An invitation to treat is an action inviting other parties to make an offer to form a contract. These actions may sometimes appear to be offers themselves, and the difference can sometimes be difficult to determine. The distinction is important because accepting an offer creates a binding contract while "accepting" an invitation to treat is actually making an offer.
Advertisements are usually invitations to treat, which allows sellers to refuse to sell products at prices mistakenly marked. Advertisements can also be considered offers in some specific cases. Auctions are sometimes invitations to treat which allows the seller to accept bids and choose which to accept. However, if the seller states that there is no reserve price or the reserve price has been met, the auction will be considered an offer accepted by the highest bidder.
How Can I Tell Whether Something Is an Offer or an Invitation to Treat?
An Invitation to treat will be anything that is displayed to a large number of people with an undefined way of choosing who can accept. An offer will be directed at a specific person with specified terms. So if an item is displayed saying it will be sold to the highest bidder or to the first to accept the labeled price, it will be considered an offer. If an item is simply displayed in a store window for example, it will not be an offer.
Do I Need a Lawyer?
Contract law is complicated and the applicable rules may vary between states. If you want to be sure you are not making an offer but inviting offers only, or think that you have a valid contract and want to enforce it, you should speak with a contracts attorney. A qualified business attorney can also assist you with proper drafting and protection if you want to enter into a contract.