Invitation To Treat Articles from GNUTELLAGRINDER.COM Free Article Directory

Search our Site:

Invitation to treat (or "bargain" in the US) is a contract law term. It comes from the Latin phrase invitatio ad offerendum and means an "inviting an offer". Or as Professor Burrows writes, an invitaton 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."^[1]

Contract lawyers distinguish this from a binding offer, which can be accepted to form a contract (subject to other conditions being met). The distinction between an offer and invitation to treat is best understood through the categories that the courts create. Invitations to treat include the display of a good, the advertisement of a price or an auction and an invitation for tenders (or competitive bids). There may however be statutory or complementary obligations, so consumer protection laws prohibit misleading advertising and at auctions without reserve there is always a duty to sell to the highest bona fide bidder. But the general rule is that unlike an actual offer, an invitation to treat is not binding. The "inviter" can change his or her mind.

The clearest example of an invitation to treat is a tender (or bidding in the U.S.) process. This was illustrated in the case of Spencer v. Harding (1870) LR 5 CP 561, where the defendants offered to sell by tender their stock and the court held that they had not undertaken to sell to the person who made the highest tender, but were inviting offers which they could then accept or reject as they saw appropriate. In certain circumstances though, an invitation for tenders may be an offer. The clearest example of this was seen in Harvela Investments Ltd v. Royal Trust of Canada (CI) Ltd [1986] AC 207, where the defendants had made it clear that they were going to accept the highest tender; the court held that this was an offer which was accepted by the person who made the highest tender and that the defendants were in breach of contract by not doing so.

Invitation To Treat Subcategories Invitation To Treat Articles