1. For a contract to exist, the agreement must also be legally binding/legally enforceable. What does this mean?
Answer: A contract is a special type of agreement quite unlike other types of agreement such as domestic, social or volunteering agreements. Break a contract and you could, potentially, be sued. There are no such legal consequences if you break a domestic or social agreement or you get fed up working as a volunteer in the local charity shop.
2. What are the two elements of any contract?
Answer: An offer and an acceptance = contract
3. What is an invitation to treat?
Answer: Very simply, it’s a basic form of marketing or advertising by the retailer or the trader. They wish to alert you to the fact that they have goods or services available that might be of interest. It is then up to you to go and make the offer to the appropriate representative of the trader. This offer will be considered (perhaps extremely quickly and without much in the way of negotiation) and accepted leading to a contractual agreement between the parties. An invitation to treat is a willingness by the trader/retailer to enter into negotiations with a potential customer. The trader or retailer is effectively saying: ‘I’m open to offers or make me an offer’.
4. Provide FIVE examples of an invitation to treat.
Answer: Adverts in newspapers/magazines/trade journals; auctions; catalogues; goods in shop windows and on shelves; & price lists. You also could mention websites; & quotes and estimates.
5. Why must an invitation to treat be distinguished from a distinct and definite offer?
Answer: An invitation to treat is not capable of being accepted. It is not an offer. It is merely a starting point for negotiations between the parties which may or may not lead to a contract.
6. Where is the point of sale in a supermarket and what, in terms of offer and acceptance, happens there?
Answer: The point of sale in a supermarket is the checkout (whether it is operated by an employee or is a self-service facility). The customer makes the offer in relation to the invitation to treat e.g. goods on the shelves or goods in the shop window made by the supermarket. The acceptance happens when the sale is run up on the cash register/scanner. You might not think this matters, but consider an underage person trying to buy alcohol or cigarettes, it will really matter to the supermarket that it gets an opportunity to refuse the customer’s offer.
7. What is a misleading price indication?
Answer: This occurs when the retailer or trader applies the wrong prices to a product. This could be a genuine mistake or a deliberate act by the retailer.
8. Does a retailer have to sell a consumer the goods with the wrong price on the ticket or label?
Answer: No. It’s been well established law for some time that goods displayed on shelves or in shop windows are not offers to the general public capable of acceptance, but rather they should be seen for what they are: invitations to treat (see Pharmaceutical Society of Great Britain v Boots Cash Chemists (1953) and Fisher v Bell (1961)) .
9. What other legal consequences arise as a result of misleading price indications by a retailer?
Answer: Although a store might not be liable to a customer for misleading price indications or statements under the law of contract, there are potential criminal consequences. The store could be prosecuted under criminal law and fined for misleading consumers. These laws are now contained in the Consumer Protection from Unfair Trading Regulations 2008.