SQE1 Contract (FLK1), CON.01 Formation, offer and acceptance

Offers and invitations to treat, explained simply

A contract is formed when one party accepts the other's offer. Before deciding whether there was an acceptance, a question must therefore identify which communication was the offer. An offer is a statement of terms made with the intention that it will become binding as soon as the other party accepts it. An invitation to treat is an invitation to others to make offers, so a reply to it cannot by itself create a contract: at most the reply is an offer, which the other party may accept or reject. The intention is judged objectively, by asking how a reasonable person would understand the communication. SQE1 questions regularly test where common situations fall.

  • 4 min read
  • Worked example
  • Check yourself question
  • Law as at 7 October 2026

Why the distinction matters

Whoever makes the offer gives the other party the final say. If a shop's price label were an offer, every customer who picked up the item would be accepting it, and the shop would be bound to sell to all comers whatever its stock, and unable to refuse a customer it had good reason not to serve. Treating displays and most advertisements as invitations to treat leaves the seller free to decide whether to contract when the customer offers to buy. The courts depart from that starting point where the words used show a clear promise to be bound by anyone who does what is asked.

Where common situations fall

  1. Goods displayed in a shop, whether on shelves or in a window, are an invitation to treat. The customer makes the offer at the till, and the seller accepts it (Pharmaceutical Society of Great Britain v Boots Cash Chemists (1953) and Fisher v Bell (1961)).
  2. Advertisements of goods for sale are usually invitations to treat, because the advertiser could not have meant to sell to everyone who replied (Partridge v Crittenden (1968)).
  3. An advertisement can be a unilateral offer where it promises something to anyone who performs a stated act and shows an intention to be bound. In Carlill v Carbolic Smoke Ball Co (1893) the company promised a reward to anyone who caught influenza after using its product as directed, and said it had deposited money with a bank to show its sincerity. Mrs Carlill accepted by performing the act.
  4. At an auction, the auctioneer's request for bids is an invitation to treat. Each bid is an offer, and the auctioneer accepts it by the fall of the hammer or in another customary manner (Sale of Goods Act 1979, s.57(2)). Until then any bidder may retract the bid.
  5. An invitation to tender is normally an invitation to treat, and each tender is an offer. Where the invitation sets out a clear procedure, the party inviting tenders may be bound to consider every conforming tender submitted in time (Blackpool and Fylde Aero Club v Blackpool BC (1990)).
  6. A reply to a request for information, such as a statement of the lowest price a person would accept, is not an offer (Harvey v Facey (1893)). A letter saying that a party may be prepared to sell is not an offer either (Gibson v Manchester City Council (1979)).

A worked example

A hardware shop displays a power drill with a label showing a price far below its true value, because of a mistake by a member of staff. A customer takes the drill to the till and the cashier refuses to sell it at that price. The customer has no claim in contract, because the label was an invitation to treat, the customer made the offer at the till, and the shop was free to reject it.

Change the facts. A woman puts up posters promising a stated reward to anyone who returns her lost cat to her address. A neighbour who has seen one of the posters finds the cat and brings it back. The posters are a unilateral offer to anyone who performs the act, and the neighbour, knowing of the offer, accepted it by returning the cat, so the woman must pay the reward. The neighbour does not need to have told her in advance that they were looking for the cat.

The traps SQE1 questions set

  1. Price labels and displays, in shops or windows, are invitations to treat, so the customer makes the offer and the shop accepts or refuses it.
  2. An advertisement is usually an invitation to treat. Look for a clear promise to anyone who performs a stated act, which makes it a unilateral offer, as in Carlill.
  3. At an auction the bid is the offer, and acceptance comes with the fall of the hammer, so a bidder can withdraw a bid before the hammer falls.
  4. A unilateral offer is accepted by performing the act asked for. The offeree does not need to notify acceptance in advance.
  5. Answering a request for information, or stating a willingness to negotiate, is not an offer.
Check yourself

A bookshop displays a rare first edition in its window with a price label. A collector enters the shop, says she accepts the price on the label and puts the money on the counter. The owner refuses to sell, explaining that he has decided to keep the book. Is there a contract?

Show the answer

No. The window display with its price label was an invitation to treat, not an offer. The collector made an offer when she said she would buy at the labelled price, and the owner was free to reject it, which he did. No contract was formed.

Sources

  • Pharmaceutical Society of Great Britain v Boots Cash Chemists (Southern) Ltd [1953] 1 QB 401
  • Fisher v Bell [1961] 1 QB 394
  • Partridge v Crittenden [1968] 1 WLR 1204
  • Carlill v Carbolic Smoke Ball Co [1893] 1 QB 256
  • Blackpool and Fylde Aero Club Ltd v Blackpool BC [1990] 1 WLR 1195
  • Harvey v Facey [1893] AC 552
  • Gibson v Manchester City Council [1979] 1 WLR 294
  • Sale of Goods Act 1979, s.57(2)

Law as at 7 October 2026.