Is an Advertisement an Offer?
Advertisements bombard us from all sides: the Internet, billboards, print ads, and television. They often claim to sell the best products, provide the best service, and have the lowest prices. But are these the beginnings of contracts? Generally, the answer is "no," even though advertisers may be held liable for untruthful messaging in their ads.
In a practical sense, this means advertisers must be able to back up any specific claims made about their product or service. So while a company may make certain claims about its offerings -- and any specific claims must be provable -- they are not being offered in any contractual sense. Below is a brief overview of advertisements in the context of contract law.
Offer and Acceptance: The Basics of Contracts
First, a brief review of contract law. In order to be valid and legally enforceable, contracts must show that the two parties agreed on its terms without duress and involve an exchange of consideration (something of value). The parties can show that they agreed on the terms of the contract by demonstrating that there was an offer and acceptance. There is no set formula for offer and acceptance; contract law allows people to use whatever format they wish. Although this means oral contracts are theoretically valid, they are very difficult to prove in a court of law.
Once these elements (and the element of "consideration") are in place -- the affirmative acceptance of an offer -- the contract is considered legally enforceable. This means that if one party does not perform as stated in the contract, the other can sue for money damages, or to get a court to force the breaching party to perform. Parties also may choose to resolve a contractual dispute in mediation or arbitration, which are forms of alternative dispute resolution.
Advertisements Are Not Offers
Generally, courts do not consider advertisements offers. Instead, they are an invitation to begin negotiations. This makes practical sense. Consider: if advertisements were offers, someone who saw an advertisement for "Delicious Apples" could say: "I accept your offer to purchase delicious apples, and if they aren't delicious, I'll sue!" No one would be able to conduct business or advertise products.
Still, an advertiser cannot make wild claims about its products. In general, advertisements must be true, or at least have a reasonable basis in fact. Also, advertisers may not be deceptive by using what are commonly called "bait and switch" tactics, in which an ad entices consumers and then tries to "switch" them to another product by, for example, intentionally not stocking enough of the promoted items.
Get Legal Professional Help Before You Advertise
Advertisements and contractual offers may be quite different from a legal standpoint, but often intersect in the business world. It pays to make sure you fully understand what you are offering, while complying with all applicable state, federal, and local laws. If you are at all concerned about what constitutes offer and acceptance, a local business and commercial law attorney can provide guidance on how to form a lasting, valid contract.
See FindLaw's Contract Law section to learn more.