Tender-Invitation to Treat-Contract Law

Topics: Contract, Offer and acceptance, Contract law Pages: 10 (2066 words) Published: March 27, 2013
Contract Law

Presented by Kerra Bazzey

Contract Law
Formation of a Contract
Terms of a Contract
Discharge of a Contract
Remedies for Breach of a Contract

Formation of a Valid and
Enforceable Contract
Intention to Create Legal Relations
Privity of Contract
Capacity to Contract
Must not be illegal or contrary to public policy

Formation of a Contract
A contract is an agreement which creates legal rights and obligations between the parties to it. It is formed when the parties reach agreement on the essential features of the bargain.
Offer – a statement made by a party which manifests an intention to be bound on precise terms.
The person who makes an offer is known as the offeror or the promisor. The person to whom the promise is made is the offeree or the promisee.
Bilateral contracts - most common form of contract – here there is an exchange of promises.
Unilateral contracts - commonly known as an ‘if’ contract - here the promise is one-sided as the offeror alone makes a promise.

Elements of an Offer

An offer can be made to an individual, a group of persons or to the public at large. An offer to the public at large can only be made where the contract is a unilateral one.


An offer should not be vague. Where on the face of it an offer appears to be vague, but the parties have had prior dealings or are operating in a particular trade, then the courts will imply certain terms and conditions to conclude that a statement that initially appeared vague is in fact sufficiently certain.


A response in request to clarification on price or a request for more information is not an offer.

Elements of an Offer
Consider the following exchange:
- H: “Will you sell us your farm called Bumper Hall Pen? Fax me the lowest price”?
-F: “Lowest price for Bumper Hall Pen is $1,200,000.00”. -H: “We agree to buy Bumper Hall Pen for $1,200,000.00 asked by you”.
- F never replied to this. H argued there was a valid contract. -The court held that F’s statement was not an offer.
- It was merely a response to a request for information which showed the lowest price that F would have been prepared to charge in the event that he chose to sell the Bumper Hall Pen.
- H’s last communication could therefore not be regarded as an acceptance.

Elements of an Offer

If a person declares that he intends to so something, that
statement of intention is not an offer.
If someone acts based on what was declared, and the person
who made the declaration does not carry out the act he stated he would, but the person who acted based on what was said suffers a loss, the person who suffered the loss cannot bring an action against the person who made the declaration.

This is because there was never any offer so there was nothing to be accepted.

Consider the following case:
- An auctioneer advertised in the newspaper that he would be holding a sale of office furniture.
- A broker commissioned to buy office furniture travelled from far to attend the sale but all the furniture was withdrawn.
- The broker sued the auctioneer for his loss of time and expenses. - Can he recover for his loss of time and expenses?
- No.
- The court would hold that an intention to do something does not constitute an offer geared towards create a binding contract.

Invitations to Treat
Invitation to Treat
An offer must be distinguished from an invitation to treat.
An invitation to treat is an invitation to someone else to make an offer. It is not an offer because there is no intention to be legally bound. It is an invitation to negotiate.
There are 4 categories of invitations to treat
- advertisements in a newspaper
- display of goods on a shelf
- auction sales
- invitations to tender

Invitation to Treat
As a general rule, an advertisement in a newspaper is not an offer. It is an attempt to induce offers. This general rule is displaced where the...
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