Spencer v Harding [1870]

Spencer v Harding [1870] LR 5 CP 561 concerned whether a circular inviting tenders for the purchase of stock constituted a binding offer or was merely an invitation to treat. The defendants sent out a circular offering the stock of Messrs G Eilbeck & Co for sale by tender. The circular stated that the stock would be sold at a discount in one lot, with payment to be made in cash. Tenders were to be received and opened at the defendants' offices on a specified date.

The claimants submitted the highest tender but were refused the purchase of the stock by the defendants. The central question was whether the circular issued by the defendants amounted to a binding offer capable of acceptance or if it was an invitation to treat.

The court, with Willes J delivering the judgment, held that the circular was not a binding offer but an invitation to gather tenders. Willes J emphasised that the absence of specific wording, such as a commitment to sell to the highest bidder, indicated that the defendants did not intend to be bound by a contract. The circular was viewed as an invitation for others to make offers, and the defendants were entitled to act on the tenders received.

The decision established the principle that an invitation to submit tenders does not, in itself, constitute a binding offer. Instead, it is an invitation to others to make offers, and the party issuing the invitation is not obligated to accept any particular offer. The case clarified the distinction between an offer and an invitation to treat in contract law.