QUESTION NUMBER ONE 2
1.1 LINGUISTIC MEANING 2
JURISTICALLY MEANING 2
1.3 INVITATION TO TREAT OR INVITATION TO BUY 3
1.4 FORMULA 3
1.5 KINDS OF INVITATIONS TO TREAT 3
QUESTION NUMBER TWO 4
2.1 DANNY Vs MOHAN 4
BOOK REFERENCES 5
OFFER Vs. INVITIATION TO TREAT
QUESTION NUMBER ONE
“An offer is not the same as an invitation to treat, although the two are often confused”
1.1 LINGUISTIC MEANING
Even though these two things are often confused, they are a lot very different one from another. To explain this situation, we must start from the linguistic explanation, starting with a simple example: “I offer you one dollar for that article” different to say “I invite you to offer one dollar for my article, then I´ll sell it to you without a doubt” in that case you are the one who decide if you are going to offer or not, but so far than that, you are the one who decide if you offer a dollar or less. In this order of ideas, both expressions are so much different from one to another. But for sure, in real life it is deeper much difficult than a simple example like it. The difference is deeper in what you want people to understand you or what you want to express them.
Offer is an action that comes from you when you want something from others, but invite to treat is an action that comes from others when you want to. It is important to notice that you must demonstrate that you want to I mean: you want other people to do something you want, so you must let them know you want that that thing you do, what ever it is.. is exactly the invitation to treat.
So both are actions that comes from you, the first one is a direct action from you to have something from others (you are the one who decide), the second action comes from you but with a low difference about asking for an other action from others to treat something (other decide if accept or not your invitation).
Now in a juristically point of view, both expression are as different as we already did in the linguistic explanation. We can find issues to understand this, in contract acts like LAWS OF MALASYA act 136, or other contracts acts in European countries or in U.S.A, where law is made out of usage (common law). But if you want to find something about offer and invitation to treat in countries a Little more legalist like in South America, you must look for civilian law.
Talking about common law for this case, according to contract acts, an invitation to treat is:
“An expression of willingness to negotiate. A person making an invitation to treat does not intend to be bound as soon as it is accepted by the person to whom the statement is addressed”
This is so important for legal business, talking about advertising, because when you advertise something you want to sell, you are inviting other people to treat. How ever, this invitation is just “an invitation” that means that people who see this invitation can decide to buy or not. So in the right moment people decide to buy, there is the born of a new contract that brings some legal issues about non completion; other wise that invitation to treat cant make an offer, because that would be kind of different just because it changes the entire meaning of that invitation, becoming into a direct offer, this means that if somebody accepts that offer there is an automatic legal contract with its legal issues. We are going to see both cases with some examples:
1.3 INVITATION TO TREAT OR INVITATION TO BUY
The formula to understand in an easier way this mess is the next one:
1.5 KINDS OF INVITATIONS TO TREAT
There are three kinds of invitations to treat or invitations to buy:
ADVERTISEMENT: As we just said before, they are like saying you and showing you great images that tempt you to get that product, but their can´t be considered as offers, because the one who decides if spend the money there is just the one who sees the advisement, Partridge v Crittenden 1968.
EXHIBITION OF GOODS FOR SALE: Is held as an invitation to treat or an invitation to buy because the offeror shows the products to people, like saying, hey I am selling these great things!. It is an ordinary way to invite people to buy, Fisher v Bell (1961) 1 QB 394
AUCTIONS SALES: These are situations where offers or invitations to treat get more confused because of its essence, where everybody makes offers to the auctioneer who invites to treat, Payne v Cave (1789) 3 TR 148; or where the auctioneer makes an offer that the rest of the people can accept or not Barry v Davies (2000) 1 WLR 1962.
There is another kind of invitation to treat, that I think is not so relevant, but many people consider as a very important one; it is about tenders, to submit a prior request, like when you want to buy a house and the real state dealer shows you tenders about it These are considered as invitations to treat, but I think they are offers that you can accept or not. Well is just a personal point of view.
QUESTION NUMBER TWO
The next case is about a typical situation where there are people trying to negotiate a car.. Let’s see if you get the difference between the offer and the invitation to treat:
“Mohan advertised his car for sale for $5.000 in the news paper. Danny saw the advertisement and telephoned Mohan offering him $4.500 for the car. Mohan eventually offered to sell Danny the car for $4.800 and Danny said that he would need to test drive the car before he could agree on such a price. They agreed on a place and time for the test drive. However, before this could take place, Mohan sold the car to Julian for $4.900.”
2.1 DANNY Vs MOHAN
In this case, we can find a situation where you can get kind of confused about offering and invitation to treat, so the question is: is Mohan committing a mistake when he decided to sell the car to Julian even though he received an offer from Danny??, well, until now, we haven´t talked about counter offer or accepted offer. And what does Danny have to do to get his offer accepted?? Does he have to sue??
Even when there is a counter offer from Mohan to sell the car to Danny for $4.800, after an offer from Danny; there is not an obligation from Mohan to sell the car to Danny because Danny did not accepted the offer, he just asked for a condition to accept that was about a test drive before deciding. Remember that a contract is closed when both parts totally agree and accept the conditions about the product, the price and other things they believe are important to deal, so for that case, they agree about the test drive, but they didn´t agree about making the business yet, so you can notice that the test drive was the condition from the offeror to keep his offer up, that means the business was in danger to fail if the test drive was not enough to convince the buyer; in this order of ideas Mohan is free to sell the car who ever he wants, and Danny can´t win an eventually sue.
We can resume the fact in a simple way by saying that the one who offers accepts the product as well as it is, and the one who accepts the offer, is agree with the amount of money, so both of them are biding a contract, that means they are getting obligations and rights. However there are going to be differences between offerors and offerees that judges will fix in the best way they can. By now is very important to keep in mind that advertise something is not as easy as it seems to be, so you got to be careful about what you write in your advertisement, and think for a little while if your advertisement is an invitation to treat or if you are making an offer to people (by the way, remember almost all the advertisement are considered as invitations to treat not as an offer but you must be careful about it).
The Law of Contract by Laurence Koffman: About the all the clauses of a contract including the ones about invitation to treat, invitation to buy and offer, counter offer and accepted offer.
Laws of Malasya Act 136: about some examples
Civilian Law in Colombia, making emphasis that in Colombia, there is not big deal with that issue.
I also got information about difference between offer and invitation to treat or invitation to buy, by getting free resources in internet like:
Wikipedia.com: about the meaning and some examples
derechomercantilespana.blogspot.com: about Law in Spain and invitation to buy
Coursework.biz: about the kinds of invitations to treat