English Business Law

Topics: Contract, Contractual term, Invitation to treat Pages: 12 (3252 words) Published: March 20, 2013
The Games Café: Legal Advisory

The Games café is an internet café with an innovative edge, diversifying into the market for computer games and consoles unlike any other known competitors. The business is currently experiencing legal issues and is in need of updating its policies and practices; the café has recently joined the small business federation and have been assigned with legal advisory for best practices on contractual and consumer matters.

The Games Cafe needs to improve on how it regulates business operations by adapting suitable policies and practices in order to legally protect the business and help it to operate more effectively. Following are the policies and written reports that have been proposed to them.

Proposed Policy & Practices& Advisory Reports

An Invitation to Treat: (Not binding) SEE ALSO: (FIGURE: A)

Proposed application of Invitation to treat:
Advertisement (Figure A) has been devised to be on display in the shop window. The Advertisement itself is an invitation to treat, as well as promoting further invitations to treat with the content that is within the advert.

Price tags: “Tea: £1.40, Coffee: £1.35” Invitation to treat not an offer. E.g. if price was printed wrong, “Tea: £14.00” The customer would not have to pay that amount. (Figure A)

“We offer Cash amounts of up to £35 paid for your used games” Statement of invitation to treat, invites customer /external party to potentially make an offer (Figure A).

An Invitation to Treat: Report, Appropriate cases & legislation:

“This is where a person holds himself out as ready to receive offers, which he may then either accept or reject”

Dennis J.Keenan, Sarah Riches (2005, p.244)

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

Business Dictionary: (http://www.businessdictionary.com/definition/invitation-to-treat.html)

Invitation to treat refers to the preliminary communication that attracts customers to the business before the formation of any contract between the business and the customer.An invitation to treat is an enticement for the customer to make an offer; an invitation to treat is pre-contractual and therefore is not legally binding.

Fisher v Bell (1961);
The defendant, a shopkeeper, was prosecuted for displaying an illegal flick-knife for sale under the Restriction of offensive weapons act (1951) however was cleared from court due to the nature of the case. The displayed flick knife in the shop window was deemed as an invitation to treat and not a binding offer so as a result, the defendant was acquitted with no charges.

Price tags associated with the business are also an invitation to treat, there are no legally binding implications of a price tag and customers are legally entitled to barter, just as the business does not have to sell it for the price on the tag.

Argos was involved in a case regarding price tag and invitation to treat in regards to a TV set which was incorrectly priced at £3. In court, the price of £3 was deemed as being an invitation to treat and that a genuine mistake in pricing has misled customers. Argos had already had orders for the TV to process worth in excess of £1m, fortunately for Argos, as price tag is an invitation to treat, and no contract existed between the business and its customers, they did not have to sell the TV sets at the marked price. However if the orders had been processed, and an offer had been made and accepted then a contract would had been valid and the goods would have to be sold at the advertised price under the sale of goods Act. Argos were not legally bound as the price tag was an invitation to treat and no offer had been accepted.

"We are not legally bound and will not be fulfilling the orders. Money needs to have changed hands for the deal to...
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