Is an Advertisement an Offer? Why it is, and Why it Matters

Abstract

Courts and scholars uniformly recite the contract law rule familiar to all first-year students: An advertisement is not an offer. The courts and scholars are wrong. An advertisement is an offer. This article explains why the purported rule is not the law, why the actual rule is that an advertisement is an offer, and what this issue tells us about contract law in particular and legal doctrine in general.

As the article describes, virtually all of the case law fails to support the purported rule, the rule is inconsistent with national and state unfair trade practices and consumer protection statutes, and the rule is unsupported by fundamental contract law principles. The article then considers alternative rules and explains why the preferred rule is that an advertisement is an offer. It concludes by broadening the inquiry and considering the role of the traditional rule and the proposed alternative rule as expressions of legal ideology.

Keywords: contract, contract law, advertisement, advertising, offer,consumer law, consumet protection, bait and switch

JEL Classification: D18, M37, K12, K29