Offer and invitation to treat

An invitation to treat is to be distinguished from an offer as it merely indicates a willingness to deal but does not display an intention to be bound.
There are several categories of invitation to treat :
•Pre-contractual negotiations
•Shop displays
•Advertisements
Of the above categories the latter two are standard situations and due to the need for certainty the court will generally apply the rule that they are invitations to treat regardless of the intentions of the parties. e.g.
Fisher v Bell ( display in shop window )
Pharmaceutical Society of GB v Boots Cash Chemists ( self-service store )
Partridge v Crittenden ( advert in newspaper )
N.B. sometimes the court will even in the case of displays or adverts find that an offer has been made e.g. Chapeltown v Barry ( deckchairs ), Carlill v Carbolic Smokeball Company (offer to the world which constitutes a unilateral contract )

Pharmaceutical Society of Great Britain v Boots [1952] 2 QB 795
Boots were prosecuted for selling drugs without the presence of a qualified pharmacist. The customer, on entering the store was given a basket and, having selected which articles he/she wanted, would place them in a basket and take them to the cash desk. Near the desk was a registered pharmacist. The Pharmacy and Poisons Act 1933 made it unlawful to sell any listed poison unless the sale was effected under the supervision of a registered pharmacist. The Plaintiffs alleged that the display of goods amounted to an offer which was accepted when the customer put the drugs in to the basket : hence if the drugs in question were poisons then the 'sale' took place before the pharmacist could intervene.
The Queens Bench and the CA rejected this argument. This was because the courts' analysed the situation as follows : the offer to buy came from the customer when the article was put in the basket - this offer the defendants remained free to accept or reject. If they did accept, then this took place at the cash desk in the presence of a registered pharmacist and hence there was no breach of the Act.

Fisher v Bell [1961] 1 QB 394
The defendant shopkeeper was prosecuted for offering flick knives for sale contrary to statute. The defendant was acquitted when the court accepted that the display in the shop window was merely an invitation to treat.

Partridge v Crittenden [1968] 1 WLR 1204
The Protection of Birds Act 1954 made it an offence to "offer for sale a wild live bird". The defendant had placed an advertisement in the journal 'Cage and Aviary Birds' with the words "Bramble finch cocks and hens 25 shillings each". He did not use the words "offer for sale" - He was charged with offering for sale a wild bird, contrary to the 1954 Act.
At first instance he was convicted but on appeal his conviction was quashed. The reason being that there had been no offer for sale as his advertisment was only an invitation to treat.

Carlill v. Carbolic Smoke Ball Co. [1892] 2 QB 484
The defendant Smoke Ball Co. patented a medical preparation called 'The Carbolic Smoke Ball' and advertised the product, declaring that they would pay £100 to anyone who succumbed to influenza after having used their product in the manner specified by the manufacturers. They added that £1,000 had been deposited with their bankers as a sign of their sincerity. The plaintiff, on the strength of the advert, bought a smokeball, caught influenza and thus sued the manufacturers for the £100.
One of the arguments used by counsel for the defendant manufacturers was that there would be no binding agreement because the manufacturers had by their wording, purported to make their offer to the whole world and that, as you cannot contract with everybody, the plaintiff was not capable of accepting this invalid offer.
The Court of Appeal rejected this argument. The defendant's advert did amount to an offer to the whole world but it only matured into a contract when someone performed the condition required in the offer. Consequently, although the offer was made to the whole world, the contact is made with that limited section of the public who come forward and perform the condition requested.
The plaintiff who had performed the condition ( thereby accepting the offer and providing the necessary consideration ) could thus enforce the unilateral contract constituted by the advert and won her case and the £100 claimed.
Note : The defendant company also argued that the promise to pay £100 to any purchaser who bought the smokeball was a mere puff ( i.e. an advertising device devoid of any intention to create legal relations, at most a promise in honour only ) and not therefore legally binding.
The Court of Appeal dismissed this argument pointing to the £1,000 stated to be deposited with the defendant's bankers as proof of the defendant's intention to be legally bound.
What is not clear is what would have been the case had the company not made the statement about the £1,000. It is suggested that to hold every manufacturer legally responsible for the contents of every flamboyant claim made with a view to selling a product is to invite an avalanche of suits and actions against such producers which the courts are less than keen to promote given the current overcrowding of the courts.


Pre-contractual negotiations exist where parties are in discussion with each other but neither has sufficient intention to be bound so as to make their representations to each other capable of being an offer.
A statement forming part of pre-contractual negotiations is a form of invitation to treat.
It is the court which has to determine whether there is an offer capable of being accepted and this will require an investigation of all the circumstances by the court as in Gibson v Manchester City Council. The court thus has a wide discretion over the issue.
N.B. Due to the need for commercial certainty the court will be reluctant to engage in an investigation of the intention of the parties in standard form transactions where there is no real negotiation e.g. displays of goods for purchase and advertisements. The presumption in such cases is to view them as invitations to treat unless there is strong evidence to the contrary : see Carlill v. Carbolic Smoke Ball Co. [1892] 2 QB 484

Gibson v Manchester City Council [1979] 1 WLR 294
In November 1970, Manchester City Council (MCC) (then led by the Conservatives) sent out brochures outlining their scheme to sell council houses. If recipients of the brochures wanted further information they were to return a form attached to the brochure. Mr Gibson did precisely this. Afterwards he received an application form and a letter on February 16th 1971 stating that MCC may be willing to sell him a council house at a price of £2,180. The letter asked Mr Gibson to make a formal application on the form provided - which he did. In May 1971, the council changed hands and Labour came to power and promptly reversed the policy of selling council houses, only completing those deals in which an exchange of contracts had taken place. Mr Gibson was told that as his transaction had not reached the stage of exchanging contracts, the council was no longer prepared to sell him a council house; Mr Gibson tried to argue that they were bound to sell on the grounds that the letter of Feb 16th, 1971 from the Council constituted an offer which he had accepted when he completed the formal application.
The case went to the HOL - where it was held that no binding contract had come into existence. The most that could be said about the council's letter of Feb 16th was that it represented part of the negotiations where the parties were feeling their way towards an agreement. It lacked the unequivocal nature of a true offer.


Invitation to Treat
The general rule is that an invitation to tender for a contract constitutes an invitation to treat and that any tenders made by suppliers in response to such an invitation constitute offers which may be accepted or rejected and not acceptances which would lead to a binding contract in respect of each of the tenders.
Sometimes however the court will analyse the situation as involving not only the invitation to tender but also a separate unilateral contract which the party making the tender accepts by the act of tendering and which therefore forms a binding contract in respect of the subject matter of that unilateral contract : Blackpool & Flyde Aero Club Ltd v Blackpool Borough Council ( unilateral contract that council would consider all tenders submitted on time ).
Occasionally as a matter of policy the courts will construe a tender as in fact being simply an offer: Harvela Investments Ltd v Royal Trust Co of Canada ( referential bid not open for acceptance as "invitation to tender"already accepted by highest cash bid ).