Invitation to Treat

The modern contract law knows another mechanism to express your will to enter into a
contract other than an offer known as an invitation to treat (Gisler, Stanoevska-Slabeva &
Greunz, 2000). The invitation to treat with an offer is different, since it is an invitation to initiate
offers or negotiations which can be seen in the case of Fisher v Bell, whereby the Court held that
the display of goods in a shop or market does not amount to an offer but to a mere invitation to
treat. The originator of an invitation to treat is not bound by his declaratory act, which means that
he can revoke it at any time (Gisler, Stanoevska-Slabeva & Greunz, 2000). If the addressee of an
invitation to treat wishes to accept this declaratory act, he must make an offer, and the invitation
to treat must be accepted by the originator again (Gisler, Stanoevska-Slabeva & Greunz, 2000).
There are a few situations that need to be considered in the case of invitation to treat such as
advertisement, brochure, display of goods and auction.
An "advertisement" is defined as any form of representation made to the public or a
section of the public in connection with a trade, business, craft or profession to promote the
supply or transfer of goods or services, immovable property, rights or duties (Ashgar Ali Ali
Mohamed, 2006). In relation to advertisements, the common law classifies it in two categories
which are bilateral and unilateral (Mohd. Ma'sum Billah, 1994). Mohd. Ma'sum Billah (1994)
reported that, advertising in the former does not create an offer but simply an invitation to make
an offer. This is because it can lead to further negotiations and the seller of the goods must be
satisfied that the buyer can pay the price of the goods before entering into a contract (Ashgar Ali
Ali Mohamed, 2006). This principle was explained in Partridge v. Crittenden where the appellant
had announced in the form of advertisement on the newspaper that he had some wild birds for
sale1. The problem here is whether such advertising is an offer or an invitation to deal with it.
The Court of Appeal held that bilateral advertising is not an offer, but merely an invitation to
create an offer. Moreover, the question of whether an advertisement is an offer or an invitation to
treat is an objective question, which depends largely on the offeror's intention (Ashgar Ali Ali
Mohamed, 2006). If the offeror wanted to make an offer, it would be an offer. However, if he
merely wanted to make an invitation to create an offer, it would amount to an invitation to treat
under these circumstances (Ashgar Ali Ali Mohamed, 2006). According to Ashgar Ali Ali
Mohamed (2006), in unilateral advertising, the award of a price or a reward for doing something
in accordance with the advertisement would constitute an offer and become a binding promise
between the parties when it is accepted and enforceable in the court of law2. In Carlill v Carbolic
Smoke Ball Company case, the defendant put in the newspaper an advertisement promising a
pound sterling 100 reward to anyone who contracted influenza or cold, despite consuming the
smoke ball produced by the defendant's company, in the prescribed manner. Such an
advertisement was held to constitute an offer, as the defendant clearly indicated in the
advertisement his intention (Mohd. Ma'sum Billah, 1994). An advertisement that calls on

1
[1968] 2 All ER 421.
2
Sighal & Subramanyam, The Indian Contracts Act, (edited and revised by Dr. R.C. Vyas), Law Book Co.,
Allahabad, India, 2nd Edn., 1980, p 121.
prospective employees to apply for a specific job in an organization is simply an invitation to
make an offer and not a job offer. It is a puffery3.
Furthermore, brochure is a form of invitation to treat, not an offer. Brochure describes
different types of goods for sale and it also provides price for each goods. When readers respond
to advertisements made by advertisers, a brochure explaining the advertisers' services or goods in
more detail is often sent to them (Md. Abdul Jalil, 2012). The question now is whether the
brochure used in trade as an advertising mechanism or advertising of goods for sale to people is
an offer or merely an invitation to treat. As a general rule, common law considers them as mere
invitation to treat and not an offer4. When the customer choose a particular item from the
brochure or price quotation and order for the item, this constitutes to an offer and the merchant
has an option either to accept the offer or to reject the offer (Md. Abdul Jalil, 2012). According
Md. Abdul Jalil (2012), the customer cannot sue him in common law for breach of contract if the
merchant rejects the offer. Justice and fairness, however, requires the merchant not to reject the
offer unless there is a good or reasonable basis for his decision.
Next, the common law has long regarded the display of goods on the shelf or window of
a shop or supermarket as a mere "invitation to treat", not an offer. If the customer takes the
goods, brings them to the cashier and pays their price, it is considered an offer (Mohd. Ma'sum
Billah, 1994). The contract is made only when the customer pays for the items at the cashier's
desk (Nuraisyah Chua Abdullah, 2017). The principle can be seen in Fisher v Bell5, whereby the
Court held that the display of goods on the shelves in a shop or market is not an offer, but merely
an "invitation to treat". It is the customer who makes the offer here, not the shopkeeper. The
shopkeeper is therefore entitled to accept or reject the offer, in other words the price of the goods
given by the customer or buyer6. Moreover, Lord Goddard C.J. in the Pharmaceutical Society v.
Boots Cash Chemists Ltd.7 said, "It would be wrong to say that the shopkeeper is offering to sell
each item in the shop to anyone who could come in and that person can insist on buying any item
by saying 'I accept your offer......'8". Similarly, online display of goods with price and online
advertisement of goods are also considered as an invitation to treat. According to Mulcahy,
“Goods displayed on the virtual shelves of a web site by analogy can be treated as an invitation
to treat in the same way as the goods on the shelves in the Boots case. The supplier’s program
checks the availability of the item and if it is in stock, the purchaser can make their offer by
entering their credit card details and clicking on a button to confirm their choices9.” (Md. Abdul
Jalil, 2012). Hence, for business convenience, online displays of goods and advertisement have
similar features, such as offline displays of goods and advertisements. They should therefore be
considered in the same way which is an invitation to treat and not an offer10.

3
Puffery quite commonly relates to the private law of contract where it denotes representations made during the
course of bargaining which, due to the hyperbolic nature or their character as pure opinion, were deemed to lack
contractual effect.
4
Montgomery Ward & Co. v Johnson, 209 Mass 89; 95 NE 29 (1911); Billah, M.M., Islamic Law of Trade and
Finance: A selection of issues, Ilmiah Publishers, Kuala Lumpur, 2003, p 7.
5
[1961] I QB 394
6
See in Sighal, op. cit, at. 124.
7
[1952] 2 QB 795
8
As qouted in Dr. Artar Singh, Law of Contract, Eastern Book Co. India, 3rd. ed. reprinted, 1983, at 12
9
L. Mulcahy, & J. Tillotson, Contract Law in Perspective, pp 67-68.
10
L. Mulcahy, & J. Tillotson, Contract Law in Perspective, pp 67.
 Lastly, the auctioneer's call for bids is not an offer but simply an invitation to treat (Md.
Abdul Jalil, 2012). When people bid to buy the auction item, they are considered to be making an
offer to buy the item. The auctioneer may accept or reject the offer and are entitled to withdraw
the bid call as long as he does not accept the bid by knocking down the hammer. When the
auctioneer announces its completion by the fall of the hammer, a public auction sale is completed
(Md. Abdul Jalil, 2012). In Payne v Cave11 case, the Court held that "the calls for bid is an
'invitation to treat', a request for offers. The bids made by persons at the auction can be accepted
or rejected as he chooses12". However, there is an exception to the auction sale rule. If an auction
sale expressly states that certain goods are auctioned "without reserve" prices, such an auction is
considered to be an offer and anyone can accept the offer by placing the highest bid regardless of
how low it is (Md. Abdul Jalil, 2012). This was decided in Warlow v. Harrison13. In this case,
the Court held that, if the reserve price is not specified in the auction, it is the auctioneer who
offers to sell the goods to the highest bidder and this offer is accepted as soon as the highest bid
is made (Md. Abdul Jalil, 2012).
In conclusion, it is clearly explains that an invitation to treat made by one party to another
is not an offer. Therefore, an "invitation to treat" cannot be accepted in order to form a binding
contract, since it is almost always the invitee who is asked to make the offer (Mohd. Ma'sum
Billah, 1994).

11
[1789] 3 Term Rep. 148
12
E.A. Lechtenstein, op. cit, at. 15
13
Warlow v Harrison (1859) 1 E & E 309; see also O’Sullivan, J. & Hilliard, J., The Law of Contract, p 24.
References

Nuraisyah Chua Abdullah (2017). Malaysian Courts, Statutes, Cases & Contract, Tort and
Criminal Law. Bandar Damansara Perdana, Petaling Jaya, Selangor: International Law
Book Services.

Ashgar Ali Ali Mohamed (2006). Deceptive Or Misleading Advertisements With Specific
Reference To Job Advertisements: Legal Ramifications. Retrieved February 6, 2019,
from https://www-cljlaw-
com.ezaccess.library.uitm.edu.my/Members/DisplayArticle.aspx?ArticleId=131465226&
SearchId=8maralib1

Gisler, M., Stanoevska-Slabeva, K., & Greunz, M. (2000). Legal Aspects of Electronic
Contracts. Electronic Contracts.

Md. Abdul Jalil (2012). Adoption of the Principle of ‘Invitation to Treat’ in Islamic Law of
Contracts. Jurnal Undang-undang & Masyarakat, 79-92.

Mohd. Ma’sum Billah (1994). Is An “Invitation to Treat” An Offer?. Retrieved February 6,