The Invitation to Treat in Contract Law

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An invitation to treat is an invitation to negotiate or make an offer. Advertisements are usually an invitation to treat as it allows a seller to refuse sale of a product in the event it was fallaciously priced. [1] This particular advertisement amounts to an invitation to treat as it is solely dependent on Mike accepting the order to supply the goods and subsequently take payment. If Mike ran out of stock it would seem harsh to sue for breach of contract if such a possibility did occur.[2] The Fisher v Bell case raised the issue as to whether the display of a knife in a shop window paired with a price tag constituted an offer or invitation to treat.[3] It was held that the knife in the shop window was only an invitation to treat and therefore the knife was not ‘offered for sale’. The general law of the country is reflected in a statement made by Lord Parker. He insisted that ‘the display of an article with a price is merely an invitation to treat’.[4] Mike is displaying a good at a discounted price to entice customers into placing offers from which he can choose to accept or decline. Mike Mike circulated flyers to local businesses through the post. The issue to be looked at here is regarding revocation of the advertisement. Mike found that the discounted price was too generous and therefore posted a letter to the same businesses to revoke the advertisement. This letter was received on February 2nd. It is now under discretion as to whether or not the advertisement is still valid. In Dickinson v Dodds a house was offered for sale to the claimant and was subsequently sold the following day to another client. The original offer made by the claimant was revoked when the news of sale was passed on to him.[5] It was made clear that revocation becomes effective once it has been communicated. Alongside the case, the postal rule can be partially used as guidance. The rule is confined to acceptance and does not apply to revocation. [6] Taking guidance from Dickinson v Dodds, it is clear that revocation has to be communicated. Mike had posted a letter on January 20th and it was later delivered on February 2nd. The postal rule would not apply in this situation as revocation is only effective once it has been acknowledged.[7] Moreover, it is evident that revocation is only applicable to offers. For this reason, revocation is not required as Mike it not legally obliged to sell since he has not ‘offered for sale’ a computer. Mike would not be obliged to sell the computer as the advertisement only constitutes to an invitation to treat. The letter sent would act as information to inform customers that the deal does not exist. Vanessa Vanessa posted a letter on the 30th of January which was received by Mike on 1st February.

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