Invitation to Treat Flashcards
Can an invitation to treat be accepted to be contractually binding?
no
What is an invitation to treat?
the first step in negotiations which may/ may not lead to a firm offer by one of the parties.
= usually takes the form of an invitation to make an offer.
Where is invitation to treat most commonly found? (4 scenarios)
· Advertisements
· Displays goods
· Invitations to tender
· Auctions
What is the general rule for advertisements?
They are regarded as statements inviting further negotiations or invitations to treat
What is the exception to the general rule for advertisements?
where the advertisement amounts to a unilateral offer.
How are Displays goods treated?
Price-marked goods displayed in a shop window is NOT an offer for sale but an invitation to treat - same applies to goods displayed on the shelves of a self-service store
What is a request for tender?
used where a party (usually a company or public body) wishes to purchase a major item or service.
The requestor invites tenders (i.e. offers) from those interested in supplying the goods/ services required = treated as an invitation to treat
What is an exception to a request for tender?
where the invitation to tender expressly contains an undertaking to accept the highest or the lowest bid = form of 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 to Auctions?
auctioneer’s request for bids is an invitation to treat
When is acceptance made in auctions?
indicated by the fall of the auctioneer’s hammer/ or in other customary manner; and until the announcement is made any bidder may retract his bid
What is a ‘reserve’ price on an auction sale?
if no bid above this price is received, the seller keeps the goods.
What happens in an auction without reserve?
the seller promises to sell to the highest bidder whatever that bid turns out to be = forms 2 types of contract - bilateral + unilateral.
What is a unilateral contract?
An offer which prescribes an act which, when performed, constitutes acceptance.
