Question

An ad in the morning paper reads: Brand new 2012 Ford Escorts $16 499. No payment until January 2012. We make your first payment. This is an example of which of the following?

A) invitation to treat
B) gratuitous promise
C) offer
D) unilateral contract
E) bilateral contract

Answer 1

The ad for new Ford Escorts with a certain price and payment conditions is an invitation to treat, which invites potential buyers to make offers without binding the advertiser.

Step-by-step explanation:

The ad described is an example of an A) invitation to treat. An invitation to treat is an invitation for customers to make an offer, which the advertiser is then free to accept or reject. Unlike an offer, it doesn't bind the advertiser to any contract just because a customer responds to the advertisement. In the scenario described, the ad for Brand new 2012 Ford Escorts at $16,499 with no payment until January 2012 and the dealership making the first payment, constitutes an invitation for potential buyers to come to the dealership and make an offer to purchase a car, but it is not a binding offer itself.