What makes a price tagged item on a shelf an invitation to treat, rather than an offer of sale?

Question

Contrast the counter intuitive treatment in law of a store displaying stock on its shelves, with the much more common sensical treatment of a poster for an auction.

In an auction the stock may be particularly advertised while the prices are understood to remain to be determined. In a shop, the items are already specified, as are their prices on the tags underneath them. All the terms of the contract have already been set by the vendor such as to suit it, with the only thing remaining missing being a willing buyer. When one is so enticed by the advertised terms as to approach the store’s till with desired items in hand, why is this an offer to contract rather than a final acceptance of an offer previously promulgated by the seller by displaying their stock with specified sale prices? Why are the displays of prices retractable invitations to treat rather that offers of sale in themselves?

Answer 1

switzerland

This answer is mostly to point out that the situation isn't so obvious, and may greatly differ between jurisdictions.

OR Art 7 specifies:

2 The sending of tariffs, price lists and the like does not constitute an offer.

3 By contrast, the display of merchandise with an indication of its price does generally constitute an offer.

So the seller is bound to the price tag of an item in a shelf or in a window. If the prices differ, the customer can generally request the lower price, unless the seller can clearly show that there was a significant error. There's a separate law ("Preisbekanntgabeverordnung") that specifies that (under most circumstances) a shop must put price tags on their items.

What margin constitutes an error is disputable. The federal court ruled that an offer for an opal ring for 1380 Francs instead of 13800 could be considered an error. But a T-Shirt that is offered for 20 Francs in the shop window but 25 Francs on the shelf is probably not.

Answer 2

See Pharmaceutical Society of Great Britain v Boots Cash Chemists (Southern) Ltd. [1953] EWCA Civ 6 (05 February 1953). There were several sets of reasons in agreement, but I highlight the crux of the reasoning from Somerville L.J.

Is it to be regarded as an offer which is completed and both sides bound when the article is put into the receptacle, or is it to be regarded as a more organised way of doing what is done already in many types of shops — and a bookseller is perhaps the beat example - namely, enabling customers to have free access to what is in the shop to look at the different articles and then, ultimately, having got the ones which they wish to buy, coming up to the assistant and saying "I want this"? The assistant in 999 times out of 1,000 says "That is all right", and the money passes and the transaction is completed. I agree entirely with what the Lord Chief Justice says and the reasons he gives for his conclusion that in the case of the ordinary shop, although goods are displayed and it is intended that customers should go and choose what they want, the contract is not completed until, the customer having indicated the articles which he needs, the shop-keeper or someone on his behalf accepts that offer. Then the contract is completed.

The alternative seems wholly absurd. As Romer L.J. describes (and rejects) the alternative:

if a person picked up an article, once having picked it up, he would never be able to put it back and say he had changed his mind. The shopkeeper would say: "No, the property has passed and you will have to pay".