Case Analysis of Pharmaceutical Society of Great Britain v Boots Cash Chemists (Southern) LD., 1953

Pharmaceutical Society v Boots[1]

Introduction

The case of Pharmaceutical Society v Boots is a UK contract law case, concerning the difference between invitation to offer and offer. The case also dealt with the time of formation of contract.

In this case, Boots operated a self-service store where customers would select items from the shelves and then take them to the cashier to pay. The Pharmaceutical Society argued that displaying medicines on shelves for customers to pick up themselves constituted an offer to sell, which violated the Pharmacy and Poisons Act 1933, as the poisons had to supervised by a registered Pharmacist and thus when the contract was formed, whether at the cash desk or when customer picked it up.

Held, a sale was not completed until the customer's offer to buy had been accepted by the defendants by their acceptance of the purchase price, which acceptance took place under the supervision of a registered pharmacist as required by the Pharmacy and Poisons Act 1933 s.18(1)(a)(iii).

Disposition: In Favour of Defendant

Background

In the landmark judgment of Harvey v Facey[2], the plaintiff initiated communication with the defendant via telegram, inquiring, "Will you sell Bumper Hall Pen? Telegraph lowest cash price." In response, the defendant replied, "Lowest price £900." Subsequently, the plaintiffs telegraphed their agreement, stating, "We agree to buy… for £900 asked by you." The plaintiff later sued the defendant because of no response and unwillingness to sell after contract was formed. Upon review, the Privy Council determined that the defendant's telegram constituted not an offer, but rather an indication of the minimum price the defendants would consider, should they choose to sell. Furthermore, it was noted that the plaintiffs' first question regarding the sale was left unanswered, with only the pricing question answered. Consequently, the plaintiffs' second telegram could not be construed as an acceptance, given the absence of a clear offer from the defendant's side. Their Lordships are of opinion that the mere statement of the lowest price at which the vendor would sell contains no implied contract to sell at that price to the persons making the inquiry. It was held that a statement of price is not an offer

In Payne v Cave[3], the defendant made the highest bid for the plaintiff’s goods at an auction sale, but he withdrew his bid before the fall of the auctioneer’s 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. It stands for the proposition that an auctioneer's request for bids is not an offer but an invitation to offer. The bidders make the offers which can be accepted by the auctioneer. This was later incorporated in Sale of Goods Act[4].

Moreover, in this present appeal case, the Court has affirmed the decision of Lord Chief Justice and agreed with the reasoning of Lord Chief Justice[5] as provided prior to present appeal.

These precedents have helped shape various legislations in common law regarding Offer and Acceptance. Moreover, the court has followed the same in the Pharmaceutical Society v Boots.

Analysis

Facts

The defendant operated a self-service shop where non-prescription drugs and medicines, many of which were listed in the Poisons list under the Pharmacy and Poisons Act 1933, were sold. The defendants had adopted a self-service system in their shop which consisted in allowing persons. Their shop employed a self-service system where customers could pick up products displayed on shelves in packages or containers marked with prices. Upon entering the shop, customers were provided with wire baskets to select items they wished to purchase, then proceeded to the cashier's desk where the price was calculated and payment received. In this stage of transaction, when the sale of a drug was supervised by the pharmacist, who was authorized to prevent removal of any drugs from the premises. In one of their departments of their shop, certain shelves contained drugs falling under part one of the poisons list. Before a customer could leave with their purchase from this department, it was required that their selection undergo scrutiny and supervision by a qualified pharmacist.

The plaintiff initiated proceedings against the defendant for violating section 18(1)(iii) of the Pharmacy and Poisons Act, which stipulates that “the sale of any poison included in part I of the poisons list shall not be lawful unless the sale is effected by, or under the supervision of, a registered pharmacist.”

Issues

Whether the contract of sale was concluded when the customer selected the product from the shelves or when the items were paid for.

Law

The Pharmacy and Poisons Act, 1933 (c. 25), §18(1)(iii), (UK)

Offer: An offer is the final expression of willingness by the offeror to be bound by the offer should the other party choose to accept it.

Invitation to Offer: Offers made with the intention to negotiate or offer to receive offers are known as invitation to offer

Section 2(a) of the Indian Contract Act – It defines Offer as

      When one person signifies to another his willingness to do or to abstain from doing anything, with a view to obtaining the assent of that other to such act or abstinence, he is said to make a proposal.

Analysis and Judgment

Somervelle L.J.

1. The plaintiffs are the Pharmaceutical Society, incorporated by Royal Charter. One of their duties is to take all reasonable steps to enforce the provisions of the Act. It is not disputed that in a chemist shop where this self-service system does not prevail, a customer may go in and ask a young woman assistant who will not herself be a registered pharmacist for one of these articles on the list and the transaction may be completed, and the article paid for. Although the registered pharmacist who will no doubt be on the premises, will not know anything himself of the transaction unless the assistant, requires to put a question to him.
2. It is emphasized that these are not dangerous drugs, they are substances which contain very small proportions of poison, and it can be imagined that those also contain warning as to what doses are to be taken.
3. The point taken by the plaintiffs is this - It is said that the purchase is complete if and when a customer going around themselves take an article and puts it in the receptacle. The registered pharmacist, if so minded, has no power to say this drug ought not to be sold to the customer.
4. Every contract is to be regarded as being completed when the article is put into the receptacle. or is it to be regarded as more organized way of doing things like a bookseller. In which customers are free to roam around and take a look at every book and then pick one they wish to buy.
5. It is contended that the transaction is not complete until the shopkeeper or someone on his behalf accepts that offer, only then the contract is complete.
6. Self-service is a convenient method of enabling customers to see what there is and choose and possibly put back and substitute articles which they wish to have and then go to cashier and place their offer to buy.
7. On that conclusion, the case fails. And the appeals should be dismissed.

Birkett L.J.

1. The Opinion of Somerville, LJ. can be agreed. Pharmaceutical society in pursuance of their duty has brought up this case. The main question is at what point of time did the sale in this shop take place. It is said that the sale does not take place until the customer who has placed that package in the basket comes to the exit.
2. It seems that the transaction is in no way different from the normal transaction in a shop where there is no self-service.
3. Therefore, in this opinion. The mere fact that a customer picks up a bottle of medicine from the shelves, does not amount to an acceptance of an offer to sale. It is an offer by the customer to buy and there is no sale effected until the buyers offer to buy, is accepted by the acceptance of the price. And during the whole transaction takes place under the supervision of a registered pharmacist as provided by the act.
4. It can be agreed that this appeal ought to be dismissed.

Romer L.J.

1. The opinion of Somervell LJ and Birkett LJ is agreed.
2. If a person picked up an article. Once having picked it up, he would never be able to put it back and say that he had changed his mind. The shopkeeper would say no, the property has passed and you will have to pay. If that were the situation or position in this and similar shops. Then it can be imagined that the popularity of these shops would have waned a good deal.
3. It is agreed that the appeal fails.

Conclusion

In the landmark case of Pharmaceutical Society v Boots, the differentiation between an offer and an invitation to offer was significantly clarified, marking a pivotal judgment in UK contract law. Building upon precedents such as ‘Payne v Cave’ and ‘Harvey v Facey’ (A statement of price is not an offer), the court emphasized that an invitation to offer allows for negotiation, while an offer does not. The case underscored the distinction between displayed goods in a shop, which are considered invitations to offer, and completed transactions.

Specifically, once a customer selects an item from the shelves in a self-service setting, the cashier retains the right to decline the transaction, highlighting that this action merely constitutes an invitation to offer and not a finalized transaction. This distinction is crucial in determining the formation of contracts in retail transactions. The ruling established that a customer's offer occurs when they present selected items at the cash register, and acceptance happens when the cashier agrees to sell those items. This interpretation was further supported by the customer's ability to return items to the shelves before completing the payment.

Overall, the Pharmaceutical Society v Boots case provided clarity on the legal status of transactions in self-service stores and affirmed the importance of time of formation of contract. The Court has followed the precedents to establish the judgment in this case. By adhering to precedents, the differentiation to invitation to offer is more distinguished and leaves less of gap to use as an established principles in contract law. Also, the offer to buy by buyer and its acceptance by seller constitutes a transaction and thus a contract is formed.

[1] Pharmaceutical Society of Great Britain v Boots Cash Chemists (Southern) LD., [1953] 1 Q.B. 401

[2] Harvey v Facey, [1893] A.C. 552

[3] Payne v Cave, (1789) 3 TR 14

[4] Sale of Goods Act, 1979, § 57, UK Public General Acts, 1979 c.54

[5] [1952] 2 Q.B. 795, 802