It is important to identify when a true offer has been
made because once it is accepted the parties are bound.
If the words and actions of one party do not amount to
an offer, however, the other person cannot, by saying ‘I
accept’, create a contract. A genuine offer must, there-
fore, be distinguished from what is known as an ‘invita-
tion to treat’.
An invitation to treat
This is where a person holds himself out as ready to
receive offers, which he may then either accept or reject.
The following are examples of invitations to treat.
1 The display of goods with a price ticket attached in
a shop window or on a supermarket shelf.This is not
an offer to sell but an invitation for customers to make
an offer to buy.
Thus, it is a clearly established principle of civil law
that if goods are displayed for sale with an incorrect
price ticket attached to them, the retailer is not obliged
to sell at that price. Under the criminal law, however, the
retailer may find himself facing a prosecution for an
unfair commercial practice.
2 Advertisements, catalogues and brochures.Many
businesses make use of the press, TV, commercial radioPart 3Business transactions
206
sincerity in the matter it had deposited £1,000 at the
Alliance Bank to meet possible claims. Mrs Carlill bought
one of the smoke balls, used it as directed but still caught
’flu. She claimed the £100 reward but was refused, so
she sued the company in contract. The company put for-
ward a number of arguments in its defence: (a) It claimed
that it had attempted to contract with the whole world,
which was clearly impossible. The Court of Appeal held
that the company had made an offer to the whole world
and it would be liable to anyone who came forward and
performed the required conditions. (b) The company fur-
ther submitted that the advertisement was in the nature
of a trade ‘puff’ and too vague to be a contract. The
court dealt with this argument by asking what ordinary
members of the public would understand by the adver-
tisement. The court took the view that the details of use
were sufficiently definite to constitute the terms of a con-
tract and that the reference to the £1,000 deposited at
a bank was evidence of an intention to be bound. (c) The
company also argued that the claimant had not pro-
vided any consideration in return for its promise. The
court held that the inconvenience of using the smoke
ball as directed was sufficient consideration. (d) Finally,
the company submitted that there was no notification
of acceptance in accordance with the general rule. The
court held that in this kind of contract, which is known as
a unilateral contract, acceptance consists of performing
the requested act and notification of acceptance is not
necessary.
The court concluded that Mrs Carlill was entitled to
recover the £100 reward.Fisherv Bell(1960)A shopkeeper had a flick-knife on display in his shop
window. He was charged with offering for sale an offen-
sive weapon contrary to the provisions of the Restriction
of Offensive Weapons Act 1959. His conviction was
quashed on appeal. The Divisional Court of the Queen’s
Bench Division held that the display of goods with a
price ticket attached in a shop window is an invitation to
treat and not an offer to sell. (The Restriction of Offensive
Weapons Act 1961 was passed soon after this case to
close the loophole in the law.)Pharmaceutical Society of Great
Britainv Boots Cash Chemists
(Southern) Ltd(1953)
Boots operated a self-service, ‘supermarket’ system at
its Edgware branch in which the merchandise, including
drugs on the Poisons List, was laid out on open shelves
around the shop. Customers selected their purchases
from the shelves, placed them in a wire basket and paid
for them at a cash desk which was supervised by a reg-
istered pharmacist. The Pharmaceutical Society claimed
that by operating this system Boots had committed an
offence contrary to s 18 of the Pharmacy and Poisons
Act 1933, which states that the sale of drugs included on
the Poisons List must take place in the presence of a
qualified pharmacist. The Pharmaceutical Society argued
that the sale took place when a customer placed his
purchase in the basket, which was not supervised by a
pharmacist. The Court of Appeal held that the display of
drugs on the open shelf constituted an invitation to treat.
The customer made the offer to buy at the cash desk
and the sale was completed when the cashier accepted
the offer. Since the cash desks were supervised by a
registered pharmacist, the requirements of the Act had
been fulfilled and, therefore, Boots had not committed
an offence.