Law Beat

Offer and Acceptance - Invitation to Treat

In the last part I covered the notion that to constitute a contract there must be an offer by one person to another and an acceptance of that offer by the person to whom it is made. The offer and acceptance must be communicated to the other.

In this part, I want to tackle the topic of Invitation to Treat. This is not a dinner invitation. An invitation to treat refers to a seller inviting others to make the seller an offer. A contract is only completed if and when the seller accepts the offer. If the seller does not accept the offer, there is no contract.

Let us look more closely at this notion.

1. Whether the seller's offer is an invitation to treat, or an actual offer, the acceptance of which concludes a binding contract is a question of fact to be looked at in all the circumstances of the situation. The classic example of an invitation to treat is that of an auction. In an auction, the seller says "I am selling this widget and the minimum bid must be $25." Here the seller is inviting individuals to make an offer with no commitment to accept any. Accordingly, no buyer can enforce his bid unless the seller actually accepts it. Generally speaking, even the highest bidder could not enforce his bid because of the nature of the seller's offer.

2. Until the seller accepts any offer, the person making the offer can always withdraw his offer. This is in line with general law of contract that states that until acceptance of an offer is communicated, the person making the offer may withdraw it.

3. Contrary to what you would think, goods offered to the general public in your normal general store or grocery is not an offer by the store. It is an invitation to treat or an invitation for buyers to come and make an offer to purchase. As such, if you visit your local Walmart to buy gloves and you present those gloves to the counter to pay for them, you can't force Walmart to take your money and sell the gloves to you. In this example, you are the person making the offer and the owners of Walmart still have to accept your offer. The display of goods in the store is simply an invitation to treat.

If you are ready, go ahead and test what you just learned by trying your hand at the following quiz. Don't forget to read the previous parts in the series since the questions build on what you previously learned.

In Part 4, we continue to explore the concepts of offer and acceptance in a little more detail.

The principles of law presented in these articles are based on Canadian law. However, the information provided by the Fraud Bureau in this Law Beat series is not legal advice nor conveyed in the course of an solicitor/attorney-client relationship, but is intended merely as general information related to common legal issues. Your access to this article is subject to the Terms of Use and Disclaimer. You are not to rely upon this article for the basis of any decision you wish to make. If you have specific legal problem or question, please contract your legal advisor for specific legal advice relating to your question or problem.