The customer responding to it makes the offer
A worked RES examination question on offer and acceptance, from our Paper 1 bank — with the rule it turns on, and why each of the four options is right or wrong.
The question
On a Saturday morning a developer's advertisement in the newspaper sets out a launch price for a two-bedroom unit. Mr Selamat clips the advertisement, attends the showflat, and tells the sales staff he accepts the advertised price and wishes to proceed. He is told the unit has gone and that remaining units are priced higher. He says a contract was formed the moment he accepted the advertised terms.
Consider the following statements.
- (i) The advertisement was an invitation to treat rather than an offer.
- (ii) Mr Selamat's statement at the showflat was the offer.
- (iii) A contract was formed when Mr Selamat accepted the advertised price.
- (iv) The developer remained free to accept or decline what Mr Selamat said.
The answer, and why
Answer: B
The rule. An advertisement is an invitation to treat, not an offer. The customer responding to it makes the offer, which the advertiser is free to accept or decline.
Why B is correct. (i) the advertisement invited approaches; (ii) Mr Selamat's statement was the offer; (iv) the developer could decline it. (iii) is false — nothing was concluded by his purporting to accept.
The other options.
- A and D carry the false (iii), which is Mr Selamat's own position and the intuitive one: a price was published, he agreed to it, so surely there is a bargain.
- C drops the correct (i), the proposition the whole analysis rests on.
Exam note. An advertisement cannot be "accepted" into a contract. Identify who made the offer before asking whether it was accepted.
More on Offer and acceptance
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