What is offer and acceptance?
The traditional view of the law in determining whether a contract has been legally created is to establish the creation of offer and acceptance.
One person makes an offer to the other person and then they accept or decline this offer.
Determining whether an offer to create a contract has been made is not quite as straight forward as it sounds. Difficulty arises where advertisements are concerned and also in situations where someone offers a reward for usually the return of a lost item or pet for example.
The ‘offer’ of a contract
One of the main concepts in establishing the offer of a contract is to distinguish the offer from a part of the negotiation process.
Whether there has been an offer will be established by the communication of the parties, and whether there is an offer or an invitation to treat.
What is an ‘invitation to treat’?
An offer is distinguished from an invitation to treat by the intention to be bound.
When a person makes an offer to form a contract they will usually have every intention to be bound by that offer if the other party accepts.
If a person advertises an invitation to treat then their only intention is to begin the negotiation process. This is most common in relation to shop keepers. Where they place an advertisement in their shop window they want to maintain the ability to negotiate on price/quantity etc if need be.
For more information on:
- Are advertisements offers or invitations to treat?