Tag: Offers

Tis the season of special offers?

Photograph by Seán J Crossan

Don’t believe the hype …

If you were fooled by all the hype surrounding the retail extravaganza that has become Black Friday (and now extending to Cyber Monday), you might think that retailers (both on the High Street and on-line) have gone offer crazy …

… and that is where you would be wrong (very wrong).

Let’s begin by examining the photograph of the McDonald’s flyer at the top of this Blog. The word ‘offer’ helpfully appears in the flyer, but is this what it seems to be? I’ll return to this issue at the end of this Blog.

During the last fortnight, I’ve just started teaching a group of students about the basics of contract law.

I often begin these sessions by asking them to consider whether advertising material (or advertorial content these days – I must have missed this development) whether it is of the on-line variety; goods in shop windows or goods on the shelves or plain old fashioned advertisements constitutes an offer capable of acceptance by the customer?

My students seem quite surprised when I say to them that the vast majority of these so called offers are nothing more than an invitation to treat. Merely because the retailer calls a marketing device an offer doesn’t make it so.

I must admit that the first time that I heard the phrase ‘invitation to treat’ during one of my first contract law classes as an 18 year old university student I was pretty baffled.

What was this mysterious thing? It turned out to be quite simply a device used by a retailer or a trader to get potential customers interested in the goods and services that they could supply. A stimulus in other words. In fact, it was up to the customer to make the offer to purchase the goods and/or services and, most of the time, the retailer or the trader would accept this offer.

Obviously, a retailer might refuse to accept an offer if, for example, it someone under the age of 18 attempting to purchase alcohol or cigarettes.

In situations, where the customer wished to haggle over the price, the retailer might reject any offer which was lower than that wished they hoped to achieve. After all, price tickets are merely an indication of what the trader or retailer would like to achieve (although beware of a possible breach of a possible breach of the criminal law in terms of the Consumer Protection from Unfair Trading Regulations 2008).

Previously decided case law (or judicial precedent) in the United Kingdom is very clear about the differences between offers and invitations to treat, as we can see below:

  • Harvey v Facey [1893] AC 552
  • Jaeger Brothers Ltd v J & A McMorland (1902) 10 SLT 63
  • Fenwick v MacDonald Fraser & Co Ltd (1904) 6 F 850
  • Pharmaceutical Society of Great Britain v Boots Cash Chemists [1953] 1 QB 401
  • Fisher v Bell [1961] 3 ALL ER 731

As Lord Parker CJ remarked in Fisher v Bell (1961):

‘It is clear that, according to the ordinary law of contract, the display of an article with a price on it in a shop window is merely an invitation to treat. It is in no sense an offer for sale, the acceptance of which constitutes a contract.‘

Invitations to treat are, therefore, a form of marketing:

  • Advertisements
  • Goods on shelves
  • Goods in shop windows
  • Goods placed for sale at auction
  • Internet sites e.g. Amazon
  • Price indications/tickets
  • Quotes

You’ve got to admit the following statement blasted out across the public address system of a retail outlet or on a website doesn’t quite have the desired impact:

“Hello shoppers! We have a great range of invitations to treat in store and on-line. Grab one while you can because they won’t last! When they’re gone, they definitely gone!“

I suspect that most shoppers would find the above announcement most unhelpful.

That is not to say, however, that businesses themselves always get their marketing approach spot on. Two cautionary cases are worth mentioning:

  • the better known English decision, Carlill v Carbolic Smokeball Co Ltd [1893] 1 QB 256; and
  • the less celebrated Scottish decision, Hunter v General Accident Fire and Life Assurance Corporation Ltd (1909) SC (HL) 30; 1909 SC 344.

Both cases involved advertisements aimed at the general public. Individual members of the public (Mrs Carlill and Mr Hunter respectively) responded to the advertisements by purchasing the item or service (in Mrs Carlill’s case, a carbolic smokeball; and in Mr Hunter’s case, life insurance cover).

The legal status of both advertisements came under scrutiny when both customers tried to hold the traders to statements which appeared therein. The businesses fell back on the traditional argument that the advertisements were nothing more than invitations to treat. Unfortunately, this is not how the English and Scottish courts viewed matters. The advertisements contained a level of very specific detail which gave them status of offers which both Mrs Carlill and Mr Hunter had accepted. Both customers had, therefore, concluded a binding contract with the traders.

The lesson learned? Since these two cases, advertisers have gone to great lengths to avoid being caught out. The lack of concrete detail in advertisements is often astonishing when you examine them; or statements about goods and services are usually qualified by all sorts of exceptions.

I often say to my students to look out for the stock phrases in advertisements or other marketing material, such as:

  • Terms and conditions apply
  • While stocks last
  • For a limited period only
  • On selected products only
  • ‘Offer’ ends on or ‘offer’ valid until …
  • Subject to status
  • Subject to availability

If any of these appear in an advertisement, in all likelihood you’re looking at an invitation to treat – most definitely not an offer.

This, of course, takes me neatly back to our flyer from McDonalds: offer or invitation to treat?

Well, two smoking guns from me are the phrases: ‘Offer valid until 15 December 2019’ and ‘Not valid at restaurants with a drive thru’. Definitely, an invitation to treat. In any case, I live in area where all the McDonald’s outlets have a drive thru, so no use to me.

Related Blog Articles:

Special offers!

https://seancrossansscotslaw.com/2019/03/27/special-offers/

Too good to be true

https://seancrossansscotslaw.com/2019/03/14/too-good-to-be-true/

Copyright Seán J Crossan, 6 December 2019