Difference Between Offer and Invitation to Offer
1. Definition of Offer:
An offer is a definite proposal made by one party (the offeror) to another (the offeree) with the intention that it shall become binding on acceptance.
Key Features:
Intention to create legal relations: The offeror intends to be legally bound if the offer is accepted.
Definiteness: The terms of the offer must be clear and certain.
Communication: Must be communicated to the offeree.
Acceptance: The offeree can accept it to create a binding contract.
Example:
Mr. A says to Mr. B: “I will sell you my car for ₹2,00,000.”
This is an offer because it is definite and shows intent to create a legal contract.
2. Definition of Invitation to Offer (Invitation to Treat):
An invitation to offer is a mere invitation to others to make an offer. It is not an offer and cannot be directly accepted to form a contract.
Key Features:
No intention to create legal relations immediately: The party making it is not bound to accept any offer.
Encourages others to negotiate or make offers.
Acceptance does not create a contract: Only an offer followed by acceptance forms a contract.
Example:
Goods displayed in a shop window or price lists in catalogues.
The seller is inviting customers to make offers, which the seller can then accept or reject.
3. Key Differences Between Offer and Invitation to Offer:
| Aspect | Offer | Invitation to Offer |
|---|---|---|
| Definition | A definite proposal with intention to create legal relations. | A preliminary communication inviting others to make an offer. |
| Intention | Intends to be legally bound on acceptance. | No intention to be bound immediately. |
| Result of Acceptance | Acceptance creates a binding contract. | Acceptance does not create a contract; it is an offer itself. |
| Example | “I will sell my bike for ₹50,000.” | “Bikes for sale at ₹50,000 each” (displayed in a shop). |
| Certainty | Terms are definite and certain. | Terms are usually general; negotiation may follow. |
4. Important Case Laws:
Pharmaceutical Society of Great Britain v Boots Cash Chemists (1953)
Goods on the shelves are an invitation to offer, not an offer.
Fisher v Bell (1961)
Display of goods with a price tag in a shop is an invitation to treat, not an offer.
Carlill v Carbolic Smoke Ball Co. (1893)
Unlike shop display, the promise to pay £100 for using the smoke ball was a valid offer because it showed clear intent to be legally bound.
✅ Summary:
Offer = definite proposal → acceptance = contract
Invitation to offer = request for proposal → acceptance = still an offer
RELATED Blog
0 comments