MZUMBE UNIVERSITY

SCHOOL OF BUSINESS
COURSE NAME : BACHELOR OF ACCOUNTING AND FINANCE-PS
COURSE CODE : LAW 109
LECTURER : MR. H. MOSHI
NATURE OF WORK : GROUP ASSIGNMENT
DATE OF SUBMISSION : 07/12/2023
GROUP NO.06 1C
GROUP MEMBERS
No NAME REGISTRATION
1 FANUEL STEVEN 1731152/T.23
2 TIM ERRIO 1731042/T.23
3 JOYCE ELIAS 1731190/T.23
4 BARAKA ELIAS 1731195/T.23
5 REHEMA FAUSTINE 1731191/T.23
6 DAVID LUGERA 1731100/T.23
7 JOSEPHAT KAREBU 1731249/T.23

Task:

“In bilateral contracts where both parties make promises and assume obligations one has to be
careful whether or not a statement made amounts to a proposal or a merely invites other
persons to make proposals” Anonymous in the light of the above contractual legal alert and
with relevant legal authorities, discuss the following

i. The differences between offer and invitation to treaty.

WORK OUTLINE
1.0 INTRODUCTION

> General overview of the work

> Meanings of some important terms

2.0 MAIN DISCUSSION

2.1 Different between offer and invitation to treaty

2.2 The contractual aspects that constitute an invitation to treaty instead of an offer.

3.0. CONCLUSSION

4.0 REFERENCE

1.0 INTRODUCTION

General overview of the work

Offer

An offer is an expression of willingness to contract on specified terms, made with the intention
that it is to be binding once accepted by the person to whom it is addressed. There must be an
objective manifestation of intent by the offeror to be bound by the offer if accepted by the
other party. Therefore, the offeror will be bound if his words or conduct are such as to induce a
reasonable third party observer to believe that he intends to be bound, even if in fact he has no
such intention. This was held to be the case where a university made an offer of a place to an
intending student as a result of a clerical error1

Also the law of contract act in section 2(1)(a) CAP 345 R.E 2019 is state about offer that when
one person signifies to another his willingness to do or to obsttain from doing anything, with a
view to obtaining the assent of that offer to such act or abstinence , he is said to make a
proposal2 also in the book of ellioth is state that The person making an offer is called the
offeror, and the person to whom the offer is made is called the offeree. A communication will
be treated as an offer if it indicates the terms on which the offeror is prepared to make a
contract (such as the price of the goods for sale), and gives a clear indication that the offeror
intends to be bound by those terms if they are accepted by the offeree 3.

Invitation to treaty

Some kinds of transaction involve a preliminary stage in which one party invites the other to
make an offer4. An invitation to treat (or invitation to bargain in the United States) is a concept
within contract law which comes from the Latin phrase invitatio ad offerendum, meaning
"inviting an offer". According to Professor Andrew Burrows, an invitation to treat is an
expression of willingness to negotiate. A person making an invitation to treat does not intend to

1
Allen & overy, basic principles of english contract law advocate for international development .www.a4id.org
2
[CAP 345.R.E 2019]
3
Catherine elliott & frances quinn, contract law 7th edition 2009 great britain publishers pg 12
4
Catherine elliott no 3. Pg 14
be bound as soon as it is accepted by the person to whom the statement is addressed 5
Sometimes a person may not offer to sell their goods, but makes some statement or gives some
information with a view to inviting others to make offers on the basis. Likewise, inviting persons
to an auction, where goods to be auctioned are displayed, is not an offer for the sale of goods.
The offer is made by the intending buyers in the form of bid. Such an offer (bid), when accepted
by the fall of hammer or in some other customary way, will result in a Contract. A contract is a
legally binding voluntary agreement formed when one person makes an offer, and the other
accepts it. There may be some preliminary discussion before an offer is formally made. Such
pre-contractual representations are known variously as "invitations to treat", "requests for
information" or "statements of intention".

Also this is shown in the case of In Gibson v Manchester City Council 6 a council tenant was
interested in buying his house. He completed an application form and received a letter from the
Council stating that it ‘may be prepared to sell the house to you’ for £2,180. Mr Gibson initially
queried the purchase price, pointing out that the path to the house was in a bad condition. The
Council refused to change the price, saying that the price had been fixed taking into account the
condition of the property. Mr Gibson then wrote on 18 March 1971 asking the Council to ‘carry
on with the purchase as per my application’. Following a change in political control of the
Council in May 1971, it decided to stop selling Council houses to tenants, and Mr Gibson was
informed that the Council would not proceed with the sale of the house. Mr Gibson brought
legal proceedings claiming that the letter he had received stating the purchase price was an
offer which he had accepted on 18 March 1971. The House of Lords, however, ruled that the
Council had not made an offer; the letter giving the purchase price was merely one step in the
negotiations for a contract and amounted only to an invitation to treat. Its purpose was simply
to invite the making of a ‘formal application’, amounting to an offer, from the tenant.

2.0 MAIN DISSCUSION

5
en.m. Wikipedia . org. Acxes on 5-12-2013 at 9:12
6
(1979)
2.1 The difference between an offer and invitation to treaty

Legal commitment; offer to treaty is always create binding legal commitment because one
party provide an offer to another party and that party can provide acceptance to that offer
given, so those activities can create binding legal commitment WHILE Invitation to treaty there
is no legal commitment because it’s only pre-contractual communication between those two
parties

Willingness; offer to treaty expresses a willingness to enter into a contract on specific terms
because two parties can create a legal binding commitment which may be a result of an
agreement between an offer and acceptance WHILE Invitation to treaty can expresses a
willingness to negotiate an agreement.

Contract formation; offer to treaty can lead to contract formation when offer provided to one
party been accepted to another party, so offer to treaty always can lead to a contract formation
between two parties WHILE Invitation to treaty can not lead to a contract formation but can
leads to an offer made by the other party, so when invitation to treaty is made there is no
contract formation between parties. Offer to treaty and invitation to treaty are two different
terminologies but they both operate under the law of contract. There different essentials of a
contract in a business law where can include; offer and acceptance, legality, consideration and
other more essentials.

2.2. The contractual aspects that constitute an invitation to treaty instead of an offer.

Advertisement in newspapers or magazines; this can lead to invitation to treaty because can
create a pre contractual communication expressing a willingness to negotiate an agreement but
not amounting to a legally binding offer.

Shop displays showing items with price tags; here we can see how invitation to treaty because
a price tag in a product can show the contract formed automatically when a potential buyer
shows interest in a purchasing a product or service.
Catalogues or price lists distributed by companies; on this invitation to treaty can be showed
because can show express a willingness to negotiate an agreement but does not amount to a
legally binding offer between those parties.

Auctions; this is one among important contractual aspect of invitation to treaty because when a
bidder makes an offer, and the seller can choose to accept or reject. This is invitation to treaty
because can lead to negotiable agreement but not amounting to a legally binding offer.

●Tenders

When a large organisation, such as a company, hospital, local council or government ministry,
needs to find a supplier of goods or services, it will often advertise for tenders. Companies
wishing to secure the business then reply to the advertisement, detailing the price at which
they are willing to supply the goods or services, and the advertiser chooses whichever is the
more favourable quotation. Tenders can also be invited for the sale of goods, in much the same
way as bids are made at an auction. An invitation to tender may also be regarded as an offer to
consider all tenders correctly submitted, even if it is not an undertaking actually to accept one.
In Blackpool and Fylde Aero Club Ltd v Blackpool Borough Council 7. the Council invited tenders
from people wishing to operate leisure flights from the local airport. Those who wished to
submit a tender were to reply to the Town Hall, in envelopes provided, by a certain deadline.
The plaintiff returned his bid before the deadline was up, but the Council mistakenly thought it
had arrived late. They therefore refused to consider it, and accepted one of the other
tenders.The plaintiff’s claim for breach of contract was upheld by the Court of Appeal. Although
the Council was not obliged to accept any of the tenders, the terms of their invitation to tender
constituted an offer at least to consider any tender which was submitted in accordance with
their rules. That offer was accepted by anyone who put forward a tender in the correct manner,
and their acceptance would create a unilateral contract, obliging the Council to consider the
tender. The Council was in breach of this unilateral contract

7
(1990)
Conclusion:

Invitation to treaty in contract law can be also described as a type a contract that is
automatically formed when a potential buyer shows interest in purchasing a product or
services, also can be a legally binding offer with specific terms that, if accepted creates an
enforceable contract between parties.
 REFERENCE

Statutes

The law of contract act [CAP 345 R.E 2019]

Books

Catherine elliott & frances quinn, contract law 7th edition 2009 great britain publishers

Manuals

Allen & overy, basic principles of english contract law advocate for international
development .www.a4id.org

Cases

Gibson v Manchester City Council 1979

Blackpool and Fylde Aero Club Ltd v Blackpool Borough Council. 1990

Online materials

> en.m. Wikipedia . org. Acxes on 5-12-2013 at 9:12

>‘Differences between offer and invitation to treat’ (Lawteacher.net, December 2023)

https://www.lawteacher.net/free-law-essays/contract-law/difference-between-offer-and-
invitation-contract-law-essay.php?vref=1 accessed 3 December 2023