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Contract law: invitations to treat (1)

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A contract is formed where there is an offer, an acceptance, consideration and an intention to be bound. An invitation to treat, on the other hand, is merely an invitation for customers to submit an offer. While it indicates a willingness to deal, it is distinguishable from an offer in that it lacks an intention to be bound. Similar to an invitation to bid in the public procurement process, invitations to treat (sometimes referred to as invitations to bargain) often arise in the context of pre-contractual negotiations, advertisements and store displays. In some jurisdictions, however, advertisements and displays may be treated as offers which constitute unilateral contracts.

Generally, an invitation to bid (ITB) for a contract constitutes an invitation to treat. These may also be variously called: an invitation to tender, a request for bids, or a request for proposals. In essence, all these terms describe an invitation to prospective suppliers of goods or services to submit a bid. The invitation to bid is simply a solicitation, and does not qualify as an offer because the party making it does not wish to enter into a binding contract without further negotiations. Generally, the party making the invitation solicits bids or tenders for specific goods and/or services from qualified and capable suppliers. Any subsequent bids are deemed to be offers which the party who issued the invitation to bid may accept or reject.

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