3.4 - Agreement - offer, invitations to treat and acceptance

Agreement As A Formation Issue

A contract is not formed merely because two people were talking about a possible deal. For AQA Paper 3A, the first question is usually whether there was agreement: an offer still in existence, followed by acceptance of that same offer. Only after agreement should an answer move on to other formation requirements such as consideration and intention to create legal relations, unless the question clearly directs otherwise.

Agreement is best treated as a chronological classification exercise. Work through each communication in order and give it a legal label:

The AQA difficulty is not usually the vocabulary alone. The difficulty is keeping the chain of communications continuous. If an advertisement is only an invitation to treat, the next message is not an acceptance of that advertisement: it is likely to be an offer or further negotiation. If a counter-offer has killed the original offer, the offeree cannot later accept the original offer unless it has been revived by the offeror.

Use this formation sequence in scenario answers:

1. Identify the alleged offer and state who made it.
2. Decide whether it was really an offer or only an invitation to treat.
3. Check whether the alleged offer was still open when acceptance occurred.
4. Decide whether the response was acceptance, counter-offer or request for information.
5. State exactly when agreement did or did not form.
6. Add any consequence required by the question, such as breach and damages, only after formation is established.

This matters for evaluation too. Agreement rules aim to protect certainty and autonomy: people should know when they have become legally bound. The trade-off is that fine distinctions in negotiations can look technical, especially where ordinary commercial language is less precise than legal categories.

Offers, Invitations To Treat And Certainty

Offers and invitations to treat can look alike, but only an offer can be accepted to make a contract.

Advertisements and displays of goods are usually invitations to treat because sellers normally need freedom to choose whether to contract, manage stock, check price errors and refuse unlawful or unsuitable sales.

The AQA-supported authorities make the distinction usable:

The threshold is objective. The court asks how a reasonable person would understand the words and conduct, not what one party secretly intended. Words such as "may sell", "would you consider", "lowest price" or "please contact me" usually point away from an offer. Specific terms such as exact price, subject matter, quantity, deadline and a promise to be bound point towards an offer, although context still matters.

The main confusion is between bilateral and unilateral contract offers:

Do not call an ordinary negotiated sale "unilateral" merely because one party has placed an advertisement. A reward-style promise may be unilateral; a sale negotiation for ordinary goods normally expects an exchange of promises and is bilateral.

Counter-Offers, Requests For Information And Termination

Once an offer exists, the next question is whether it was still open at the moment of alleged acceptance. An offer cannot be accepted after it has been rejected, revoked, replaced by a counter-offer or terminated by lapse of time.

In Hyde v Wrench, an attempt to accept the original price after proposing a lower price failed because the counter-offer had rejected the original offer.

A request for information is different. It asks about the offer without rejecting it. In Stevenson v McLean, an inquiry about possible payment terms did not destroy the original offer. The legal consequence is that the offer remains capable of acceptance unless something else terminates it.

Use this distinction operationally:

Offers can also end without a counter-offer:

Application needs a calibrated conclusion. If the facts say "reply by noon", a reply at 12:30 is easy: the offer has lapsed. If the facts say nothing about time, ask what is reasonable: the nature of the subject matter, market movement, perishability, urgency and the parties' previous dealings may all matter.

Acceptance, Communication And Silence

Acceptance completes agreement, but only if it matches the offer exactly.

This is sometimes called the mirror-image idea: a purported acceptance that changes price, delivery, timing, subject matter or another important term is not acceptance but a counter-offer.

The usual rule is that acceptance must be communicated. A contract does not normally form inside the offeree's mind. There must be words or conduct that objectively show assent to the offer. This is why AQA scenario answers should identify the moment of communication: an email sent, a message received, a form signed, an item collected, money paid, or a requested act completed.

Felthouse v Bindley is the core authority for silence. An offeror cannot impose a contract by saying that silence will count as acceptance. If the offeree simply does nothing, there is normally no acceptance. The point is one of autonomy: a person should not be forced into legal obligations by failing to reject an offer.

However, silence and conduct must be separated carefully: