Advertisement of NewBean Coffee: Invitation to Treat or Offer for Acceptance?

AUSTRALIAN COMMERCIAL LAW
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PART A
Question 1
Issue
The main objective is to highlight whether the advertisement of Machine Express Pty Ltd
regarding the sale of the NewBean Coffee would be categorised as invitation to treat or an offer
for acceptance.
Law
An offer is directed on behalf of a party to other party for acceptance in regards to enact a
contract. An invitation to treat is extended to the public so as to invite their offer for starting the
negotiation with interested buyers to enact the contract for sale The advertisements for sale of
goods are generally categorised as invitation to treat and do not constitute an offer1. Further, if
the advertisement contains the various necessary details of the offer such as fixed price, details of
object and other specifications, then it may be categorised as offer for acceptance as highlighted
in the verdict of Carlill v Carbolic Smoke Balls Company2.
As per this case, the company had deposited a fixed sum into the bank to pay anyone who would
accept the offer. Also, the advertisement was quite objective and had all the relevant details
including the precise method of consumption so as to be eligible for the prize money. Only such
advertisements that indicate all the relevant details for contract formation may be treated as
offers. Another relevant case involving an advertisement is Partridge v Crittenden3 case. As per
the case verdict, the advertisement about the sale of the antique birds was not declared as offer as
it was mere invitation to treat and thereby, the seller party was not legally bound to sell the birds
against the offer as they had refused the offer of buyer4.
Application
1 Wayne Pendleton & Roger Vickery, , Australian business law: principles and applications, (Pearson Publications,
5th ed., 2015) 117
2 Carlill v Carbolic Smoke Balls Company [1893] 1QB 256.
3 Partridge v Crittenden [1968] 1 WLR 1204
4 Andy Gibson & Douglas Fraser, Business Law (Pearson Publications., 8th ed, 2014) 121

Heidi was looking for a coffee machine for her new store and she saw an advertisement
regarding the sale of a NewBean Coffee Machine of Machine Express Pty Ltd. The
advertisement did not contain any specific price of the machine and it just contained the
information that the NewBean Coffee Machine at the half price. Cleary, it would not be
categorised as offer for acceptance as there are many essential factors such as price, description
of the offer required for enacting a contract that are missing. Also, the advertisement itself is
indefinite, unclear and not explicit which means it leaves significant space for negotiation and
additional information request from the buyer which also implies that it is not an offer. It implies
that the Machine Express Pty Ltd is mainly seeking an offer from the interested buyers under
invitation to treat for negotiating the price and other essential terms for the contract. Thereby, it
would be fair to opine that the advertisement is merely an invitation to treat.
Conclusion
Cleary, the advertisement for sale of the NewBean Coffee will be an invitation to treat because it
does not constitute the details regarding the price and other terms of the offer which implies that
it would not be an offer to enact a unilateral contract.
Question 2
Issue
The main issue is to comment whether Heidi has the legal right to claim damages under breach
of contract against the manager of Machine Express Pty Ltd for selling the premium model of
NewBean Coffee Machine to other customer instead of her.
Law
The offeror needs to direct an offer to the offeree for acceptance. When the offeree accepts the
offer for the mutually agreed consideration, then a legally binding contract would be enacted
between the parties. Therefore, the parties have to complete their contractual liabilities and they
cannot deny performing the obligations arising under the contract. The offer would be
enforceable for contract enactment when it reaches to the offeree. Further, it is essential for a