Business Law- "Offer" and "Invitation to Treat” the Differences.

According to Sir Frederick Pallock (1783), a contract is “A promise or set of promises that the law will enforce”. Business makes contracts all the time with suppliers, customers, employees etc. The essential part of every contract is that there are two parties implied and that there is always an offer and an acceptance. Contracts are usually written and signed on paper, but they don’t have to be this way necessarily, this is what can be called verbal contracts.

Acceptance is an unconditional expression of willingness to be legally bound by all the terms of an offer, which has been properly communicated to the offeror (and gives rise to a legally binding agreement). (Jon Rush and Otley 2006). The acceptance is the most important part of an offer. Acceptance implies that the offeror and offeree unconditionally agree to all the statements implied in the offer. Acceptance can be communicated orally or in writing and it creates a legal contract but the most important part is that it shows the agreement and satisfaction of both parties when a transaction is made.

An offer is a proposal with a promise by the offeror (person who makes the proposal) that he will be bound by the promise of the offeree ( person to whom the proposal is made)accepts it. There for; “An offer is a promise to do or not to do something that is capable of acceptance by another person” (Anon 2007).

An offer must be complete, clear and specific in order to be accepted. It means that all the terms must be clearly explained so that further negotiations do no occur.

Both, “offer” and “invitation to treat “are contractual terms that can create confusion when a transaction is to be made. To analyze an Invitation to a treat we must understand its actions. Invitation to a treat is when the parties are invited to make an offer that will form a contract later on. This can be complicated to understand sometimes because the actions in an Invitation to a treat can seem like offers in some occasions and...