It is important to
understand that a party may give an offer to another party to get into
contract, and if the other party sees a good opportunity in the offer being
made, then both may sign a contract. There are two terms to understand in this
regard so that relevant parties can understand what a valid offer is, and what
not a valid offer is. The two terms to be understood are offer capable of
acceptance and an invitation to treat. First of all, it is important to define
both terms so that their differences can be identified. An offer is something,
which is made by one party to the other party. The offeror gives an offer that
is specific as well as complete in all terms, and it has the capability to be
accepted. It means that fundamental and legal agreement terms should be
included in the offer so that the offer is quite clear and another party can
easily understand. A person cannot make a vague offer, where things are
unclear. An offer is actually a proper proposal given to another party. It is
also vital to understand that when an offer made by a party is accepted by the
other party, then it means that offer is now turned into a legal contract as
both parties have agreed on its terms and conditions (Surbhi, 2018)
However, an invitation to treat is different from an
offer in so many ways. An invitation to treat, a party may invite another party
to make any valid offer, which later could be accepted and formed into a
contract. But in its first stage, when an invitation to treat is made, and if
another person accepts this invitation, it does not make any binding contract;
rather it is just a way moving forward to make an offer. The real difference is
that when an offer is made and it is accepted, it means that a legal binding
contract is formed and law can take action in such cases. But if a party has
given an invitation to treat, then there is no legal contract, and the case may
not be entertained by the court. For instance, if a person goes to store for
the shopping, and a product is showing a discounted price of $10, then you take
the product to counter for billing, and pay the amount, which means an
invitation to treat was accepted by you as an offer. But there can be a
situation, where you take the product to the counter and they tell you that the
product will be priced at $10 if you buy three pieces, and a single piece of
product will be $15. In this situation, you can't force the store to sell it to
you in $10, because the price mentioned in the ad was just an invitation to
treat, not an offer capable of acceptance. So, this is the major difference
between the two concepts (LawTeacher, 2018)