The difference between an offer and invitation to treat in contracts is important because this is one of those small parts of a legally biding agreement that lets you know if you even have an agreement that can hold in court of law or not.
Imagine receiving an email from a client saying they are looking for laptops, assuming you are dealing in laptops, and you ask them what specs they are interested in and they give you all the details.
So you go ahead and send them the cost of how much such will cost and even add that you will deliver them the laptops at no cost. Does this mean you have deal? Or does it mean the customer just wanted information? Could it be possible that the client just wanted to put you in a position where you will have to make them an offer to sell, basically inviting you to make them an offer.
What is an offer?
An offer is simply an expression of willingness to contract on definite terms if those terms are accepted. Meaning you are giving the other party assurance that you want to get in a contract with them if they accept the terms that you will propose or that you have proposed.
Offers can be classified as:
- Conditional offers
- Cross offers
- Counter offers
- Single and standing offers
All of which you can see on this lesson if you are interested
What is invitation to treat?
In this case you are not making an offer it could be that you are acting in a manner that puts the other party in a position to feel as though you are making them an offer when in reality you are just treating them. There is no expression of willingness to contract, at least not in a manner that can be actionable.
Think of going to a super market to shop. What you end up seeing are items with price tags attached to them. What does this mean? Is the supermarket selling you these items? It certainly looks that way. The truth, well the legal truth, is far from that. What the supermarket is doing is inviting you to make them an offer to buy the items placed on the isle and then they can decide if to accept your offer or not. They are simply inviting you to treat.
Conclusion
The difference between an offer and invitation to treat in contracts matters a lot because when you accept an offer you have an agreement that is actionable and that can be enough to create legal liability should a party end up acting as a result of that agreement. Invitation to treat on the other hand will be treated as a social or custom in business or the given context, but it will not be actionable. The same way the supermarket is not under any mandate to sell you their products because they actually never made you an offer to sell, all they did was invite you to come see what they have and you get to decide if you want to buy or not.
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