Payne v Cave
Encyclopedia
Payne v Cave 3 TR 148 is an old English contract law
case, which stands for the proposition that an auctioneer's request for bids is not an offer (an invitation to treat
instead) which can be accepted by the highest bidder.
It was held that the defendant was not bound to purchase the goods. His bid amounted to an offer which he was entitled to withdraw at any time before the auctioneer signified acceptance by knocking down the hammer. Note: The common law
rule laid down in this case has now been codified in s57(2) Sale of Goods Act 1979.
qualified Payne by ruling that if the auction is advertised as being "without a reserve price", then the auctioneer is bound to sell to the highest bona fide bidder (and not the seller himself, as attempted in Warlow v Harrison). Also, the Sale of Goods Act 1979
, s 57 states that if an auction is held without any reserve, then the auctioneer must accept the highest bid (this was subsequently applied in Barry v Davies).
In opening a contract class at Harvard in the autumn of 1870, Professor Christopher Columbus Langdell
, instead of the traditional didactic approach of lecturing a hall of students, pointed to a student and asked, “Mr Fox, will you state the facts of Payne v Cave?”, then, “Mr Rawle will you give the plaintiff’s argument?” He replied to answers, in Socratic style, with “could you suggest a reason?”. This became known as the case method of legal study, that is followed around most of the common law world today.
English contract law
English contract law is a body of law regulating contracts in England and Wales. With its roots in the lex mercatoria and the activism of the judiciary during the industrial revolution, it shares a heritage with countries across the Commonwealth , and the United States...
case, which stands for the proposition that an auctioneer's request for bids is not an offer (an invitation to treat
Invitation to treat
Invitation to treat is a contract law term. It comes from the Latin phrase invitatio ad offerendum and means "inviting an offer". Or as Andrew Burrows writes, an invitation to treat is...
instead) which can be accepted by the highest bidder.
Facts
Mr Cave made the highest bid for Mr Payne's goods at an auction. But then, Mr Cave changed his mind and he withdrew his bid before the auctioneer brought down his hammer.It was held that the defendant was not bound to purchase the goods. His bid amounted to an offer which he was entitled to withdraw at any time before the auctioneer signified acceptance by knocking down the hammer. Note: The common law
rule laid down in this case has now been codified in s57(2) Sale of Goods Act 1979.
Judgment
The court held that Mr Cave was entitled to withdraw his offer at any time before the auctioneer accepted it. The auctioneer's request for bids was an invitation to treat, and each bid constituted an offer which could be withdrawn at any time until it's accepted, and finally, the fall of the auctioneer's hammer constituted acceptance of the highest bid.Significance
Barry v DaviesBarry v Davies
Barry v Davies [2000] , [2000] 1 WLR 1962 is an English contract law case concerning an auction.-Facts:The auctioneer withdrew goods from an auction when a bona fide bid of £200 was effective...
qualified Payne by ruling that if the auction is advertised as being "without a reserve price", then the auctioneer is bound to sell to the highest bona fide bidder (and not the seller himself, as attempted in Warlow v Harrison). Also, the Sale of Goods Act 1979
Sale of Goods Act 1979
The Sale of Goods Act 1979 is an Act of the Parliament of the United Kingdom which regulates English contract law and UK commercial law in respect of goods that are sold and bought. The Act consolidates the original Sale of Goods Act 1893 and subsequent legislation, which in turn had codified and...
, s 57 states that if an auction is held without any reserve, then the auctioneer must accept the highest bid (this was subsequently applied in Barry v Davies).
In opening a contract class at Harvard in the autumn of 1870, Professor Christopher Columbus Langdell
Christopher Columbus Langdell
Christopher Columbus Langdell , American jurist, was born in the town of New Boston, New Hampshire, of English and Scots-Irish ancestry....
, instead of the traditional didactic approach of lecturing a hall of students, pointed to a student and asked, “Mr Fox, will you state the facts of Payne v Cave?”, then, “Mr Rawle will you give the plaintiff’s argument?” He replied to answers, in Socratic style, with “could you suggest a reason?”. This became known as the case method of legal study, that is followed around most of the common law world today.