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November 16, 2010

Formation of contract – The offer

Writing about web page invitation to treat, revocability

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The English-, French-, as well as the German legal system perceive an offer as a statement of a person’s intention to be legally bound by the sufficiently precised terms of the offer made and thus the intention to contract with the other person.

Surprisingly, disagreements concerning the classification of an invitation to treat, as well as the revocability of an offer exist between the said legal systems.

In English- and German law, advertisements and displays of goods in shops are usually classified as mere invitations to treat/ invitatio ad offerendum.However, the Cour de Cassation considered an offer to the public, including goods displayed on shelves, as a creation of contract, in case of acceptance.Therefore, a customer, whose eye was injured by an exploding bottle at the check-out before it had been paid for, is entitled to sue, as the placing into the purchaser’s basket had been constituted the acceptance.
I take the view that, the “limited stock” argument, as well as the wish of the person, who has placed the advertisement, to keep the final decision whether to conclude a contract, demonstrate reasons against the French opinion.

The Revocability, which is in my opinion inconsistent with the principle of “pacta sunt servanda” and which may implicate insecurity and injustice, can’t be applied in the German System.A violation has no effect to the binding force of an offer.In France an offer in general may be revoked so long as it has not been validly accepted, even though a revocation during a certain period, within the offer should be kept open, (offer avec délai) may give rise to liability in delict.
However, in English law offers are freely revocable before acceptance, which is due to the doctrine of consideration: no binding obligation to keep the offer open can arise without consideration from the offeree.

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