The distinction between an offer and an invitation to offer is fundamental because it is based on the parties’ ‘specific intent.’ Whereas an offer immediately permits the other party to engage in a deal (legally enforceable contract) once approved, an invitation to treat primarily asks the other party to negotiate and make an offer to the seller. It may appear complex, yet it is an essential distinction that we frequently encounter in our daily lives.
However, nobody is legally obligated to do anything in this situation. Besides that, most types of advertising are invitations to offer rather than actual offers. To properly comprehend the distinction, consider how the request and invitation to offer have been described independently.
Definition of Offer
An offer is an individual affirmation of their readiness to do or not do something to another person to get their permission upon that affirmation. When the person accepts the offer, it may lead to a legal contract. A request must be specific, precise, and all-inclusive in every way—you must convey it to the intended party. There are several sorts of offers available, including:
General offer—this is an offer given to the general public.
Specific offer—is an offer given to an individual.
Cross offer—when the contracting parties accept each other’s offer while unaware of the initial offer.
Counteroffer—the offeree doesn’t accept the initial offer but modifies the terms of the contract to embrace it.
Standing offer—is an offer issued to the general public and stays open for acceptance for a defined length of time.
Example:
A says to B, “I’d like to sell my motorbike to you for Rs. 25,000; will you buy it?”
X approaches Y and says, “I’d like to buy your automobile for Rs. 250,000; would you sell it to me?”
Definition Of Invitation To Offer (Treat)
Invitation to offer is pre-offer conduct in which an individual urges another to make an offer to them. If the other person responds correctly, an invitation to offer culminates in an offer. An invitation to offer is created to the public to receive offers and negotiate the conditions of the contract.
The purpose of this offer is to tell the public about the stipulated terms of the contract when an individual is willing to engage in an agreement with the other. And although the first party isn’t an offeror, he is encouraging others to make him an offer. As a result, the acceptance is only an offer rather than a contract. So when the latter party accepts the other party’s request, it becomes a contract that both parties must follow.
Example:
A restaurant’s menu card that displays the pricing of meal items.
Tender from the Government
A company solicits applications from the general public to subscribe for its stock.
Significant Distinction Between an Offer and Invitation to Offer (Treat)
The following are the primary distinctions between an offer and an invitation to offer:
1. An offer represents the party’s ultimate readiness to establish legal ties. On the other hand, an invitation to offer is the party’s desire to invite the public to provide them rather than their utmost willingness.
2. The Indian Contract Act of 1872 defines an offer under section 2 (a). The Indian Contract Act of 1872, on the other hand, makes no mention of an invitation to bid.
3. An offer is required for the parties to reach an agreement, but an invitation to offer is not needed until it becomes an offer.
If an offer is approved, it becomes a settled contract. On the other hand, an invitation to offer only becomes an offer when the audience reacts.
4. The primary goal of creating an offer is to form a contract. The primary purpose of inviting you to offer is to discuss the parameters to establish the agreement.