Is it an 'Offer' or 'Invitation To Treat' that is the question?

[Exconsumercardo]

I have seen an item for sale on a well known internet website. A competitor of the said website has a business model whereby they will undercut the price of goods that are being sold on the well known website.

 

In order to get the lower price from the competitor, you would have to make a 'demand' on their website by copying and pasting the link to the advertised goods on the well known internet site,

 

You then have to wait for the competitor to make you an 'offer' to buy the goods at a lower price. You have a limited number of hours to accept or decline the 'offer'.

 

If I accepted the 'offer' and paid for the item within the 'offer time'! In contract law, would this be an 'offer' or 'invitation to treat'?

 

Thank you

[leonmassey]

An invitation to treat is when the seller lists a price for an item it is selling. The offer is what you then make whether that be the full asking price of the seller or not.

[BazzaS]

The key concept is "paid".

Regardless of if it was an "offer" or mere "invitation to treat",

The contract is formed when they accept your payment (given that payment is made for the consideration, the supply of the goods or service).

 

The issue may be affected by how you "paid".

If you plonked cash down on a counter, and they took it, you've paid.

If you provided your card details things may be less clear : have they processed the payment??

Have they a term in their T's & C's regarding when 'payment' is deemed to occur?

Has a debit for the sum appeared on your card account?

[sequenci]

The key concept is "paid".

Regardless of if it was an "offer" or mere "invitation to treat",

The contract is formed when they accept your payment (given that payment is made for the consideration, the supply of the goods or service).

 

The issue may be affected by how you "paid".

If you plonked cash down on a counter, and they took it, you've paid.

If you provided your card details things may be less clear : have they processed the payment??

Have they a term in their T's & C's regarding when 'payment' is deemed to occur?

Has a debit for the sum appeared on your card account?

 

Also it might be worth considering that the contract could be broken if it is clear there was a 'mistake' made - for example if the wrong price was obviously advertised.

[steampowered]

If the competitor intends for both parties to be immediately bound when you accept their offer and make payment, I would think that should be treated as an offer, subject to what is stated in the T&Cs.

 

If the T&Cs are properly drafted they will displace the basic contract law analysis. For example, when you order an item from Amazon, the T&Cs say your payment is treated as an offer. Your offer is only accepted by Amazon actually despatching the goods: legally, even when you make payment that is not enough to finalise the contract. There is likely a similar provision to the T&Cs here. The T&Cs may also give the competitor a right to cancel the contract and refund your payment in its sole discretion.

[BazzaS]

If the competitor intends for both parties to be immediately bound when you accept their offer and make payment, I would think that should be treated as an offer, subject to what is stated in the T&Cs.

 

If the T&Cs are properly drafted they will displace the basic contract law analysis. For example, when you order an item from Amazon, the T&Cs say your payment is treated as an offer. Your offer is only accepted by Amazon actually despatching the goods: legally, even when you make payment that is not enough to finalise the contract. There is likely a similar provision to the T&Cs here. The T&Cs may also give the competitor a right to cancel the contract and refund your payment in its sole discretion.

 

 

Amazon only charge your card on despatch of the item.

This allows them to state that you providing your card details isn't "payment", only an offer to pay.

This allows them to have their Term that the contract isn't formed until payment is taken, when the item is despatched. Thus their T's & C's don't contradict existing contract law.

 

As for "give the competitor a right to cancel the contract and refund your payment in its sole discretion" : once the contract is formed (such as payment taken) it'd be hard pushed for the retailer to force this term as over-riding extant contract law.

[steampowered]

Amazon only charge your card on despatch of the item.

This allows them to state that you providing your card details isn't "payment", only an offer to pay.

This allows them to have their Term that the contract isn't formed until payment is taken, when the item is despatched. Thus their T's & C's don't contradict existing contract law.

 

As for "give the competitor a right to cancel the contract and refund your payment in its sole discretion" : once the contract is formed (such as payment taken) it'd be hard pushed for the retailer to force this term as over-riding extant contract law.

 

Amazon's T&Cs provide as follows. It seems that contract formation is dependent upon despatch of goods rather than payment taken:

 

Your order is an offer to Amazon to buy the product(s) in your order. When you place an order to purchase a product from Amazon, we will send you an e-mail confirming receipt of your order and containing the details of your order (the "Order Confirmation E-mail"). The Order Confirmation E-mail is acknowledgement that we have received your order, and does not confirm acceptance of your offer to buy the product(s) ordered. We only accept your offer, and conclude the contract of sale for a product ordered by you, when we dispatch the product to you and send e-mail confirmation to you that we've dispatched the product to you

 

There is no general cancellation right, but they do have a cancellation right for incorrect pricing. This goes far beyond the common law of mistake, as Amazon's cancellation right applies to all pricing mistakes not just very obvious pricing mistakes:

 

Despite our best efforts, a small number of the items in our catalogue may be mispriced. We will verify pricing when processing your order and before we take payment. If we have made a mistake and a product's correct price is higher than the price on the website, we may either contact you before shipping to request whether you want to buy the product at the correct price or cancel your order. If a product's correct price is lower than our stated price, we will charge the lower amount and send you the product.

[ericsbrother]

Technically it would be called a frustrated contract. A simple example is where you pay for something and they have run out of stock and refund you. You cannot force them to send you what they dont have.

[BazzaS]

Technically it would be called a frustrated contract. A simple example is where you pay for something and they have run out of stock and refund you. You cannot force them to send you what they dont have.

 

" You cannot force them to send you what they dont have"

True, but you can seek redress for "loss of bargain" if the contract was formed, they took your money, then broke the contract, and you end up out of pocket as a result of having to source exactly the same goods / service from an alternative (and more expensive ) supplier.

 

They shouldn't offer for sale AND take payment for items they have run out of stock of. They can issue an "offer to treat", but shouldn't take payment if they can't supply the consideration that is being paid for.

Edited October 2, 2013 by BazzaS

[Exconsumercardo]

A big thanks to all of you for taking time to respond.

 

If anybody else has anything further to add, please feel free to leave your comments.

 

Best wishes