Contract - Invitation To Treat

 

1. In the last posting, the concept of an offer and an acceptance was discussed.
2. Chronologically, it was often the case that the first movement from a party constitutes an offer. So long as the offer is validly made and had not been revoked, an acceptance of it would form a contract.
3. There are exceptions to this general rule where events that though being the first movement , is not an offer.
4. A common example of an exception is that of an auction. The offer by an auctioneer in an auction, though being the first movement, is not an “offer” but an invitation made by the auctioneer for offers to be made by bidders. As such, in an auction, the bid made by a bidder is the "offer" and if such bid is accepted by the auctioneer, this is the “acceptance” part leading to the formation of a contract.
5. Therefore, the contact is formed not when the bidder bids but when the auctioneer accepts the bid. This action by the auctioneer, in legal terms, is called an “Invitation To Treat” or in easier terminology a request by the auctioneer to "Make Me An Offer"!.

Until the next post...here's a Bite Size goodbye!