Offer and invitation to offer or invitation to treat are two completely different aspects of a contract. However, many a times, people do mistake of considering them as one which gives rise to many futile cases that are considered void ab initio. There are many instances where initially invitation to offer exists and offer goes afterwards.
What is an offer/proposal and how it differs from invitation to offer?
According to Sec. 2(a) when a person signifies to another his willingness to do or to abstain from doing anything, with view of obtaining the assent of that other to such act or abstinence, he is said to make an offer. However, an invitation to offer can said to be call to have a sight over available offers. Thus. Invitation to offer is an offer to sit and negotiate the offer that will be original and also that of binding nature. Therefore it can be said that an invitation to offer is non binding and offeror of such invitation can not be dragged to courtroom in charge of breach if he doesn’t give the good or service for what he made an invitation.
To bring more clarity, lets cite a real life example. During my entrance exam days, when I came out of my exam center, I received a template from a person that had all the details about their college and admission vacancies and also mentioned statements like – ‘ Hurry up! Secure your seat in our prestigious college’. Now if I visit their college to claim my seat on basis of that template and the college authorities refuses to give me admission due to any reason. I cannot take any legal action of breach against them as it was mere an invitation and not an offer. In this reference, the offer would have existed if upon my merit or other they would have contacted me personally to accept a seat they reserved for me. And now if I accept the admission and afterwards they revoke my admission then a case of breach of contract will be eligible to be filed. Thus, in offer, there lies a willingness and finality from the side of offeror but in invitation there exists no finality and final willingness to offer in mind of offeror is made up only after receiving various interested offerees and therefore offeror has the right to refuse to sell his good or service to anyone who came through the invitation of offer.
Harvey Vs. Facey clearly distinguishes between both as in that case where plaintiff enquired about lowest price and the interest of defendant to sell a hall pen. Defendant telegraphed the price and plaintiff affirmed to buy it at exact price but defendant refused to sell. The court held that mere response to an inquiry doesn’t constitute an implied contract as there was no finality.
Random people doing window shopping and asking the prices, auctions, commercial advertisements, etc. are not offers and are just invitations to offer that are non-binding to constitute a contract.
Catalogues or display of goods
The catalogues on shops and takeaways are mere a display of what all a person can offer at set prices. It helps people to decide that for which good they would like to negotiate and to further ask for a final offer. In restaurant, waiter offering us menu card with display of dishes is just an invitation to ask for a final offer of desired dish. Thus, this transmission of menus and catalogues doesn’t amount to an offer of supplying everything mentioned and this applies to even practice of self-serving.
Announcement to hold auction.
When an auction is announced it is also an invitation to buy a specific good. Therefore, if the owner of good decides to cancel the auction, it cannot amount to any breach as no offer was existing. Also, the price reserved by the owner can be amended as it his true discretion to do so until a final offer is made to a party. For ex. There is an auction of paintings of a renowned painter and he feels that he got better paying candidates then he expected than he can elevate the prices and those who find this invitation still affordable can participate but else cannot take any legal action. Lastly, one of the greatest myth is that after bidding the offeror is bound to give a final offer and make contract only with the highest bidder. However, like other invitations, the offeror can still refuse to sell his good to highest bidder if he finds anything inappropriate about him like criminal charges, cases of non-repayment, etc. or even simply on his discretion. He can sell it to anyone with low bid or can choose to not sell to anyone.
Free distribution of good
During festivals or any occasions or even in every other day, if a person distributes free gifts then this give and take of goods cannot be considered as contract as anything free of cost isn’t recognized in contract law. For example if jewelry shop owner on opening ceremony is distributing gold coins to its customers but later customers find them to be of silver, they cannot claim any legal action as it was mere a gift and it was free and didn’t consisted any offer or invitation.
On the basis of all abovementioned, it can be concluded that offer is a binding stage to execute a contract but invitation to offer is just a step(with no legal bindings) to reach that stage. And invitation to offer is public and can be given to many but offer is something private that is only between interested and willing parties.
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