An offer shows a willingness to be bound on stated terms once accepted. An invitation to treat invites another person to make an offer or continue negotiations. In an English contract-law problem, ask what the words and context objectively communicate, rather than assume that mentioning a price creates an offer.
The distinction helps identify who makes the offer and when acceptance can occur. It is one part of formation: other requirements, including consideration and intention to create legal relations, may still need attention.
1. An item on a self-service shelf
Example: A shop displays a notebook on a shelf with a £6 price label. A customer puts it in their basket.
Analysis: The ordinary display invites the customer to make an offer to buy. Picking up the notebook does not itself complete the sale. In Pharmaceutical Society v Boots [1953] 1 QB 401, the self-service display was an invitation to treat, with the transaction completed through the checkout process.
What matters: distinguish selecting goods from acceptance by the seller. Other rules may govern misleading prices or a retailer’s conduct, but the formation question has its own analysis.
2. An ordinary sales advertisement
Example: A seller posts: “Used desk, £80. Contact me if interested.” A reader replies: “I accept.”
Analysis: The wording invites an approach rather than clearly committing the seller to supply the desk to whoever responds. In particular, “contact me if interested” points towards further discussion. Compare the attention to tentative language in Gibson v Manchester City Council [1979] 1 WLR 294, discussed below.
What matters: “I accept” does not create a contract if there was no offer to accept. Look for language showing commitment, not simply the presence of a price.
3. A definite reward promise
Example: A notice promises: “£100 to the first person who returns my missing, serial-numbered camera to this address by Friday.” Someone who knows of the reward returns the identified camera in accordance with the stated conditions.
Analysis: This is capable of being a unilateral offer accepted by the requested performance. The key difference from the desk advertisement is the definite commitment to pay for completing a specified act.
Carlill v Carbolic Smoke Ball Co [1893] 1 QB 256 demonstrates why “all advertisements are invitations to treat” is too broad.
What matters: identify the promised reward, the required performance and any conditions. Do not assume that beginning an act is always the same as completing the performance required for acceptance.
4. Tentative language during negotiations
Example: A council writes that it “may be prepared” to sell a property and invites the resident to make a formal application.
Analysis: That language points towards a step in negotiations, rather than a definite offer ready for acceptance. In Gibson v Manchester City Council [1979] 1 WLR 294, the wording of the correspondence mattered to the conclusion that no contract had been formed.
What matters: read the entire communication. A quoted price can sit inside a document that still requires a further decision or application.
5. An ordinary auction bid
Example: At a conventional auction of goods with a reserve, a bidder offers £300. Before the auctioneer announces completion by the fall of the hammer or another customary method, the bidder retracts the bid.
Analysis: Section 57(2) of the Sale of Goods Act 1979 addresses completion and permits a bidder to retract before that announcement. The bid is the offer; the invitation for bids is not an acceptance in advance.
What matters: establish the type of auction and its terms. An auction advertised without reserve can raise additional obligations; do not transfer conclusions between the two without analysis.
6. A direct offer to a named buyer
Example: A seller writes to Nisha: “I offer to sell you this identified bicycle for £400, collected tomorrow. Reply if you accept.” Nisha receives the message and replies with an unqualified acceptance, which the seller receives while the offer remains open.
Analysis: Unlike tentative negotiations, the wording indicates a present commitment on specified terms. On these simplified facts, there is an offer and communicated acceptance. Check the remaining formation requirements before concluding that every possible contractual issue has been resolved.
What matters: the identity of the item, terms, wording and communication. A direct message is not automatically an offer, but this one is framed as one.
What happens if the response changes the terms?
Suppose Nisha instead replies: “Only if you deliver it free.” That introduces a condition. A counter-offer rejects the original offer; a mere inquiry may leave it open. Compare Hyde v Wrench (1840).
This is why you should not jump from “offer found” to “contract formed”. Analyse the reply and chronology too. Distinguish acceptance, counter-offer, inquiry and revocation.
A quick method for problem questions
Identify the alleged offer and quote only the decisive words. Explain whether they show commitment or invite further negotiation. Identify the act said to accept the offer, then check whether it meets the terms and occurs while acceptance is still possible.
For more practice, MCQ Master includes contract formation questions with explanations. Law Answered+ gives you access to all our revision guides and casebooks covering the full syllabus, with MCQ Master included—bringing the rules, authorities and question practice for your revision together in one membership. Try applying the distinction before reading the explanation, then ask which changed fact would produce a different answer.
Once you have identified offer and acceptance, explore the next formation issue in consideration and promissory estoppel.