Invitation to Deal

Introduction

An invitation to deal (often called an invitation to treat) is a step before any binding contract. It signals a willingness to receive offers, rather than a promise to be bound the moment someone accepts. Because an invitation to deal does not confer a power of acceptance, it cannot by itself form a contract. Instead, it invites the other party to make an offer, which the inviter may then accept or reject.

This distinction matters for everyday situations such as advertisements, shop displays, websites and price lists. Treating these communications as invitations to deal helps traders manage stock, comply with regulations, and choose with whom they contract.

What You'll Learn

• What an invitation to deal is, and how it differs from an offer
• Why advertisements, price lists and shop displays are usually invitations to deal
• When an advertisement can amount to a unilateral offer (e.g. Carbolic Smoke Ball)
• How courts assess intention objectively, not by private motives
• Key cases: Partridge v Crittenden, Fisher v Bell, Boots Cash Chemists, Grainger v Gough, Harvey v Facey, Smith v Hughes, Carlill v Carbolic Smoke Ball
• Practical drafting points for websites, in‑store practices and promotional campaigns
• How contracts form at tills and online checkouts

Core Concepts

Invitation to Deal vs Offer

• Invitation to deal:

  • A call for offers. It invites negotiation or further steps.
  • Does not grant a right to accept. No contract arises on a shopper’s or user’s “acceptance” alone.
  • Typical examples: advertisements, catalogues, price lists, goods displayed in shops.

• Offer:

  • A clear, final promise to be bound on acceptance.
  • Creates a power of acceptance. If the other party accepts, a binding contract forms (subject to usual rules on certainty, consideration and intention).

The practical question is whether a reasonable person would think the communicator intended to be bound immediately if the other party says “yes”. If the communicator is signalling, “Tell me if you’d like to buy, and I’ll decide,” that is an invitation to deal. If they are saying, “I will sell to you if you accept these terms,” that is an offer.

Price lists are a clear illustration: they usually invite orders rather than bind the seller to supply at that price to all comers, especially when stock is limited.

Advertisements and Shop Displays

English law generally treats advertisements and displays as invitations to deal. The reasoning is straightforward:

• Sellers retain control over whether to contract and to whom (e.g. age‑restricted goods).
• Stock can be managed without being exposed to unlimited claims.
• Retail processes (e.g. pharmacist oversight) can be respected.

Key applications:

• Shop window displays with price tags: invitation to deal, not offers.
• Self‑service shelves: the shopper makes an offer at the till; the cashier accepts (or refuses).
• General advertisements: usually not offers, even if the word “offer” is used in the marketing copy.

Terms such as “subject to availability,” “we may refuse any order,” and “contract forms on dispatch” reflect this position and help avoid disputes over mispricing or out‑of‑stock items.

Unilateral Offers: The Exception

A public communication can be an offer if it promises something in return for a specified act and shows an intention to be bound by that promise. This is the unilateral offer exception.

The classic example is a reward advertisement where acceptance occurs through performance of the specified act rather than a prior notification of acceptance. Where:

• The promise is clear,
• Conditions for performance are precise, and
• The communicator shows seriousness (e.g. funds set aside), an advertisement may be treated as an offer to the world, binding upon performance.

This is unusual and turns on the facts. Most general advertisements remain invitations to deal.

Intention and the Objective Test

Courts assess communications by the objective test: what would a reasonable person infer from the words and conduct in context? The parties’ private motives do not decide the matter.

Two points flow from this:

• A reply stating a minimum price, or providing information on terms, is not necessarily an offer. It may merely be a response to a request for information.
• The label the advertiser uses (“offer”, “special offer”) is not decisive. The court looks at the substance and the commercial context.

Key Examples or Case Studies

Partridge v Crittenden [1968] 1 WLR 1204

• An advertisement for birds led to a prosecution for “offering for sale.”
• Held: the ad was an invitation to deal, not an offer. Treating ads as offers would risk binding sellers to supply far beyond their capacity.

Fisher v Bell [1961] 1 QB 394

• A flick knife was displayed in a shop window with a price tag. The shopkeeper was charged with “offering for sale.”
• Held: display of goods is an invitation to deal. No “offer” had been made within the meaning of the statute.

Pharmaceutical Society of Great Britain v Boots Cash Chemists (Southern) Ltd [1953] 1 QB 401

• Self‑service store layout: customers selected items from shelves and paid at the till.
• Held: the display was an invitation to deal. The customer made the offer at the till; the cashier accepted. This allowed supervision for medicines at the point of sale.

Grainger & Son v Gough [1896] AC 325

• Wine merchants’ price lists sent to customers.
• Held: a price list is typically an invitation to deal, not an offer, due to limited stock and the need to choose whom to supply.

Carlill v Carbolic Smoke Ball Co [1893] 1 QB 256

• The company advertised a reward for anyone who used the product as instructed and still contracted influenza, noting money had been set aside.
• Held: a unilateral offer to the world. Acceptance occurred by performing the specified act; the deposit of funds showed an intention to be bound.

Harvey v Facey [1893] AC 552

• “Lowest price” statement in a telegram exchange.
• Held: this was a supply of information, not an offer capable of acceptance.

Smith v Hughes (1871) LR 6 QB 597

• Dispute over old vs new oats and what was “understood.”
• Held: the objective approach applies. What matters is how a reasonable person would interpret the words and conduct, not private intentions.

Practical Applications

• For retailers

  • Treat shelf displays and window displays as invitations to deal.
  • Train staff that the contract forms when the till operator accepts the customer’s offer.
  • Use clear signage and compliance checks for age‑restricted or regulated products.

• For e‑commerce teams

  • State that product pages are invitations to deal and that orders are offers subject to acceptance.
  • Define when acceptance occurs (e.g. on dispatch, not on order confirmation).
  • Include “subject to availability” and pricing‑error clauses; reserve the right to refuse orders.

• For marketing and promotions

  • Avoid language suggesting immediate commitment where stock is limited.
  • If running a reward‑style promotion, set precise conditions, limits, timeframes and verification steps. Cap liability and set clear eligibility rules.

• For tenders and auctions (briefly)

  • Invitations to tender are generally invitations to deal; tenders submitted are offers.
  • In auctions with reserve, bids are offers; the fall of the hammer is acceptance.
  • If different legal effects are intended (e.g. no‑reserve auction), say so clearly.

• For students and trainees

  • Ask: Is there a clear promise to be bound on acceptance, or is the communication calling for offers?
  • Identify the moment of contract formation: at the till, on dispatch, or upon performance (unilateral).
  • Apply the objective test to the words and context of the communication.

Summary Checklist

• Invitation to deal invites offers; it does not create a power of acceptance.
• Offers are clear promises to be bound if accepted.
• Advertisements, displays and price lists are usually invitations to deal.
• Self‑service shopping: offer at the till; acceptance by the cashier.
• Unilateral offer exception: clear promise to the world, acceptance by performance (e.g. Carlill).
• Objective test applies: focus on what a reasonable person would infer.
• Use clear online terms: contract forms on acceptance/dispatch; subject to availability; mispricing clauses.
• Keep promotional terms precise and limited to avoid unintended commitments.

Quick Reference