Distinguish between an offer and an invitation to treat

FOR POLLY VS WILSON
Here Alan has not written just to Barbara, but to others as well, so the situation could be
analogous. Alan obviously knows that he has written to more than one person, so he would
not subjectively intend to be bound to sell the painting to more than one person. However, the
situation will not be judged Macdonald & Atkins: Koffman& Macdonald's Law of Contract
Guidance on answering problem questions © Oxford University Press, 2014. All rights
reserved. subjectively, but objectively, as has been made clear in numerous cases such as
Storer v Manchester City Council [1974] 3 All ER 824 at 828. The question is what the
reasonable person would think in relation to the letter: whether it was only Barbara who was
being approached or other people as well. However, even if the argument can be dismissed
that the letter is not an offer because of the way in which it is like an advertisement, the
particular wording of the letter, clearly indicates the lack of an intention to be bound by Alan
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In this case it is necessary to consider if Barbara has made a contract with Alan for the sale of
the painting. What must be looked at is whether Alan’s letter, or fax to Barbara, is an offer or
an invitation to treat. If there was an offer, it will need to be considered whether there was an
effective acceptance, and this will require revocation, and the postal rule, to be looked at.
Task 1
1.1 Distinguish between an offer and an invitation to treat
We refer to an offer as a statement of one party's intention to enter into a contract with
another party, known as the offeree, on the terms and conditions specified by the offeror.An
offer is defined by (McKendrick 2019),as a statement of willingness to be bound on stated
term.When the offer is accepted, the two parties enter into a legally binding agreement known
as a contract. Essentially, the offeree must accept the offer in order for the parties to be bound
by it ( both the offeror and the offeree ).The first requirement for the formation of a valid
contract is o erff .
An invitation to treat, on the other hand, is an advertisement, promotion, or display of items
that invites a third party to make an offer in connection with the subject of the advertisement,
promotion, or display, as opposed to an invitation to treat. In essence, an offer to treat
suggests that the sender is open to receiving suggestions from people who have seen the
invitation and are interested in it. According to (Turner, 2014) an invitation to treat is a
statement of intent by the offeror to be legally bound by the terms of the offer.
Section 2 of the Contracts Act4 defines an offer as the willingness to do or abstain from doing
anything signified by a person to another. A good way of looking
at the di erenceff between the two terms is that an o erff is a definite promise to be bound on

specific terms, whereas an invitation to treat is only an indication that someone is prepared to
receive o ers with a view to forming a binding contract. A person making an invitation toff
treat does not intend to be bound as soon as it is accepted.
The distinction between an o er and invitation to treat can be seen in the following cases:ff
In Gibson v Manchester City Council [1979] 1 WLR 294 the defendant city council sold
council houses to tenants who wanted to buy them. A letter from the Council stated that ‘The
Corporation may be prepared to sell the house to you at...£2,180'. An application for a
purchase was submitted by the claimant council tenant after discussions. However, due to a
shift in political control, the Council ceased selling council houses to tenants. The court had
to decide if a sale contract had been concluded. However, the words ‘may be prepared to' in
the letter were ‘fatal' because they simply spelt out the financial circumstances on which the
council would be prepared to discuss a sale and purchase in due course.
Crucially, the use of the word ‘o er’ by one party is not decisive.ff
Partridge v Crittenden [1968] 1 WLR 1204 An advert for the sale of birds - an invitation to
treat (rather than an offer) because the seller could not have intended to contract with the
large number of people who could theoretically accept.
We are instructed to offer [certain business stock] to the wholesale trade for sale by tender',
defendants stated in Spencer v Harding (1870) LR 5 CP 561. The ad specified where to view
the goods, when to open tenders, and that payment must be made in cash. No reserve was
stated. The claimant made the highest offer, but the defendant refused. This is because the
highest bidder is not required to sell unless the advertisement specifies otherwise.
In Carlill V Smoke Ball Co. Ltd 5, the promise to pay £100 to anyone who took the smoke
ball and got influenza amounted to an offer. In a similar vein, the court in Carlill v. Carbolic
Smoke Ball Co. case determined that the company's marketing constituted an offer made
entirely by the company. The court reached this conclusion because Carlill followed the
instructions in the advertising and contracted a cold as a prerequisite of earning 100 pounds.
Carlill accepted the offer since she acted in response to the advertisement, resulting in the
formation of a legally enforceable contract.
In addition, another concept to consider is an invitation to tender. These are generally
considered invitations to treat, and the offer is made when the tender is submitted. The
organisation looking for tenders are then free to accept or reject this. However, an exception
to this is an offer to sell to the highest bidder.However, an exception to this is an offer to sell
to the highest bidder. For example, in the case of HarvelaInvestments Ltd v Royal Trust of
Canada.6
However, where the advertisement is for aunilateral contract – such as the o er of aff
rewardfor lost property – the courts have held that the advertisement will generally amount to
ano er. Also, it is important note that there is di erence between amere boast or ‘puff ff ff
’ (apromotional statement or claim, often associated with advertising, such as ‘your wife
willabsolutely love this necklace!’) and a promise which a reasonable man would take
seriously.The leading case on the di erence between a mere pu and an o er, and onff ff ff
unilateralcontracts isCarlill v Carbolic Smoke Ball Company [1893] 1 QB 256

Mavis VMr Wilson
Was Mr Wilson's advertisement an offer or merely an invitation to treat?
An advertisement is typically regarded as an invitation to treat by courts because it is a pre-
contractual arrangement. This is not always considered an offer, but it may be construed as
one in certain circumstances.
Wilson, sent out ads asking for the public's input on pricing so that they could negotiate and
come to a final agreement on a final price. According to the decision in Partridge v
Crittenden 2, an advertisement in a newspaper for the sale of protected birds did not constitute
an offer to sell. In another case,Grainger & Son v Gough(1896) AC 325, it was held that a
issuing a pricelist does not amount to an offer, but is an invitation to treat.
If we consider advertisement to be offers, then the person who created the advertisement has
already offered things to each and every person who reacts to the advertisement, which the
court finds to be irrational.
When Mavis sent an email to Mr Wilson saying that she will pay £200 for both painting
advertised, then an offer has been made. HoweverMr Wilson is free to accept or reject offer.
Because Mr Wilson is the one who placed the advertisement and is not liable in contract with
everyone who is willing to purchase the paintings.
To conclude, there is a clear distinction between an offer and an invitation to treat, and what
this means when applied to different circumstances. The distinction between both, is
essentialwith regards to understanding what constitutes as an offer or invitation to treat,
whether it is capable of acceptance, and whether it is binding on either party. It is most likely
that the advertisement of Mr Wilson is an invitation to treat which invites others to make an
offer to buy his paintings. Both Mavis and Polly the offerors made offers to buy the painting
with Mr Wilson.
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1.Fisher v Bell (1961) 1 QBD 795
2. Partridge v Crittenden 1968] 1 WLR 1204
3. Williams v Carwardine [1833] 5 C&P 566
4. Contract Act 2010 5.2
5. Carlill v Carbolic Smoke Ball Company (1893) 1 QB 256
6.Harvela Investments Ltd v Royal Trust of Canada [1986] AC 207
1.2 Identify and explain the legal rules applicable to acceptance of an offer
An offer is an expression of willingness to contract on certain terms. It
must be made with the
intention that it will become binding upon acceptance. There must be no
further negotiations
or discussions required.

On the facts, we may examine two cases. First of all is Storer v
Manchester City Council (1974)
wherein the COA found that there was a binding contract. Council had
sent Storer a
communication that they intended would be binding upon his acceptance.
All Storer had to do
to bind himself to the later sale was to sign the document and return it.
In Gibson v Manchester City Council (1979) the Council sent Gibson a
document which asked
him to make a formal invitation to buy and stated that the council ‘may be
prepared to sell’.
Gibson signed the document and returned it. CoA held that a contract had
been concluded but
the House of Lords held the opposite because the Council had not made
an offer capable of
being accepted. Lord Diplock stated that the words ‘may be prepared to
sell’ are fatal .
It is clear from these cases that not all communications will be offers.
Chris Turner (2014) defines valid acceptance as a statement of intention to be bound
absolutely and unconditionally by the terms of the contract. The second requirement for the
formation of a valid contract is acceptance.
Once a valid acceptance takes place, a binding contract is formed. It is therefore important to
know what constitutes a valid acceptance in order to establish if the parties are bound by the
agreement. There are three main rules relating to acceptance:
1. The acceptance must be communicated to the offeree.
2. The terms of the acceptance must exactly match the terms of the offer.
3. The agreement must be certain.
Acceptance entails unconditional agreement to all of the terms of the offer. It can be verbal,
written, or inferred from behavior. It must be unqualified and absolute. The traditional
approach is known as the 'mirror image' rule of contractual formation because the court must
find a clear and unequivocal offer that is mirrored by a clear and unequivocal acceptance.
While this approach has the advantage of providing a degree of certainty, it is important to
remember that it has been criticized for being overly rigid. Acceptance must be made in
response to an offer, as acceptance cannot 'mirror' an offer if it is made unaware of the offer.
This requirement is necessary because, if a contract is an agreed-upon bargain, there can be
no agreement without knowledge. So, for example, a claimant would not be entitled to a
reward if he or she performed the act unaware of the reward offer. This rule is nicely
illustrated in the following example.
R v Clarke (1927) 40 CLR 227: The Government offered a monetary reward for information
leading to the arrest and conviction of people responsible for the murder of two police
officers. C was arrested in connection with the murders and made a statement to police about
the murders which led to the conviction of other men. C was released and subsequently
claimed the reward.