Differences Between Offer and Invitation to Offer

Differences Between Offer and Invitation to Offer

Offer- When one person signifies to another his willingness to do or to abstain from doing anything, with a view to obtaining the assent of that other to such act or abstinence, he is said to make a proposal or offer.

An invitation to offer or invitation to treat is a preliminary communication that indicates a willingness to negotiate or engage in discussions but does not amount to a binding offer. It is an indication that one party is prepared to receive offers from others, which it can then accept or reject. The key distinction is that an invitation to offer is not an offer itself; it is merely an invitation for others to make offers.

Key Differences Between Offer and Invitation to Offer:

1. Nature of Communication:

• • Offer: A direct and complete proposal intended to result in a contract upon acceptance.

• • Invitation to Offer: A preliminary communication inviting offers without the intention to form a contract immediately.

2. Intent to Create Legal Relations:

• • Offer: There is an intent to create legal relations and be bound by the terms once accepted.

• • Invitation to Offer: There is no immediate intent to create legal relations; it is an invitation to negotiate or invite offers.

3. Formation of Contract:

• • Offer: Acceptance of an offer results in a binding contract.

• • Invitation to Offer: Acceptance of an invitation to offer does not create a contract; it merely results in the making of an offer.

4. Examples in Practice:

• • Offer: A seller states, “I will sell you my bike for $100.”

• • Invitation to Offer: A shop displays a bike with a price tag of $100, indicating they are open to receiving offers to purchase.

Books Recommended:      Check it Out

1. Beatsen (ed.)-Anson’s Law of Contract : (27th Ed. 1998)

2. Anson-Law of Contract (1998), Universal, Delhi

3. Pollock and Mulla-Indian Contract Act

4. Avtar Singh-Law of Contract, Eastern Book Co.(Lucknow)

5. S.K.Kapoor- Samvidha Vidhi (Hindi)

For more article on Contract Law go to the category- Law of Contract