Question

Business law:

Goods were displayed in the shop for sale with price tags attached to each article and the self-service system was there. One customer selected the goods. Could you describe this kind of contract and when the contract is finalized? This case is an Invitation to Treat and why?

Answer 1

A: An Invitation to Treat is basically an intention to market, advertise and sell some products and services. In its raw form it is not a contract but an invitation for another party to enter into a contract. An Invitation to Treat is just an intentional purpose or objective seeking another party to express interest in their advertised goods or services and if the other party likes the goods or services and selects them, then a contract can be made out based on the offer, acceptane, and consideration.

Goods displayed in a shop is an advertisement by a shopkeeper to invite customers to purchase their goods by showing their collection and variety and tempting or persuading customers to come inside and select and purchase them. This is just a preliminary stage and not an offer to buy as yet as a customer has not selected and accepted the offer and consideration which is the price of the product.

Once a customer selects a good, accepts / agrees to the offer, agrees to the consideration to pay and the deal is accepted by the shopkeeper then it is said that a contract or agreement is in place. This would be a type of implied contract which is not written but oral and is implied based on the conduct or behaviour of the two parties towards each other - shopkeeper and customer.