E-Commerce Offer Vs Invitation To Treat

Q1) Consider the legal status of Web advert and whether it would amount to an offer in law;

Q2) If so, consider whether the filling in of the" buy now" form amounted to an acceptance of the offer;

Q3) Outline the consumer buyer's rights under the Distance Selling Regulations as they may apply to this sale.

In this assignment I must conclude whether the advert from Surjit's website constitutes a lawful offer or an Invitation to Treat. I will test this by comparing the two alternatives and assessing which is more applicable to the case study.

Offer V Invitation to Treat

To establish the difference between an offer by an organisation or if it is advertising an Invitation to Treat is whether the advert can be likened to that of a shop window or a ticket case. Ticket cases are in reference to ticket sales like those in rail stations and car parks an ideal example of this is Thornton v Shoe Lane Parking Ltd 1971. In this case it was the first time the claimant had been to an automated car park and was issued a ticket, which he had to purchase before the terms and conditions were shown for Thornton's acceptance. The court stated that it is illegal to add terms and conditions once the contract had been accepted and that the ticket was the acceptance of the offer.

The general rule for website advertisements is that they are an invitation to treat and not offers. This is due 3 main general factors that sellers must consider when selling goods. Websites can be likened to shop windows, where products need to be contractually controlled. 1, someone under the age of 16 is unable to purchase tobacco products in a shop, as the seller would be breaking the law. The same can be said for websites selling adult material as the seller cannot present that content to underage consumers. This case is best shown by PSGB v. Boots where the court dealt with drugs that should be bought over the counter as they are not fit for just any consumer of any age. 2, a degree of negotiations need to be implemented as to when and where issues like the delivery of products should take place for example. An example of this miscommunication of delivery details and what it can do for the business is expressed in Bowes v Shand 1877. Where the sale of rice was early and the consumer was not held liable for the product. 3, the limitation of stock as shops like the camera store in the case study, the seller can only provide what they have. They may have to rely on their supply chain to complete the order, which could hold them liable for the price differences paid elsewhere for the product.

These 3 factors acknowledged I believe it logical to accept that the website advert was an invitation to treat and not an actual offer. The consumers acknowledged the invitation to treat and the "buy now" form amounted to an offer by the consumer. For websites without the seller's confirmation or acceptance, the performance would never be delivered; completing the order page is commonly the offer. Once acceptance from the seller to the consumer is sent they are then bound to the contract. This then would implement acceptance as done by delivery.

This is very biased towards companies and unfair on the consumer. Argos in 1999 advertised on their website televisions for L2.99. Customers had placed orders for the televisions at this stipulated price, which Argos was unwilling to then sell at. This issue was settled out of court due to adverse publicity, but Argos now stipulate that the confirmation stage, the final stage of creating a binding contract, for their website business sets out the final details of each order and that they then will email consumers an acknowledgement of ordered products, which is not an order confirmation or order acceptance by the company. Many lawyers that studied the terms stated "there was no obvious reason why Argo's site should be exempt from regulations requiring retailers to sell at the price displayed." (www.bbc.co.uk.) As an offer Surjit could be likened to that of the Argos T.V. sales dispute. The on-line camera store case study advert clearly states "Offer for sale! Brand new Canon 30D digital SLR camera with 17-55mm zoom lens, battery and charger L5." but as this never reached the court, it would imply that Argos realised that they were at fault and looked to amend it, this would also be so for Surjit. As a general rule of offer and acceptance I believe that the advertisement on Surjit's website was an invitation to treat. This is due to that he has not confirmed sales to the consumers or accepted the offer. To then consider whether the "buy now" form amounted to an acceptance of the offer, we must address if the general rule for acceptance or the postal rule applies. The general rule applies to methods of communication that are not made by post and are instantaneous. The general rule states that acceptance is made when the communication is received by the offeror. In this sense the "buy now" form would amount to an acceptance, but the postal rule states that the acceptance applies once the communication is made to the postal service. As email is not instantaneous and this is the method of acknowledgement Surjit would have received once the "buy now" forms were completed the general rule should not be applied. To apply the postal rule would make commercial sense as the receive date and time cannot be proved, yet the dispatched date can. This would allow companies to change the price of products during the time that the acceptance was being delivered. If the postal rule is applied to internet sales like this with Surjit there is no room for price speculation. With the website concluded as an invitation to treat, the "buy now" form would not amount to an offer as the consumer is accepting the invitation to treat by selecting this form. To then complete the form would amount to confirmation of negotiations by the consumer but not acceptance of sale. At which Surjit can refuse the sale of the cameras.

Surjit has not specifically stated that the sales offer was an invitation to treat. This could prove a huge problem for him because websites have not been tested against the three stage rule in the U.K of invitation to treat, offer and acceptance. It could therefore be easily argued that Surjit is bound by a contract as it seems Argos believed they might have been. The fact that Argos settled out of court raises suspicion. If the case study is to be accepted as an established offer, then Surjit would have to comply with the Distance Selling Regulations 2000 (DSR 2000). These regulations are to protect consumers by insisting that influential information is supplied to customer before and