Facts[]
Blair was a secretary, and retired after many years working for Western. Towards the end of her employment, she was dictated oral minutes of a meeting of the board of directors that she copied down into print. In these minutes was a discussion that if she were to retire, she would be given approximately two years' pay as a bonus for her long service. She does retire, but does not get this money. She sues the company for the lost wages claiming that a contract was formed. She was unsuccessful at trial, which she appealed.
Issue[]
- Was this an offer that was capable of acceptance?
Decision[]
Appeal dismissed.
Reasons[]
Bull JA restates the trial judge's holding, that this is not a contract for the following reasons:
- No promise was made and accepted for consideration;
- No change in the existing relationship took place; and
- There was no evidence of an intention to change the relationship to create new legal obligations.
However, he goes on to say that the appeal at hand must be decided on the basis of the appellant's submissions:
- That the resolution of the board of directors was a unilateral contract accepted by Miss Blair upon her act of retiring;
- Even if a binding contract was not formed (due to lack of consideration, etc.), Miss Blair was entitled to retirement pay in equity because the respondent made a promise, that Miss Blair would get the benefit of retirement pay, and expected her to act upon it.
Upon these submissions, Bull JA says that a "bare resolution" that is delivered, such as here, cannot be considered to indicate an intention to create a legal obligation capable of acceptance. It is not unequivocal. This could be refuted if Blair could show something to indicate the intent of Western to be bound, but nothing could be shown to this effect.
McFarlane JA says that another problem is there is not sufficient connection between the passing of the resolution and Blair's reasons for retirement to imply that she accepted the offer through her performance (i.e. retiring) – which is what she claimed in her submission (i.e. that the resolution was a unilateral contract).
Robertson JA simply says that this publishing cannot be considered to be an offer, as a reasonable person would not think that the employer intended to be bound.
Quantum meruit (equitable principle) is also denied as the woman did not rely on the terms of the "contract" in any of her actions, and therefore suffered no losses.
Ratio[]
- A party must intend to make an offer for it to be an offer capable of acceptance, and it must be communicated to the party to whom it is directed in order to prove that the offeror intended to be legally bound.
- It makes no difference if the offeree knows about the offer by another means – it must be deliberately communicated to them by the offeror.