INVITATION TO TREAT

Date: 2015-10-07; view: 467.

GOODS AND SERVICES

The distinction between goodsand servicesis often useful, but sometimes it is better to think of a continuum between pure goods and pure services. Most contracts involve a portion of both. For example, when you pay for a meal in a restaurant, you are not just paying for the food, but for an experience. When you go to the hairdresser, the cost of the service should include the goods (shampoo, hairspray, etc.) that are used during your visit. Subscribing to a magazine to be delivered (a good) is not radically different from subscribing to an online magazine (a service).

There are obvious differences of detail between contracts for goods and those for services. In the UK, sales of goods are covered by many laws, including the Sale of Goods Act (1979), which serves as a standard set of terms for exchanges of goods where no explicit contract has been negotiated (e.g. buying something in a shop). Services are also covered by many laws, including the Supply of Goods and Services Act, which requires services to be carried out with reasonable care and skill, for a reasonable price, and in reasonable time.

Invitation to treat is a contract law term. It comes from the Latin phrase invitatio ad offerendum and means "inviting an offer". 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.

Contract lawyers distinguish this from a binding offer, which can be accepted to form a contract. 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 goods; the advertisement of a price or an auction; and an invitation for tenders. The general rule is that unlike an actual offer, an invitation to treat is not binding. The "inviter" can change his or her mind.

A shop owner displaying their goods forsale is generally making an invitation to treat. They are not obliged to sell the goods to anyone who is willing to pay for them, even if it is written "special offer" on the goods.

Generally, advertisements are invitations to treat, so the person advertising does not have to sell to every customer. In certain circumstances however, an advertisement can be an offer. A well known example is the case of Carlill v Carbolic Smoke Ball Company [1893]. The defendants advertised that they would pay anyone who used their product in the prescribed manner and caught influenza £100. They said that they had deposited £1,000 in the bank to show their good faith. The court decided that they hadmade an offer to the whole world and were contractually obliged to pay £100 to whoever accepted it.

A binding offer must be definite, clear, and final. If it is a nearly preliminary move into negotiation which may lead to a contract, it is not an offer but an invitation to treat.