Invitation to Treat

Introduction

An invitation to treat is a preliminary step in contract formation. It is a signal that someone is willing to receive offers, but it is not itself an offer that can be accepted to form a binding agreement. The distinction matters because only an offer, once accepted, creates a contract.

Courts assess these issues objectively: what would a reasonable person understand from the words and conduct used? Language, commercial context, and the structure of the transaction all matter. Common examples of invitations to treat include price lists, shop displays, most advertisements, and invitations to tender. There are, however, clear exceptions where the wording shows an immediate commitment to be bound, such as reward notices and certain auction or tender scenarios.

What You'll Learn

• The legal meaning of an invitation to treat and why it differs from an offer
• How courts apply the objective test to words and conduct
• The general rule for advertisements, price lists, and shop displays
• How tenders and auctions work, including “reserve” and “without reserve” sales
• When a statement becomes a unilateral offer (e.g., reward cases)
• The practical consequences of classifying a statement one way or the other
• Key cases to cite in exams and practice, and drafting tips to avoid disputes

Core Concepts

What is an Invitation to Treat?

• It is a communication that invites others to make offers.
• It does not show an intention to be immediately bound upon acceptance.
• If a customer responds, their response is the offer; the inviter can accept or reject it.

Why it matters:

• It gives the seller or issuer flexibility to check stock, vet buyers, and correct errors before being bound.
• It prevents unlimited liability from mass responses to a single announcement or listing.

The Objective Approach and Wording

• The law uses an objective test: would a reasonable person view the words and conduct as showing commitment to be bound upon acceptance?
• Vague or provisional language points to an invitation to treat. Clear, definite language points to an offer.
• Example: “May be prepared to sell” was too tentative and not an offer in Gibson v Manchester City Council [1979] 1 WLR 294.
• A reply giving the “lowest price” is usually not an offer (see Harvey v Facey [1893] AC 552).

Advertisements and Price Lists

General rule:

• Advertisements are usually invitations to treat, not offers.
• Price lists, catalogues, and menus are the same: they invite customers to make offers.
• Leading cases: Partridge v Crittenden [1968] 1 WLR 1204; Grainger & Son v Gough [1896] AC 325 (HL).

Why?

• An advert to the world cannot safely commit the seller to supply unlimited quantities to all respondents at once.

Exception — unilateral offers:

• If an advert contains a clear promise to be bound by anyone who performs specified conditions, it can be an offer (e.g., Carlill v Carbolic Smoke Ball Co [1893] 1 QB 256).

Practical drafting:

• Phrases like “subject to availability”, “subject to contract”, and “invitation for offers only” help preserve the invitation-to-treat status.

Shop Displays, Self‑Service, and Websites

• Displaying goods in a shop window or on shelves is an invitation to treat (Fisher v Bell [1961] 1 QB 394; Pharmaceutical Society v Boots [1953] 1 QB 401).
• In self‑service stores, the customer’s act of presenting goods at the till is the offer; the cashier’s decision to accept completes the contract.
• This structure lets retailers refuse sales (e.g., age-restricted items) and correct pricing errors.
• Online listings typically operate the same way. An order placed on a website is usually the customer’s offer; the retailer accepts on dispatch confirmation (subject to the site’s terms).

Auctions

• At a standard auction, each bid is an offer. Acceptance occurs when the hammer falls (Sale of Goods Act 1979, s.57; Payne v Cave (1789) 3 TR 148).
• Advertising an auction is normally an invitation to treat.
• Auctions with reserve: the auctioneer need not accept a bid below the reserve price.
• Auctions without reserve: inviting bids can create a unilateral promise to sell to the highest genuine bidder, leading to liability if the auctioneer refuses to sell (Barry v Davies [2000] 1 WLR 1962).

Tenders

General rule:

• A request for tenders is an invitation to treat; a submitted tender is an offer the inviter may accept or reject (Spencer v Harding (1870) LR 5 CP 561).

Process contracts and exceptions:

• The request may create a collateral obligation (a “process contract”) if it commits to consider compliant tenders submitted on time. Failure to consider can give rise to damages (Blackpool & Fylde Aero Club v Blackpool BC [1990] 3 All ER 25).
• If the request promises to accept the highest (or lowest) compliant bid, that can also bind the inviter when such a bid is made. Courts will give effect to clear process terms and may restrict referential bids (see Harvela Investments v Royal Trust Co of Canada [1986] AC 207).

Unilateral Contracts and Rewards

• A unilateral contract arises when a person promises to be bound if others perform a specified act, with no need for prior communication of acceptance.
• Classic example: a reward advert for returning lost property.
• Carlill v Carbolic Smoke Ball Co shows that a public promise with clear conditions and serious intent (evidenced by a bank deposit) can be an offer to the world, accepted by performance.

Why Classification Matters

• Acceptance: Only an offer can be accepted to form a contract. Misclassifying a statement can lead to claims of breach where none exists.
• Revocation: Offers may be revoked before acceptance; invitations to treat do not need revocation.
• Stock and pricing: Treating listings as invitations protects sellers from being bound to supply unlimited quantities or honour obvious errors.
• Procurement risk: Tender invitations can carry process duties. Poorly drafted requests can expose the issuer to challenges.

Key Examples or Case Studies

• Fisher v Bell [1961] 1 QB 394

  • Display of a flick knife in a shop window was an invitation to treat, not an offer to sell a prohibited item.
  • Lesson: Product displays generally invite offers; they are not immediate commitments to sell.

• Pharmaceutical Society of Great Britain v Boots Cash Chemists [1953] 1 QB 401

  • In a self‑service store, the customer makes the offer at the till; the cashier accepts.
  • Lesson: Retailers retain control over restricted sales and pricing at the point of acceptance.

• Partridge v Crittenden [1968] 1 WLR 1204

  • Newspaper advert for birds was an invitation to treat, not an offer.
  • Lesson: Most adverts are not offers, avoiding automatic liability to all respondents.

• Grainger & Son v Gough [1896] AC 325 (HL)

  • A price list was held to be an invitation to treat due to the risk of unlimited acceptances.
  • Lesson: Listing prices to the public is not a promise to supply any quantity demanded.

• Gibson v Manchester City Council [1979] 1 WLR 294

  • “May be prepared to sell” was too tentative to be an offer.
  • Lesson: Definite, certain language is required to amount to an offer.

• Spencer v Harding (1870) LR 5 CP 561

  • Invitation to tender was not an offer; tenders submitted were offers capable of acceptance.
  • Lesson: The default position in tendering preserves the buyer’s freedom to choose.

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

  • The council’s invitation created an obligation to consider all tenders submitted on time.
  • Lesson: Clear process promises can create enforceable duties even before contract award.

• Harvela Investments v Royal Trust Co of Canada [1986] AC 207

  • An invitation to submit fixed bids with a promise to accept the highest created a binding obligation to accept the highest compliant bid; referential bids were ineffective.
  • Lesson: Draft tender rules precisely; courts enforce the stated process.

• Payne v Cave (1789) 3 TR 148; Sale of Goods Act 1979, s.57

  • Bids are offers; acceptance occurs on the fall of the hammer; revocation is possible before acceptance.
  • Lesson: Standard auction mechanics align with offer-and-acceptance principles.

• Barry v Davies [2000] 1 WLR 1962

  • Auction “without reserve” created a binding promise to sell to the highest bidder.
  • Lesson: Without-reserve auctions can create liability if the highest genuine bid is refused.

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

  • An advert with a clear promise, defined conditions, and evidence of intent (bank deposit) was a unilateral offer accepted by performance.
  • Lesson: Reward-type announcements can be true offers.

Practical Applications

For everyday transactions

• Treat price labels, shelf displays, and online listings as invitations to treat unless terms clearly say otherwise. Use “subject to availability” and clear acceptance points (e.g., “we accept your order when we dispatch”).
• Train staff to understand that they can refuse offers at the till or online if there is, for example, an obvious misprice or a compliance issue.

For tendering and procurement

• If you want to retain discretion, say so: “This is an invitation to treat; we are not obliged to accept the lowest or any tender.”
• If you commit to a process (e.g., “we will consider all tenders received by the deadline”), ensure systems guarantee compliance with that promise to avoid claims.
• Draft rules on “highest/lowest bid” carefully. If you intend to accept the highest fixed bid, exclude referential bids to avoid disputes (as in Harvela).
• Keep an audit trail (issue, receipt, and opening logs) to prove timely handling.

For auctions

• State clearly whether the auction is with or without reserve.
• If “without reserve,” be aware of a potential obligation to sell to the highest genuine bidder.
• Publish terms of sale and stick to them.

For adverts and promotions

• Avoid definite wording that could be read as a promise to all respondents. Use clear conditions and availability limits.
• Reward notices intended to bind on performance should set out the conditions and any limits unambiguously.

For dispute-spotting and exams

• Identify the statement in question, classify it (offer vs invitation to treat), and justify using authority.
• Check for exceptions: unilateral offers, process contracts, auctions without reserve.
• Confirm whether acceptance occurred, and if so, when and how.

Summary Checklist

• Does the statement show an intention to be immediately bound on acceptance?
• If not, it is likely an invitation to treat (adverts, price lists, displays, tender invitations).
• Look for exceptions:
  • Reward-type adverts with clear terms (Carlill)
  • Auctions without reserve (Barry v Davies)
  • Tender requests promising to consider compliant bids (Blackpool & Fylde)
  • Requests promising to accept the highest/lowest compliant bid (Harvela)
• Apply the objective test: precise words and commercial setting matter (Gibson).
• Pin down the moment of acceptance and who made the offer (Boots; s.57 SGA 1979).
• Use clear drafting: “subject to availability/contract,” defined acceptance triggers, and explicit tender/auction rules.
• Cite the right cases for each scenario.

Quick Reference