Business Law
Assignment 1
Section D
Marks: 10
Question:
What is an offer? How is it different from an invitation to treat? Explain both
concepts using examples.
Ans. An offer is defined as when one person indicates that he/she is willing to do something or
is abstaining to do something, either accepting to perform a positive act or refraining from a
negative act. An offeror makes the offer whereas the party accepting the offer Is the acceptor. An
invitation to treat is an invitation to enter into business. An invitation to treat is made with the
intention of enticing into a state where an offer is made. The party is made aware of the
circumstances involved in doing business and once their interest is created, an offer is made to
them which is further accepted or rejected by them. The basic difference between and offer an an
invitation to treat is of intention. There are certain fundamental differences between an offer and
an invitation to treat. When an offer is accepted, both parties are legally bound to follow the legal
terms and conditions that have been set, however in case of an invitation to treat, there is room
for negotiation and neither of the two parties are legally bound. E.g. advertisements at olx/Pak
wheels are an invitation to treat where the seller is not bound legally to sell the product to
everyone who accepts the offer. if it had been and offer, the seller would’ve to sell to everyone
who accepts his/her offer at the demanded price. Fixed price at shops are an invitation to treat i.e.
clothing at Zara have non-negotiable prices, hence they are offers which can be accepted by the
first person who gains sale. However, clothing at stalls In Kareem block market is an example of
invitation to treat since the prices are negotiable and the seller can sell to anyone who offers
him/her a suitable price. Request for tenders for government projects are an invitation to treat,
the quoted rates which contractors send back to the relevant authorities are offers made by them
and if their offer is accepted, these contractors are legally bound to go forward with their
communicated commitment.