent it being an offer7, but the mere use of the terminology ‘invitation to treat’ or ‘offer’ in the declaration may not be conclusive one way or the other8. Otherwise, the vital question is the intention of the declarant9, though his actual intention may give way to a contradictory apparent intention10.

Whether the actual intention of the declarant does give way to his apparent intention can’t usually depend on his subsequent conduct11, but may be affected by the state of mind of the declarant12.

1 regarding the meaning of ‘offer’ see ‘Meaning of ‘offer”.

2 Gibson v Manchester City Council [1979] 1 All ER 972, [1979] 1 WLR 294, HL. Regarding the meaning of ‘acceptance’ see ‘Meaning of ‘acceptance”.

3 See, for example, Harvey v Facey [1893] AC 552, PC (‘Will you sell us…telegraph lowest cash price…’; and see sections 637, 650, 667).

4 See, for example, Spencer v Harding (1870) LR 5 CP 561 (advertisement requesting tenders; and see ‘Tenders’); Kahn v Evans [1985] RTR 33, DC (taxi plying for hire); Interfoto Picture Library Ltd v Stiletto Visual Programmes Ltd [1989] QB 433, [1988] 1 All ER 348, CA (telephone request for supply of goods; subsequent supply an offer by conduct: see ‘Meaning of ‘offer” ).

5 Eg sales by auction: see the Sale of Goods Act 1979 s 57(2), codifying Payne v Cave (1789) 3 Term Rep 148; and see ‘Auctions’.

6 See, for example, Pharmaceutical Society of Great Britain v Boots Cash Chemists (Southern) Ltd [1953] 1 QB 401, [1953] 1 All ER 482, CA (priced goods on shelf in self-service store; and see ‘Offer and invitation to treat: examples’); Harvela Investments Ltd v Royal Trust Co of Canada (CI) Ltd [1986] AC 207, [1985] 2 All ER 966, HL (common intention to perform an existing invalid contract not an offer; and regarding referential bids see ‘Tenders’).

7 See, for example, Financings Ltd v Stimson [1962] 3 All ER 386, [1962] 1 WLR 1184, CA (‘this agreement shall become binding on the owner only upon acceptance by signature’; held: no offer by owner). But see Appleby v Errington [1952] CLY 1352 (in negotiating for a settlement of an action counsel said he wasn’t binding himself; claim withdrawn; held: compromise binding). Regarding intention to create legal relations see ‘Intention to Create Legal Relations – The Requirement’.

8 See, for example, Spencer v Harding (1870) LR 5 CP 561 (‘We are instructed to offer…for sale by tender…’: see also’Tenders’); Clifton v Palumbo [1944] 2 All ER 497, CA (‘I…am prepared to offer you…my…estate for £600,000…’: see also Sale of an interest in land). Similarly, Bigg v Boyd Gibbins Ltd [1971] 2 All ER 183, [1971] 1 WLR 913, CA (communication termed an ‘acceptance’; held: an offer); Harvela Investments Ltd v Royal Trust Co of Canada (CI) Ltd [1986] AC 207, [1985] 2 All ER 966, HL (communication requesting another to make an ‘offer’ itself; held to be an offer).

9 Harvela Investments Ltd v Royal Trust Co of Canada (CI) Ltd [1986] AC 207, [1985] 2 All ER 966, HL (invitation to fixed bidding). For instance, in the following cases it was held that no offer was intended: Moorhouse v Colvin (1851) 15 Beav 341 (father stated that he would give daughter property on her marriage); Re Fickus, Farina v Fickus [1900] 1 Ch 331 (similar case); Licenses Insurance Corpn and Guarantee Fund Ltd v Lawson (1896) 12 TLR 501 (statement at board meeting that he would make good any loss arising on investment); Montreal Gas Co v Vasey [1900] AC 595, PC (‘we would favourably consider an application from you…for a renewal of the [contract]’); Loftus v Roberts (1902) 18 TLR 532, CA (‘I agree to engage you…at a West End salary’); British Homophone Ltd v Kunz and Crystallate Gramophone Record Manufacturing Co Ltd (1935) 152 LT 589 (an option granted ‘on terms to be hereinafter agreed’); Clifton v Palumbo [1944] 2 All ER 497, CA (see note 8 above); Rapalli v KL Take Ltd [1958] 2 Lloyd’s Rep 469, CA (see ‘Offer and invitation to treat: examples’ note 9). See also Peter Lind & Co Ltd v Mersey Docks and Harbour Board [1972] 2 Lloyd’s Rep 234 (letter merely part of negotiations regarding price).

10 For instance, the cases where a person at an auction bids under a mistake: Robinson, Fisher and Harding v Behar [1927] 1 KB 513, DC (bid for wrong lot); Tamplin v James (1880) 15 ChD 215, CA (mistaken impression that lot included two extra plots at back of inn). Regarding auctions see ‘Auctions’; and regarding mistake see ‘Types of Mistake’. See also Moran v University College Salford (No 2) [1994] ELR 187, CA (a clerical error which offered a University place).

11 Rapalli v KL Take Ltd [1958] 2 Lloyd’s Rep 469 at 484, CA, per Romer LJ (the subsequent conduct of a party can’t convert an invitation to treat into an offer, but might itself amount to a new (possibly implied) offer). Regarding offers possibly having retrospective effect see ‘In general’.

Invitation to treat refers to an invitation to make an offer. It is an offer to make an offer and is derived from the Latin phrase invitatio ad offerendum. An invitation to treat is an initial step toward entering into a possible agreement with another party, such as a letter asking for more information or an advertisement.

In contract law, an invitation to treat is an action by one party which may appear to be a contractual offer but which is actually inviting others to make an offer of their own. The distinction is important because if a legitimate contractual offer is accepted by another, a binding contract is immediately formed and the terms of the original offer cannot be further negotiated without both parties consent. An invitation to treat may be seen as a request for expressions of interest.

The clearest example of an invitation to treat is a tender process. The party tendering out services is not obliged to sign a contract with the first party who submits a tender proposal. An auction may be more ambiguous. Generally an auction may be seen be an invitation to treat, with the property owner asking for offers of a certain amount and then selecting which to accept. However, if it is stated by the owner that there is no reserve price or that there is a reserve price beyond which offers will be accepted then the auction is most likely a contractual offer which is accepted by the highest bidder (Spencer v Harding (1870) LR 5 CP 561) .

A shop owner displaying their goods for sale is generally making an invitation to treat. They are not obliged to sell the good to anyone who is willing to pay for them, even if additional signage such as “special offer” accompanies the display of the good. This distinction was legally relevant in Fisher v Bell [196l] 1 QB 394 where it was held that displaying a flicknife for sale in a shop did not contravene legislation which prohibited offering for sale such a weapon. The distinction also means that if a shop mistakenly displays a good for sale at a very low price it is not obliged to sell it for that amount [1].

Invitation to Treat

In contract law, an invitation to treat (invitation to bargain in the US) is an action by one party which may appear to be a contractual offer but which is actually inviting others to make an offer of their own. The distinction is important because if a legitimate contractual offer is accepted by another, a binding contract is immediately formed and the terms of the original offer cannot be further negotiated without both parties’ consent. An invitation to treat may be seen as a request for expressions of interest.

The clearest example of an invitation to treat is a tender process. The party tendering out services is not obliged to sign a contract with the first party who submits a tender proposal. An auction may be more ambiguous. Generally an auction may be seen be an invitation to treat, with the property owner asking for offers of a certain amount and then selecting which to accept. However, if it is stated by the owner that there is no reserve price or that there is a reserve price beyond which offers will be accepted then the auction is most likely a contractual offer which is accepted by the highest bidder (Spencer v Harding (1870) LR 5 CP 561) .

A shop owner displaying their goods for sale is generally making an invitation to treat. They are not obliged to sell the good to anyone who is willing to pay for them, even if additional signage such as “special offer” accompanies the display of the good. This distinction was legally relevant in Fisher v Bell 1961 1 QB 394 where it was held that displaying a flicknife for sale in a shop did not contravene legislation which prohibited offering for sale such a weapon. The distinction also means that if a shop mistakenly displays a good for sale at a very low price it is not obliged to sell it for that amount.