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Invitation to Treat

Invitation to Treat: There is a fundamental distinction between an offer and what is referred to as a mere "invitation to treat" (Harvey v Facey [1893] A.C. 552).

It is not always easy to determine the difference in practice and cases abound on the point over the years; but the essence is that in the case of an invitation to treat one person is attempting to discover whether a deal might be possible, or offering a rough indication of the kind of conditions and terms that might form the basis of negotiations.

There are some special cases as to which the nature of a communication is settled by law:

in an auction, the bid is the offer and the auctioneer will generally, but not necessarily always, accept it (Payne v Cave 100 E.R. 502);

the sale is completed when the auctioneer accepts the bid (Sale of Goods Act 1979 s.57(2));

displaying goods in a shop is (subject to express indications to the contrary) an invitation to treat and not an offer (Timothy v Simpson 172 E.R. 1337);

this applies whether or not the customer is expected to help himself or herself from a shelf (Pharmaceutical Society of Great Britain v Boots Cash Chemists (Southern) Ltd [1953] 1 Q.B. 401);
advertisements that are intended to result in a contract between two or more parties are generally invitations to treat and not offers, again subject to express indications to the contrary (Partridge v Crittenden [1968] 1 W.L.R. 1204);

but an advertisement by person A that promises to take action X if person B takes action Y is an offer (Carlill v Carbolic Smoke Ball Co [1893] 1 Q.B. 256);
advertisements for rewards are likely to fall into the latter category (Gibbons v Proctor (1891) 64 L.T. 594);

there is a difference of academic opinion about the nature of timetables and the like for travel - Chitty on Contracts concludes: "The authorities yield no single rule; one can only say that the exact time of contracting depends in each case on the wording of the relevant document and on the circumstances in which it was issued." - 2-021;

at common law statement that goods are to be sold by tender is generally a mere invitation to treat (Spencer v Harding (1869-70) L.R. 5 C.P. 561);

in many cases, however, this original common law position has been overtaken, most notably in the field of public procurement where an announcement of a tendering exercise is generally binding - see, in particular, the Public Contracts Regulations 2006/5 and the Utilities Contracts Regulations 2006/6.
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Article published 25/05/2017

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