Contract: Offer vs Invitation to Treat

Offer and Invitation to Treat

An offer is a proposal put from one party to another. It must be intended to be legally binding if it is to be a valid part of a contract. The offer comes from the offeror and goes to the offeree. The terms of the offer must be certain. 
An offer can be made to a definite person, to a group or to the whole world. If the offer is specifically made to one person only, only that one person can accept, when made to the whole world anyone can then accept the offer.  

Carlill v Carbolic Smoke Ball Co [1893]: An offer can be open to anyone willing to accept it. The defendants, Carbolic Smoke Ball Co placed an advertisement stating that if people purchased their product, used it as directed and still contracted influenza then they would award them £100. The claimant, Mrs Carlill, purchased the smoke balls, used them as directed and still contracted influenza and she wished to claim the £100. The defendants refused to pay the claimant the £100 as they claimed that this was not an offer but 'mere puff' used for marketing purposes. The Court of Appeal held that the advertisement was a unilateral offer which was made to everyone who purchased the smoke balls and used them as directed. If they then contracted the influenza they would then be eligible to claim the reward.

An invitation to treat is not recognised by law as part of a legally binding contract, it is not a valid offer but rather the initial negotiations of a contract. It is an expression of willingness to negotiate between the parties, the other party can then consider the invitation to treat and either reject it or make an offer based upon it. 

Fisher v Bell [1961]: This involved a criminal offence under the Offensive Weapons Act 1959. This Act made it an offence to 'offer for sale offensive weapons'. A shopkeeper displayed a flick knife in his shop window with a price tag. He was prosecuted under the Act. Held, the flick knife was an invitation to treat, no offence was committed.

Pharmaceutical Society of Great Britain v Boots [1953]: Involved the Pharmaceutical and Poisons Act 1937 which stipulated that if drugs were being dispensed a pharmacist must be present. Boots were expanding in size but were not employing more pharmacists. But there was a pharmacist at the cash desk. The union decided that Boots were committing an offences under the Act. They argued that the point of dispense was when the shopper removed the drug from the shelves. Held, the dispensing took place at the till where there was a pharmacist present. 

Partridge v Crittenden [1968]: This involved the Wild Birds Act 1954 which makes it an offence to offer for sale wild birds. The defendant advertised in a magazine ‘wild finches for sale, 25s each’. Held, this was not an offer but an invitation to treat. If there had been a set amount of hens that it could be different, or the phrase ‘first come first served’.

Letkowitz v Great Minneapolis Store [1957]: A shop advertised fur coats and shawls, anyone who turns up by 9am on a certain date could have a fur coat for $1 rather than $100. They stated ‘first come first served’. The claimant queued up and was refused the coat as it was only open to women. He tried to buy the shawl and was refused. The claimant sued but didn’t win the case over the coat but he did over the shawl. Held, there was certainty in the offer due to the specifics given.

O’Brien v MGN Ltd [2001]: The daily mirror was offering scratch cards, if you matched 3 you would win. O’Brien thought he had won, unfortunately 1400 other also won, the daily mirror refused to pay. The small print in the paper said see T&Cs see mirror group rules. This stated if there was more than one winner then the winner would be pulled out of a draw.

Bowerman v ABTA Ltd [1996]: Bowerman booked a holiday with a travel company with an ABRA logo. There was a dispute over the holiday and the claimant sued ABTA who claimed they weren’t liable. Held, the ABTA sign was an offer that he accepted when he booked the holiday.

Harris v Nickerson [1873]: An auction sale was advertised and later cancelled. The claimant who had travelled to the place of sale claimed his travelling expenses as damages. Held, this was a declaration of intent.

Gibson v Manchester City Council [1978]: Homeowners were in the process of purchasing their council houses. The local council changed from Conservative to Labour as transaction were proceeding. Labour said they would honour any contracts already made. The council on all documentation wrote ‘may be prepared to sell’. There was no mention of a price as he was trying to get extra money off. Held, there was no contractual agreement as the word ‘may’ indicated a lack of certainty.

Storer v Manchester City Council [1974]: Homeowners were in the process of purchasing their council houses. The local council changed from Conservative to Labour as transaction were proceeding. Labour said they would honour any contracts already made. The council said ‘if you sign your part of the agreement for sale we will send in return our signed part’. The claimant signed it, and the council changed. Held, there was a contract as there was a price and a mortgage arranged.

Stevenson v McLean [1880]: The defendant offered a quantity of iron to the claimant at £2/ton, the offer was open until Monday. On Monday morning, the claimant asked if they would accept £2/ton but delivery over a 2 month period. The defendant did not reply. The claimant then accepted the original offer. The defendant refused to sell. Held, this was not a counter-offer but a request for further information.

Loftus v Roberts [1902]: Involved an actress employed on a tour she was told if the tour was successful and came to London she would be re-employed on a ‘west end salary’ to be mutually agreed. The tour was successful, she was sacked. In terms of the salary there was a lack of certainty and she lost the case.

Blackpool and Fylde Aero Club Ltd v Blackpool Borough Council [1990]: Blackpool council owned an aerodrome. The aero club had a lease up for renewal and they put it out to competitive tender. ‘We will consider any offers that are made so long as they are before 12 on Thursday’. The aero club put in their tender, it got to the council by 12 on Thursday. The employees didn’t empty their letterbox, it was not read until the Monday and they claimed it arrived too late. There was no guarantee that they would gain the space regardless. There is a contract of reading and taking into consideration the tender. The council broke this contract.