Offer and Invitation to Treat

In our daily life, we are actually entered into contracts without knowledge. In simple words, contract is a bargain, in which both parties are expect to get benefits with consensus ad idem in a legal relation. An offer is a necessary element that must present for a legally binding contract to be in place.

An offer and an invitation to treat are two different aspects. An invitation to treat is defined as an action inviting other parties to make an offer to form a contract, whereas an offer is an expression made by offeror to offeree communicating the offeror’s willingness to perform a promise. The distinction is important because accepting an offer creates a binding contract while accepting an invitation to treat is actually making an offer. Advertisements, brochures and auctions are usually an invitation to treat. In this case, the superstore that displayed the goods is making an invitation to treat, while Anna is making an offer to buy the goods when she puts them into the basket.

Advertisement, usually is an invitation to treat, is defined as a communication media use to persuade the audience to take some action for the particular products. Most commonly, the desired result is to attract the audience attention with respect to a commercial offering. Advertisements have no sufficient offer to contract. An advertisement is usually silent on matters which are valid to contract such as the availability of the product or service advertised. Thus, advertisement is an expression of willingness to negotiate, inviting the reader to request the service or goods prescribed.

An auction is a process of buying and selling goods or services by offering them up for bid, taking bids, and then selling the item to the highest bidder. The original advertising of the auction is just an invitation to treat. When a bid is made by a person, an offer is made. When the hammer falls, the winning ‘offer’ has been accepted. The seller now has a legally binding contract with the