Is an invitation to treat an offer? Discuss?

Topics: Contract, Invitation to treat, Carlill v Carbolic Smoke Ball Company Pages: 2 (640 words) Published: June 10, 2014
Is an invitation to treat an offer? Discuss?

Answer:
Section 2(a), Contracts Act 1950 provides that ‘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 the act or abstinence, he is said to make a proposal’.

Case: M N Guha Majumder v R E Donough [1974] 2 MLJ 114
Facts: Property owned by the defendant was advertised
for sale, and written offers to purchase were invited. The plaintiff viewed the property on two occasions. During the interval between the two occasions the plaintiff was in communication with the defendant’s agent, and it was alleged that the defendant had accepted the plaintiff’s offer to purchase the property for RM70,000. There had been on the occasion of the second visit to the property some discussion on the mode of payment. There was also no clear agreement on the sale of orchid plants which the defendant wished to sell separately, although the matter was discussed between the parties. The defendant denied that he had decided to go on with the sale. The defendant was anxious, however, to effect a quick sale as he was desirous of leaving Kuching permanently for Johor bharu.

Issue: Whether there was a contract inexistence between the plaintiff and the defendant at the material time.

Held: 1. The law does not impute an intention to enter
into such a legal relationship as that of vendor and purchaser where the circumstances and the conduct of the parties negative any intention of the kind. 2. The evidence indicated that the parties did not intend to be immediately bound. They had not the necessary animus contrahendi (means intention to contract). What passed was only a negotiation from beginning to end.

Whether an advertisement is an offer or an invitation to treat depends on the intention of the parties in each case. The courts have held that advertisements of bilateral contracts are not offers whereas advertisements of...
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