Invitation to Treat

Invitation to treat is a legal term that means that a buyer is signalling their willingness to negotiate with a supplier. The term is relevant to procurement practitioners who issue requests for quotations, proposals or tenders. When the buyer issues the request for offer, the buyer is seeking an offer from the supplier, which the buyer may subsequently accept. This implies that the request for offer issued by the buyer is not itself an offer, but an invitation to the supplier to make the buyer an offer. See also Battle of the Forms and RFx.

In short

An invitation to treat invites offers. It is not an offer itself, so the buyer is not bound just by issuing it.

Why it matters in tenders

Because a request for tender is usually an invitation to treat, the supplier's response is the offer, and a contract forms only when the buyer accepts it. The tender documents can still create obligations. In Hughes Aircraft Systems International v Airservices Australia (1997), the Federal Court found that the request for tender created a process contract that bound Airservices to follow the evaluation process it had published. So say clearly in the tender what you will and will not be bound by, and then follow the process you describe.

Example

A supplier's catalogue price list is an invitation to treat. The buyer's purchase order is the offer, and the supplier's acceptance or delivery forms the contract.