Offer & Invitation to Treat

Topics: Contract, Invitation to treat, Advertising Pages: 5 (1899 words) Published: August 4, 2013
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 advertised in a magazine ‘Quality British A.B.C.R… bramblefinch cocks, bramblefinch hens, 25s. each’ under the column of ‘Classified Advertisements’ and there was no words of ‘offers for sale’ to be found. The respondent answered the advertisement and issued a cheque for 30s. to the appellant. The issue was whether the advertisement was an invitation to treat of an offer for sale. The court held that the advertisement was not an offer, but only an invitation to treat. Ashworth J stated that, ‘… in regard to articles in a shop window, namely that the insertion of an advertisement in the form adopted here under the title ‘Classified Advertisements’ is simply an invitation to treat.’

In Coelho v The Public Services Commission (1964), the appellant applied for the post of Assistant Passport Officer advertised in the Malay mail newspaper and he was informed that he was accepted. After being posted to the Immigration Office, he was informed that his appointment was terminated. The issue was whether the application made by the appellant could be an offer. The court held that the advertisement is an invitation to treat and the resulting applications were offers. The information conveyed to the appellant was an unqualified acceptance. Therefore, the respondent had acted ultra vires in purporting to terminate his appointment in a manner for officers on probation.

Display of goods
Display of goods is regarded as an invitation to treat. The reason behind this rule is that to hold otherwise, the seller has to sell whatever quantity of item displayed and the buyer cannot change his mind once an item is chosen and taken from the display shelf.

For instance, in Pharmaceutical Society of Great Britain v Boots (1953), Boots introduced the new self-service system into their shops whereby customers would pick up goods from the shelf, put them in their basket and take them to the cashier’s desk to pay. The Pharmaceutical Society of Great Britain brought an action to...
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