Offer & Invitation to Treat
Distinguish between offer & invitation to treat. An offer is a definite promise to be bound provided that certain terms are to be accepted. The Contracts Act 1950 uses the term ‘proposal’ but it has the same meaning as an ‘offer. Section 2(a) defines a proposal as ‘when a 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. An invitation to treat is a statement which is intended to be binding at law. It merely invites parties to make an offer. Invitation to treat often appears in the advertisement, display of goods, tenders, auctions and application for club membership.
Advertisements
Whether an invitation to treat is an offer or invitation to treat depends on the intention of the party placing the advertisement. In most cases, advertisements are treated as an invitation to treat unless on exceptional fact situations as in Carlill v Carbolic Smoke Ball Co (1892). In this case, the defendants issued an advertisement offering to pay £100 to any person who contracted influenza after using the smoke ball in a specified manner. Such a contract, when made, is called a unilateral contract. The outstanding obligation is on one side only. The plaintiff bought and used the smoke ball in the manner prescribed and caught influenza. The plaintiff sued the defendants for £100. Thus, the only outstanding obligation was on the defendants to perform their promise to pay the £100. In this case, there was an acceptance of offer by the plaintiff’s conduct. Advertisements of bilateral contract are not usually offers. A bilateral contract is one where the outstanding obligation remains on both sides which an offeror makes a promise in return for a promise by the offeree. For example, in Partridge v Crittenden (1968) illustrates the general rule that advertisements are normally regarded as an invitation to treat. In this case, the appellant
Advertisements
Whether an invitation to treat is an offer or invitation to treat depends on the intention of the party placing the advertisement. In most cases, advertisements are treated as an invitation to treat unless on exceptional fact situations as in Carlill v Carbolic Smoke Ball Co (1892). In this case, the defendants issued an advertisement offering to pay £100 to any person who contracted influenza after using the smoke ball in a specified manner. Such a contract, when made, is called a unilateral contract. The outstanding obligation is on one side only. The plaintiff bought and used the smoke ball in the manner prescribed and caught influenza. The plaintiff sued the defendants for £100. Thus, the only outstanding obligation was on the defendants to perform their promise to pay the £100. In this case, there was an acceptance of offer by the plaintiff’s conduct. Advertisements of bilateral contract are not usually offers. A bilateral contract is one where the outstanding obligation remains on both sides which an offeror makes a promise in return for a promise by the offeree. For example, in Partridge v Crittenden (1968) illustrates the general rule that advertisements are normally regarded as an invitation to treat. In this case, the appellant