CONTRACT LAW L4 - Offer & Acceptance - INVITATIONS TO TREAT Flashcards
What is an invitation to treat? (1)
A first step in negotiations which may or may not lead to a firm offer by one of the parties.
What is an offer? (1)
An undertaking to be contractually bound by the terms of that offer in the event of an unconditional acceptance being made by the offeree.
Can an invitation to treat be accepted to form a binding contract? (1)
No, an offer must be distinguished from a mere invitation to treat.
What are example of invitations to treat? (4)
Advertisements, displays of goods, invitations to tender and auctions.
What is the general rule regarding advertisements? (2)
They are regarded as statements inviting negotiations or invitations to treat but this general rule does not apply where the advertisement amounts to a unilateral offer.
What does the case of CARLILL V CARBOLIC SMOKE BALL 1893 demonstrate? (5)
The defendants issued an advert in which they offered to pay £100 to any person who used one of their smoke balls in a specified manner for a specified period but who nonetheless contracted influenza still.
The plaintiff bought one of the balls and used it as described and nevertheless contracted influenza.
The facts established a contract which the defendants were bound to pay the plaintiff £100 in relation to the event which has happened
So the plaintiff is entitled to recover that sum.
This is an example of a unilateral contract.
What is the general rule regarding displays of goods? (4)
Price-marked displays of goods in a shop window are not an offer but an invitation to treat, regardless of whether the shop actually expresses designates that the good are an offer. A shop’s special offer usually amounts to no more than an invitation to treat. Websites and goods displayed on the shelves of a self-service store are invitations to treat.
What is a request for tenders? (2)
Where a party wishes to purchase a major item or service. The requester / offeror invites tenders from those interested in supplying the goods or the services required.
What is the general rule regarding request for tenders? (1)
This action of inviting parties to tender is deemed a invitation to treat.
When is the general rule displaced in terms of request for tenders? (2)
Where the invitation to tender expressly contains to accept the highest or lowest bid, in this case the party requesting tenders has made an offer to enter into a unilateral contract.
The required act is making the highest / lowest bid and when this is carried out the other party is bound.
What is the general rule in relation to auctions? (4)
The auctioneer’s request is an invitation to treat. The bidder makes an offer which the auctioneer is then free to accept or reject. The acceptance of the offer is indicated by the fall of the auctioneer’s hammer. The bidder may revoke their offer any time before the fall of the hammer reflected in the sale of goods act 1979.
What is an auction without reserve? (3)
In most auctions there is a ‘reserve’ price so if no bid above this price is received the seller keeps the good. In an auction without reserve the seller promises to sell the highest bidder whatever that bid turns out to be. If the auctioneer refuses to sell to the highest bidder then they may be sued for breach of contract.
