26. Preliminary Negotiations


A manifestation of willingness to enter into a bargain is not an offer if the person to whom it is addressed knows or has reason to know that the person making it does not intend to conclude a bargain until he has made a further manifestation of assent.


a. Interpretation of proposals for exchange. The rule stated in this Section is a special application of the definition in 24 and of the principles governing the interpretation of manifestations of assent. See 20 and Chapter 9. Conduct which resembles an offer may not be so intended either because there is an intent not to affect legal relations (see 18), or because the actor does not intend to engage in the conduct (see 19), or because the proposal is not addressed to the recipient or is not received by the addressee (see 23), or because the proposal contemplates a gift rather than a bargain (see Comment b to 24). This Section deals rather with the case where the actor intends to make a bargain in the future, but only if he makes some further manifestation of assent. If the addressee of a proposal has reason to know that no offer is intended, there is no offer even though he understands it to be an offer. "Reason to know" depends not only on the words or other conduct, but also on the circumstances, including previous communications of the parties and the usages of their community or line of business.

b. Advertising. Business enterprises commonly secure general publicity for the goods or services they supply or purchase. Advertisements of goods by display, sign, handbill, newspaper, radio or television are not ordinarily intended or understood as offers to sell. The same is true of catalogues, price lists and circulars, even though the terms of suggested bargains may be stated in some detail. It is of course possible to make an offer by an advertisement directed to the general public (see 29), but there must ordinarily be some language of commitment or some invitation to take action without further communication.