If an ad has a set price. Does that company have to sell it for that advertised price?
1 Answer from Attorneys
Generally not. Normally an advertisement is treated as an invitation to negotiate (usually referred to as an invitation to treat) rather than an offer than becomes binding upon acceptance. The key factor in determining whether a statement is an offer is the intent of the party. In a dispute, the party making the statement has already expressed the view that he or she did not intend for the statement to be an offer that could be accepted. Rather, he or she will insist it is an advertisement. We cannot look inside that person's thoughts to determine whether that is true, so a court will look at the advertisement to determine whether it was intended to be an offer by looking at three factors:
1. It is sufficiently definite in its terms (e.g. descriptions, quality, quantity, & price);
2. It is communicated to a specific person or persons (usually limited group of people);
3. The circumstances surrounding the publication show that the advertiser has the intent to enter into a contract.
It is the difference between a newpaper ad that says, "CAR FOR SALE $500" and the owner telling you directly, "I will sell you this car for $500." The latter would be an offer because it is specific in terms, communicated to a specific person and the circumstances suggest an intent to make a binding sale to you. The newspaper ad is not as specific (we don't know how many cars are for sale or what car it is), it is not communicated to a limited group of people and newspaper ads are almost never intended to be offers.
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