Invitations to Treat Flashcards
What is an invitation to treat in contract law?
A) A preliminary step inviting offers
B) A binding promise to be legally bound
C) A unilateral contract requiring an act
D) An offer that cannot be revoked
A) A preliminary step inviting offers
Explanation:
An invitation to treat is not an offer but an invitation for others to make an offer. It cannot be accepted to form a legally binding contract.
Which of the following is generally considered an invitation to treat?
A) A supplier agreeing to sell 500 units to a buyer
B) An auctioneer accepting the highest bid
C) A display of goods in a shop window with price tags
D) A court ruling enforcing a contract
C) A display of goods in a shop window with price tags
Explanation:
Goods displayed in shops are invitations to treat, not offers (Fisher v Bell 1961). The offer occurs at checkout, where the seller can choose to accept or refuse.
In which situation does an advertisement amount to an offer rather than an invitation to treat?
A) When it states the price of a product in a newspaper
B) When it specifies an intention to negotiate further
C) When it contains a clear promise that can be accepted by performance
D) When it encourages customers to contact the seller for more details
C) When it contains a clear promise that can be accepted by performance
Explanation:
A unilateral contract occurs when an advert clearly prescribes an act for acceptance (Carlill v Carbolic Smoke Ball Co 1893). The deposit of £1,000 in that case showed intention to be legally bound.
Which statement is true about invitations to tender?
A) A request for tenders is usually an invitation to treat
B) The lowest tender must always be accepted
C) A contract is automatically formed when a tender is received
D) A tender creates a bilateral contract upon submission
A) A request for tenders is usually an invitation to treat
Explanation:
A request for tenders is an invitation to treat (Spencer v Harding 1870), meaning the requestor can accept or reject any bid. However, if the tender specifies that the highest or lowest bid will be accepted, it is a unilateral offer (Harvela Investments v Royal Trust 1985).
A shopkeeper places a television in the store window with a price tag of £500. A customer enters the store and demands to buy it. Is the shopkeeper legally bound to sell?
A) No, because the price tag is an invitation to treat
B) Yes, because the price tag is an offer
C) Yes, because the customer accepted the offer
D) No, because the shopkeeper has the right to refuse
D) No, because the shopkeeper has the right to refuse
Explanation:
A price tag is not an offer, but an invitation to treat. The shopkeeper can refuse to sell before a contract is formed (Fisher v Bell 1961).
A company advertises a £1,000 reward for returning a lost dog. Sarah finds the dog and returns it after seeing the advert. Can she claim the reward?
A) No, because all advertisements are invitations to treat
B) No, because she did not negotiate a contract
C) Yes, because this is a unilateral offer
D) Yes, because all advertisements create contracts
C) Yes, because this is a unilateral offer
Explanation:
The advert sets a clear prescribed act for acceptance (returning the dog), making it a unilateral offer (Carlill v Carbolic Smoke Ball Co 1893). Sarah accepts by performing the act.
A company sends out a request for bids on a construction project. One bidder submits the lowest offer, but the company awards the contract to a higher bidder. Is this allowed?
A) No, because the lowest bidder must always win
B) Yes, because the request for bids is an invitation to treat
C) Yes, because invitations to tender are binding only if they specify automatic acceptance
D) No, because once a tender is submitted, it is automatically accepted
B) Yes, because the request for bids is an invitation to treat
Explanation:
A request for tenders is usually an invitation to treat, meaning the company can reject any bid (Spencer v Harding 1870). However, if the invitation guarantees acceptance of a specific bid, it becomes a unilateral offer (Harvela Investments v Royal Trust 1985).
At an auction, the auctioneer asks for bids on an antique chair. Before the hammer falls, the highest bidder withdraws their bid. Can they do this?
A) No, because all bids at an auction are binding
B) No, because auctions create contracts immediately
C) Yes, because a bid is an offer that can be withdrawn before acceptance
D) Yes, because the bidder automatically owns the item once they place a bid
C) Yes, because a bid is an offer that can be withdrawn before acceptance
Explanation:
At an auction, a bid is an offer, and acceptance only occurs when the hammer falls (Payne v Cave 1789). A bidder can withdraw their offer before acceptance.
An auctioneer holds a sale “without reserve.” The highest bid is £50, but the auctioneer refuses to sell. Is this legally valid?
A) No, because a “without reserve” auction creates a unilateral offer
B) Yes, because the auctioneer can refuse any bid
C) No, because all auctions must have a minimum bid
D) Yes, because the highest bid was too low
A) No, because a “without reserve” auction creates a unilateral offer
Explanation:
In an auction without reserve, the auctioneer must accept the highest bid, or they breach a unilateral contract (Barry v Davies 2000). The bidder can sue for damages.
A customer emails a business, stating, “I am interested in purchasing your laptop for £500.” The business replies, “We may be willing to sell.” Has a contract been formed?
A) Yes, because stating a price is an offer
B) Yes, because the response shows agreement
C) No, because an agreement is only valid if payment has been made
D) No, because the reply is an invitation to treat
D) No, because the reply is an invitation to treat
Explanation:
The business’s response lacks certainty and does not show a clear intention to be bound. Phrases like “may be willing to sell” indicate an invitation to negotiate, not an offer (Gibson v Manchester City Council 1979).
