Invitation to Offer: Definition, Principles, and Key Cases

Introduction

An invitation to offer (often called an invitation to treat) is a preliminary communication in contract law. It signals a willingness to receive offers, rather than an intention to be bound by stated terms. The classic examples are advertisements, shop displays, catalogues, and calls for bids at auctions. In each case, the law treats the communication as an invitation for others to make offers. Only when a clear offer is accepted does a binding contract arise.

This guide sets out the difference between an invitation to offer and an offer, how the courts assess intention using an objective test, and how the rules apply to adverts, shop shelves, price lists, auctions, and tendering. It also draws on leading cases such as Partridge, Fisher, Boots, Grainger, Spencer v Harding, Blackpool & Fylde, Harvela, Gibson, and Storer.

What You’ll Learn

• What an invitation to offer is and how it differs from an offer
• The objective test the courts use to assess intention to be bound
• How the rules apply to advertisements, shop displays, price lists, and auctions
• The general rule on invitations to tender and recognised exceptions
• The role of wording such as “subject to contract” or “may be prepared to”
• How acceptance turns an offer (not an invitation) into a contract
• Practical drafting and compliance tips for sellers, advertisers, tendering authorities, and bidders

Core Concepts

Invitation to Offer vs Offer: the objective test

• Offer: A clear promise to be bound on specific terms if accepted. Acceptance of such an offer creates a contract.
• Invitation to offer: A step before an offer. It invites others to submit offers but does not, by itself, create any obligation.

Courts apply an objective test, asking what a reasonable person would understand from the words and conduct used, taken in context. Phrases like “may be prepared to sell” point to an invitation to treat, while clear, definite language that signals immediate commitment is more likely to be an offer.

Key cases:

• In Gibson v Manchester City Council [1979] 1 WLR 294, “may be prepared to sell” was held to be an invitation to treat.
• In Storer v Manchester City Council [1974] 1 WLR 1403, clear, definitive wording was treated as an offer capable of acceptance.

Common settings: adverts, displays, price lists, and auctions

• Advertisements: Usually invitations to offer, so the advertiser is not bound to sell to every person who responds. See Partridge v Crittenden [1968] 1 WLR 1204.
• Shop displays: Goods on shelves or in windows with price tags are invitations to treat. Customers make an offer at the till; the retailer accepts or rejects. See Fisher v Bell [1961] QB 394 and Pharmaceutical Society of Great Britain v Boots Cash Chemists (Southern) Ltd [1953] 1 QB 401.
• Price lists and catalogues: Typically invitations to treat. See Grainger & Son v Gough [1896] AC 325.
• Auctions: The auctioneer’s invitation to bid is an invitation to offer. Each bid is an offer; acceptance occurs when the hammer falls.

Invitations to tender: general rule and recognised exceptions

• General rule: An invitation to tender is an invitation to offer. The party inviting bids is usually free to accept any bid or none at all. See Spencer v Harding (1870) LR 5 CP 561.
• Exception 1: Implied process contract to consider qualifying bids. In Blackpool & Fylde Aero Club Ltd v Blackpool BC [1990] 3 All ER 25, an implied unilateral contract arose to consider all tenders submitted on time.
• Exception 2: “We will accept the highest offer” wording. In Harvela Investments v Royal Trust [1986] AC 207, an invitation stating that the highest bid would be accepted was treated as an offer of a unilateral contract. Referential bids were invalid because they undermine sealed bidding.

Acceptance and the transition to contract

Acceptance must mirror a valid offer. If a communication is merely an invitation to offer, the other party’s response is an offer, not an acceptance. A binding contract forms only when that offer is clearly accepted on its terms. Counter-offers or materially changed terms do not amount to acceptance and will usually terminate the original offer.

Key Examples or Case Studies

Partridge v Crittenden [1968] 1 WLR 1204

• Context: Advertisement offering birds for sale.
• Ruling: The advert was an invitation to treat, not an offer.
• Takeaway: Adverts usually invite offers; they do not bind the advertiser to supply to all respondents.

Fisher v Bell [1961] QB 394

• Context: Flick knife displayed in a shop window with a price tag.
• Ruling: The display was an invitation to treat.
• Takeaway: Price tags and displays are invitations to offer; the shopkeeper can accept or refuse at the point of sale.

Pharmaceutical Society v Boots Cash Chemists [1953] 1 QB 401

• Context: Self-service sale of medicines.
• Ruling: The display was an invitation to treat; the customer’s offer is made at the till, where acceptance occurs.
• Takeaway: In self-service shops, acceptance happens at the checkout, allowing the retailer control over the sale.

Grainger & Son v Gough [1896] AC 325

• Context: Circulation of a wine price list.
• Ruling: A price list is an invitation to treat, not a standing offer.
• Takeaway: Price lists invite customers to make offers that the seller may accept or reject.

Spencer v Harding (1870) LR 5 CP 561

• Context: Circular inviting tenders.
• Ruling: An invitation to tender is generally an invitation to treat; no obligation to accept the highest or any bid.
• Takeaway: The inviting party typically retains freedom to choose or decline bids.

Blackpool & Fylde Aero Club Ltd v Blackpool BC [1990] 3 All ER 25

• Context: Local authority invited tenders with a clear procedure and deadline; a timely tender was not considered due to a clerical error.
• Ruling: There was an implied unilateral contract to consider all tenders submitted on time.
• Takeaway: Clear tender procedures and selective invitations can create a binding obligation to consider timely bids.

Harvela Investments v Royal Trust [1986] AC 207

• Context: Invitation stated the highest offer would be accepted; a referential bid was submitted.
• Ruling: The invitation amounted to an offer of a unilateral contract; referential bids were invalid.
• Takeaway: “Highest offer” invitations can bind the inviter; sealed bids must be fixed, not referential.

Gibson v Manchester City Council [1979] 1 WLR 294

• Context: Council letter said it “may be prepared to sell.”
• Ruling: Not an offer; only an invitation to treat.
• Takeaway: Cautious wording signals no immediate commitment.

Storer v Manchester City Council [1974] 1 WLR 1403

• Context: Council communication with clear, definitive terms for sale.
• Ruling: An offer existed and had been accepted.
• Takeaway: Clear, firm language pointed to a binding offer, unlike Gibson.

Practical Applications

• For retailers and e-commerce:

  • Treat listings and displays as invitations to treat; acceptance should occur at checkout/dispatch.
  • Use clear terms: “Your order is an offer; we accept when we dispatch” to reduce disputes.
  • Add “subject to availability” and pricing error clauses to manage stock and mispricing risk.
  • Train staff to recognise when to accept or refuse offers at the till or order review stage.

• For advertisers:

  • Avoid wording that looks like a promise to supply to everyone who responds.
  • Use cautious language and limit commitments in promotional materials.
  • If running limited promotions, state clear limits and conditions.

• For auctioneers and bidders:

  • Remember that the call for bids is an invitation to offer; acceptance happens when the hammer falls.
  • Publish auction terms to clarify reserve prices, bidder registration, and acceptance points.

• For tendering authorities:

  • If you want freedom to accept any bid or none, say so clearly and avoid wording that commits you to accept the highest bid.
  • Beware of situations like Blackpool & Fylde: selective invitations and formal procedures can imply a process contract to consider all timely bids. Set out the process and any discretion explicitly.
  • If you promise to accept the highest bid, be prepared for a binding process; exclude referential bids if needed (Harvela).
  • Keep records to show that all qualifying tenders were considered as required.

• For bidders and suppliers:

  • Submit tenders on time and in the requested form; if a timely bid is ignored, consider whether a Blackpool & Fylde-type process contract arose.
  • Where an invitation appears to promise acceptance of the highest offer, structure your bid as a fixed amount, not a referential uplift.
  • In negotiations, watch for “subject to contract” and provisional language, which suggests no offer yet.

• For anyone assessing formation:

  • Ask: Is there a clear intention to be bound now, on stated terms? If not, it is likely an invitation to treat.
  • Identify precisely when acceptance occurs, and by whom.
  • Watch for counter-offers and proposed changes—these do not amount to acceptance.

Summary Checklist

• Identify the communication: invitation to offer or offer?
• Apply the objective test: what would a reasonable person conclude from the wording and context?
• Adverts, shop displays, and price lists: usually invitations to treat (Partridge, Fisher, Boots, Grainger).
• Auctions: bids are offers; acceptance when the hammer falls.
• Tenders: generally invitations to treat (Spencer v Harding), but:
  • Clear procedures plus selective invitations may imply a duty to consider timely bids (Blackpool & Fylde).
  • “We will accept the highest offer” can create a unilateral contract; no referential bids (Harvela).
• Wording matters: “may be prepared to sell” (Gibson) vs clear commitment (Storer).
• Contract forms only when a valid offer is accepted without change to its terms.

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