Difference Between Offer and Invitation to Offer

Carlill v. Carbolic Smoke Ball Co. (1893) (UK)

• Facts of the Case: The Carbolic Smoke Ball Company advertised that it would pay £100 to anyone who used its smoke ball as directed and still contracted influenza. The company deposited £1,000 in a bank to show its sincerity. Mrs. Carlill used the smoke ball as directed and contracted influenza. She sued the company for the £100 reward.
• Key Findings: The court held that the advertisement amounted to an offer, not merely an invitation to offer. The offer was specific and clear, and it became a contract when Mrs. Carlill used the product as directed, fulfilling the conditions set by the company. The deposit of £1,000 in the bank showed the company’s intention to be legally bound by the terms of the advertisement. Therefore, the offer was valid, and Mrs. Carlill was entitled to the reward.
• Relevance: This case clarifies that an advertisement can constitute an offer if it is clear, definite, and expresses a promise to be bound upon acceptance.

Balfour v. Balfour (1919) (UK)

• Facts of the Case: Mr. Balfour, an engineer, and his wife, Mrs. Balfour, were in England when they entered into an agreement where Mr. Balfour promised to pay his wife £30 a month while she stayed in England due to her health. When they later separated, the wife sued for the promised payments, claiming breach of contract.
• Key Findings: The court held that there was no legally binding contract in this case, as the agreement between Mr. and Mrs. Balfour was not intended to create legal obligations. The court emphasized that domestic or social agreements, made without the intention to create legal relations, are not enforceable as offers under contract law.
• Relevance: This case highlights that not every promise or agreement is an offer, particularly in the context of personal or family arrangements where the intention to be legally bound is absent.

Lalman Shukla v. Gauri Datt (1913)

• Facts of the Case: Gauri Datt’s nephew, Lalman Shukla, was sent on a mission to recover his uncle’s lost nephew. While Lalman was away, the uncle announced a reward for the person who could find his nephew. Lalman found the nephew but was unaware of the reward. He claimed the reward after learning about the announcement.
• Key Findings: The court held that Lalman Shukla was not entitled to the reward, as he had not accepted the offer before performing the act (finding the nephew). Since there was no knowledge of the reward at the time of the act, there was no valid acceptance of the offer. The reward announcement was a unilateral offer, and acceptance must occur before the act is performed.
• Relevance: This case reinforces the principle that an offer must be communicated, and acceptance must occur with the knowledge of the offer.

Case Laws Explaining “Invitation to Offer”

Fisher v. Bell (1961) (UK)

• Facts of the Case: A shopkeeper displayed a flick knife in his store with a price tag of £2. A police officer saw the knife and charged the shopkeeper with offering the knife for sale in contravention of the Restriction of Offensive Weapons Act. The shopkeeper argued that this was merely an invitation to treat and not an offer.
• Key Findings: The court held that the display of the knife with a price tag was an invitation to treat, not an offer. It emphasized that in the context of shop displays, a price tag does not constitute an offer but only an invitation for customers to make an offer to purchase the goods. The shopkeeper was not offering the knife for sale directly.
• Relevance: This case illustrates that a display of goods for sale is an invitation to offer, not an offer. The customer’s action of selecting the item is an offer, which the shopkeeper can accept or reject.

Partridge v. Crittenden (1968) (UK)

• Facts of the Case: Partridge, an individual, placed an advertisement in a newspaper offering to sell “British birds” at £1 each. He was charged with unlawfully offering to sell wild birds under the Protection of Birds Act. Partridge argued that his advertisement was merely an invitation to offer.
• Key Findings: The court held that the advertisement was an invitation to offer and not an offer itself. Partridge had merely invited individuals to make offers to buy the birds at the price stated in the advertisement. The contract would only be formed if the seller accepted an offer made by a buyer.
• Relevance: This case reinforces the distinction between an offer and an invitation to offer in the context of advertisements. An advertisement offering goods for sale is generally considered an invitation for offers from potential buyers.

Harvey v. Facey (1893) (UK)

• Facts of the Case: In this case, the defendant Facey responded to a telegram from the plaintiff Harvey asking, “Will you sell us Bumper Hall Pen? Telegraph lowest price.” Facey replied with a price of £900. Harvey then sent a telegram stating, “I accept your offer of £900.” Facey refused to sell, leading Harvey to sue.
• Key Findings: The court ruled that the statement made by Facey, stating the price of £900, was not an offer but an invitation to treat. The price quote was merely a statement of the minimum price for negotiation, and no binding contract was formed until there was an actual offer and acceptance. The plaintiff’s acceptance was not valid because there was no prior offer.
• Relevance: This case is significant in illustrating that a mere statement of the price or willingness to negotiate is considered an invitation to offer and not a final offer. It reinforces the principle that communication of intent to negotiate is not an offer.