2 In relation to contract law explain the meaning and effect of:
(a) an offer; (4 marks)
(b) an invitation to treat. (6 marks)
(10 marks)

2 (a) Offer
An offer sets out the terms upon which an individual is willing to enter into a binding contractual relationship with another
person. It is a promise to be bound on particular terms, which is capable of acceptance. The essential factor to emphasise
about an offer is that it may, through acceptance by the offeree, result in a legally enforceable contract. The person who makes
the offer is the offeror; the person who receives the offer is the offeree.
Offers, once accepted, may be legally enforced but not all statements will amount to an offer. It is important, therefore, to be
able to distinguish what the law will treat as an offer from other statements which will not form the basis of an enforceable
contract. An offer must be capable of acceptance. It must therefore not be too vague (Scammel v Ouston (1941)). In Carlill
v Carbolic Smoke Ball Co (1893) it was held that an offer could be made to the whole world and could be accepted and
made binding through the conduct of the offeree.
In addition an offer should be distinguished, from the following:
(i) A mere statement of intention – Such a statement cannot form the basis of a contract even although the party to whom
it was made acts on it (Re Fickus (1900)).
(ii) A mere supply of information – As in Harvey v Facey (1893) where it was held that the defendant’s telegram, in which
he stated a minimum price he would accept for property, was simply a statement of information, and was not an offer
capable of being accepted by the plaintiff.
(b) Invitation to treat
Invitations to treat are distinct from offers in that rather than being offers to others, they are in fact invitations to others to
make offers. The person to whom the invitation to treat is made becomes the actual offeror, and the maker of the invitation
becomes the offeree. An essential consequence of this distinction is that, in line with the ordinary rules of offer and
acceptance, the person extending the invitation to treat is not bound to accept any offers subsequently made to them.
The following are examples of common situations involving invitations to treat:
(i) the display of goods in a shop window – The classic case in this area is Fisher v Bell (1961) in which a shopkeeper
was prosecuted for offering offensive weapons for sale, by having flick-knives on display in his window. It was held that
the shopkeeper was not guilty as the display in the shop window was not an offer for sale but only an invitation to treat.
(ii) the display of goods on the shelf of a self-service shop – In this instance the exemplary case is Pharmaceutical Society
of Great Britain v Boots Cash Chemists (1953). The defendants were charged with breaking a law which provided that
certain drugs could only be sold under the supervision of a qualified pharmacist. They had placed the drugs on open
display in their self-service store and, although a qualified person was stationed at the cash desk, it was alleged that the
contract of sale had been formed when the customer removed the goods from the shelf. It was held that Boots were not
guilty. The display of goods on the shelf was only an invitation to treat. In law, the customer offered to buy the goods at
the cash desk where the pharmacist was stationed.
(iii) a public advertisement – Once again this does not amount to an offer. This can be seen from Partridge v Crittenden
(1968) in which a person was charged with ‘offering’ a wild bird for sale contrary to the Protection of Birds Act 1954,
after he had placed an advert relating to the sale of such birds in a magazine. It was held that he could not be guilty of
offering the bird for sale as the advert amounted to no more than an invitation to treat.
(iv) a share prospectus – Contrary to common understanding such a document is not an offer. It is merely an invitation to
treat, inviting people to make offers to subscribe for shares in a company.

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