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Contract: Formation

Offer and invitation to treat

  • 3 things to know
  • A2 Units 3 and 4

Overview

Recall questions on advertisements, the reward and the deposited thousand pounds in Carlill, shop displays and self-service tills, a reply stating a price, and auctions without reserve.

What you need to know

Answer each one before you reveal it.

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Key term

Distinguish an offer from an invitation to treat.

Key term

What was the significance of the company depositing one thousand pounds with its bankers in Carlill v Carbolic Smoke Ball Co (1893)?

Key term

What did Fisher v Bell (1961) decide about goods displayed in a shop window?

Questions from this subtopic

Each one with the model answer underneath.

  1. 1

    Define an offer in the law of contract.

    Model answer

    An offer is a definite statement of terms by which the offeror indicates a willingness to be bound as soon as those terms are accepted by the person to whom the statement is addressed.

  2. 2

    Distinguish an offer from an invitation to treat.

    Model answer

    An offer can be turned into a binding contract by acceptance alone, whereas an invitation to treat is only an indication that a person is willing to receive proposals, which that person may then accept or refuse.

  3. 3

    What did Partridge v Crittenden (1968) decide about advertisements?

    Model answer

    It decided that a newspaper advertisement of goods for sale is normally an invitation to treat and not an offer, because the advertiser cannot be taken to promise to supply everyone who replies.

  4. 4

    What did Carlill v Carbolic Smoke Ball Co (1893) decide about advertising a reward?

    Model answer

    It decided that an advertisement promising a reward to anyone who used the product as directed and still caught influenza was a unilateral offer made to the whole world, which was accepted by performing the stated conditions.

  5. 5

    Why did the argument that Mrs Carlill had never communicated her acceptance fail?

    Model answer

    The court held that in a unilateral offer of this kind the offeror impliedly waives the need to notify acceptance, because performance of the conditions is itself the acceptance.

  6. 6

    What was the significance of the company depositing one thousand pounds with its bankers in Carlill v Carbolic Smoke Ball Co (1893)?

    Model answer

    The deposit showed that the promise was seriously meant rather than mere advertising puff, which established the intention to be legally bound.

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Roles v Nathan ( ).
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Pecuniary loss is financial and measurable.
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