What best describes the distinction between an offer and an invitation to treat?

• A. An offer is a definite promise capable of immediate acceptance; an invitation to treat invites negotiations.
• B. An invitation to treat is binding once communicated.
• C. A counter-offer is the same as an offer.
• D. All advertisements are offers.

Answer: (A)

The distinction hinges on when a communication creates a binding obligation. An offer is a definite promise that, once communicated, can be accepted to form a contract immediately on the stated terms. An invitation to treat, on the other hand, invites others to make offers and does not bind the party making the invitation. For example, a shop window display or a price-tagged item is typically treated as an invitation to treat, not an offer, because it invites customers to submit offers to buy at those terms. Ads are usually invitations to treat as well, unless they clearly promise to be bound on specific terms. Therefore, the best description is that an offer is a definite promise capable of immediate acceptance, whereas an invitation to treat invites negotiations.