An invitation to treat (or invitation to bargain in the United States) is a concept within
contract law
A contract is a legally enforceable agreement between two or more parties that creates, defines, and governs mutual rights and obligations between them. A contract typically involves the transfer of goods, services, money, or a promise to tran ...
which comes from the
Latin
Latin (, or , ) is a classical language belonging to the Italic branch of the Indo-European languages. Latin was originally a dialect spoken in the lower Tiber area (then known as Latium) around present-day Rome, but through the power of the ...
phrase ''invitatio ad offerendum'', meaning "inviting an offer". According to Professor
Andrew Burrows
Andrew Stephen Burrows, Lord Burrows, (born 17 April 1957[BURROWS, Prof. Andrew ...](_blank)
, an invitation to treat is
Sometimes a person may not offer to sell their goods, but makes some statement or gives some information with a view to inviting others to make offers on the basis. Likewise, inviting persons to an auction, where goods to be auctioned are displayed, is not an offer for the sale of goods. The offer is made by the intending buyers in the form of bid. Such an offer (bid), when accepted by the fall of hammer or in some other customary way, will result in a Contract. A contract is a legally binding voluntary agreement formed when one person makes an offer, and the other accepts it. There may be some preliminary discussion before an offer is formally made. Such pre-contractual representations are known variously as "invitations to treat", "requests for information" or "statements of intention".
True offers may be accepted to form a contract, whereas representations such as invitations to treat may not. However, although an invitation to treat cannot be accepted it should not be ignored, for it may nevertheless affect the offer. For example, where an offer is made in response to an invitation to treat, the offer may incorporate the terms of the invitation to treat (unless the offer expressly incorporates different terms). If, as in the ''Boots'' case (described below) the offer is made by an action without any negotiations—such as presenting goods to a cashier—the offer will be presumed to be on the terms of the invitation to treat.
Case law
Generally,
advertisements
Advertising is the practice and techniques employed to bring attention to a product or service. Advertising aims to put a product or service in the spotlight in hopes of drawing it attention from consumers. It is typically used to promote a ...
are not offers but invitations to treat, so the person advertising is not compelled to sell. In ''
Partridge v Crittenden
''Partridge v Crittenden'' 9681 WLR 1204 is an English case, which was heard by the Divisional Court of the Queen's Bench Division of the High Court of England and Wales on appeal from Chester magistrates' court, and is well known (amongst othe ...
''
968
Year 968 ( CMLXVIII) was a leap year starting on Wednesday (link will display the full calendar) of the Julian calendar.
Events
By place Byzantine Empire
* Emperor Nikephoros II receives a Bulgarian embassy led by Prince Boris (th ...
1 WLR 1204, a defendant who was charged with "offering for sale protected birds"—bramblefinch cocks and hens that he had advertised for sale in a newspaper—was ''not'' offering to sell them. Lord Parker CJ said it did not make business sense for advertisements to be offers, as the person making the advertisement may find himself in a situation where he would be contractually obliged to sell more goods than he actually owned.
In certain circumstances called
unilateral contract
A contract is a legally enforceable agreement between two or more parties that creates, defines, and governs mutual rights and obligations between them. A contract typically involves the transfer of goods, services, money, or a promise to tran ...
s, an advertisement can be an offer; as in ''
Carlill v Carbolic Smoke Ball Company
''Carlill v Carbolic Smoke Ball Company'' 892EWCA Civ 1is an English contract law decision by the English Court of Appeal">Court of Appeal, which held an advertisement containing certain terms to get a reward constituted a binding unilateral of ...
''
893
__FORCETOC__
Year 893 ( DCCCXCIII) was a common year starting on Monday (link will display the full calendar) of the Julian calendar.
Events
By place
Europe
* Vladimir, ruler (''khan'') of the Bulgarian Empire, is dethroned by his fat ...
1 QB 256, where it was held that the defendants, who advertised that they would pay £100 to anyone who sniffed a smoke ball in the prescribed manner and yet caught
influenza
Influenza, commonly known as "the flu", is an infectious disease caused by influenza viruses. Symptoms range from mild to severe and often include fever, runny nose, sore throat, muscle pain, headache, coughing, and fatigue. These symptoms ...
, were contractually obliged to pay £100 to whoever accepted it by performing the required acts.
A display of goods for
sale in a shop window or within a shop is an invitation to treat, as in the ''Boots'' case, a leading case concerning supermarkets. The shop owner is thus not obliged to sell the goods, even if signage such as "special offer" accompanies the display. Also, in ''
Fisher v Bell
''Fisher v Bell'' 9611 QB 394 is an English contract law case concerning the requirements of offer and acceptance in the formation of a contract. The case established that, where goods are displayed in a shop, such display is treated as an invit ...
''
961
Year 961 ( CMLXI) was a common year starting on Tuesday (link will display the full calendar) of the Julian calendar.
Events
By place
Byzantine Empire
* March 6 – Siege of Chandax: Byzantine forces under Nikephoros II Phokas cap ...
1 QB 394, the display of a
flick knife
A switchblade (aka switch knife, automatic knife, pushbutton knife, ejector knife, flick knife, Stiletto, flick blade, or spring knife (Sprenger,Benson, Ragnar (1989). ''Switchblade: The Ace of Blades''. Paladin Press. pp. 1–14. . The sw ...
for sale in a shop did not contravene legislation which prohibited "offering for sale an offensive weapon". If a shop mistakenly displays an item for sale at a very low price it is not obliged to sell it for that amount.
For an offer to be capable of becoming binding on acceptance, the offer must be definite, clear, and objectively intended to be capable of acceptance.
The
tender process is a debated issue. In the case of ''
Spencer v Harding
''Spencer v Harding'' (1870) LR 5 CP 561 is an English contract law case concerning the requirements of offer and acceptance in the formation of a contract. The case established that an offer inviting tenders to be submitted for the purchase of ...
'', the defendants offered to sell stock by tender, but the court held that there was no promise to sell to the highest bidder, merely an invitation for offers which they could then accept or reject at will. In exceptional circumstances, an invitation for tenders may be an offer, as in ''
Harvela Investments v Royal Trust of Canada''
986
Year 986 ( CMLXXXVI) was a common year starting on Friday (link will display the full calendar) of the Julian calendar.
Events
By place
Byzantine Empire
* August 17 – Battle of the Gates of Trajan: Emperor Basil II leads a Byz ...
where the court held that because defendants had made clear an intention to accept the highest tender, then the invitation to tender was an offer accepted by the person making the highest tender. The ''Harvela'' case also made it clear that "referential bids" (e.g. “$2,100,000 or $101,000 in excess of any other offer which you may receive, whichever is the higher”, as in the ''Harvela'' case) are void as being "
contrary to public policy and
not cricket".
Auctions
In
England
England is a country that is part of the United Kingdom. It shares land borders with Wales to its west and Scotland to its north. The Irish Sea lies northwest and the Celtic Sea to the southwest. It is separated from continental Europe b ...
,
auction
An auction is usually a process of buying and selling goods or services by offering them up for bids, taking bids, and then selling the item to the highest bidder or buying the item from the lowest bidder. Some exceptions to this definition ex ...
s are governed by the
Sale of Goods Act 1979
The Sale of Goods Act 1979c 54 is an Act of the Parliament of the United Kingdom which regulated English contract law and UK commercial law in respect of goods that are sold and bought. The Act consolidated the original Sale of Goods Act 1893 ...
(as amended). Section 57(2) provides: "A sale by auction is complete when the auctioneer announces its completion by the fall of the hammer, or in other customary manner. Until the announcement is made any bidder may retract his bid." S. 57(3) provides further: "An auction sale may be subject to a reserve price". However, if the auction is held ''without reserve'' then the auctioneer is obliged to sell to the highest bidder. It is implicit from ''
Payne v Cave
''Payne v Cave'' (1789) 3 TR 148 is an old English contract law case, which stands for the proposition that an auctioneer's request for bids is not an offer but an invitation to treat. The bidders make the offers which can be accepted by the aucti ...
'' (1789),
['']Payne v Cave
''Payne v Cave'' (1789) 3 TR 148 is an old English contract law case, which stands for the proposition that an auctioneer's request for bids is not an offer but an invitation to treat. The bidders make the offers which can be accepted by the aucti ...
'' (1789) 3 TR 148 an early case concerning auctions, that each bid is deemed to expire when others make higher bids; but some auctioneers (such as
eBay
eBay Inc. ( ) is an American multinational e-commerce company based in San Jose, California, that facilitates consumer-to-consumer and business-to-consumer sales through its website. eBay was founded by Pierre Omidyar in 1995 and became a ...
) have lawfully amended this presumption so that, should a higher bidder withdraw his bid, they may accept a lower one.
See also
*
Offer and acceptance
Offer and acceptance are generally recognised as essential requirements for the formation of a contract, and analysis of their operation is a traditional approach in contract law. The offer and acceptance formula, developed in the 19th century, id ...
Notes
References
*Andrew Burrows, ''Casebook on Contract'' (Hart Publishing, 2007) Ed.
{{Authority control
Contract law
Legal doctrines and principles
Auction case law