What is public offer in simple words?
Demystifying Public Offers: A Simple Guide to Understanding Public Offers Explained
Unlock the secrets behind public offers with our straightforward guide. Learn what a public offer is in simple terms, grasp the key concepts, and gain insights into the world of investments. Explore the fundamentals without the jargon – your gateway to financial knowledge made easy.
The expression “is not a public offer” is too often found in advertising materials. Why they write this and what it is – we understand in our article. Let’s start with a general concept.
- What can be spelled out in a public offer agreement?
- “Not a public offer” – what does it mean?
- Is the price tag a public offer?
- What is the difference between an offer and a contract?
- How and who can create a public offer?
- The difference between advertising and a public offer
- What is acceptance?
- Who can terminate the offer and how?
Offer – an offer with certain conditions. The conditions are proposed by the provider, and the acceptor accepts them.
Also read: Unlocking the Future of Financial Services Marketing: Emerging Trends and Strategies
Definition of Offer
An offer is a proposal addressed to one or several specific persons, which is sufficiently definite and expresses the intention of the person who made the offer to consider himself to have concluded an agreement with the addressee who will accept the offer.
The offer must contain the essential terms of the contract.
WHAT IS PUBLIC OFFER?
A public offer is an offer of goods in advertising and other public materials, which contains a description of the terms of purchase. It is addressed to an indefinite circle of persons, unlike the usual offer, and encourages people to enter into a contractual relationship.
What can be spelled out in a public offer agreement?
- Tariffs
- Discounts
- Promotional goods
- Promotional prices
- Promo code
- Conditions for participation in the drawing and the like
Real life example:
You picked up the free magazine at the store checkout. Open it and see hundreds of products against a bright background: juice for 15 rubles, tomatoes for 60 rubles, and your favorite sweets for only 99! There is a clarification next to the price in small letters: the promotion will last from December 1-10. Valid as long as the product is in stock.
This is an advertisement that is a public offer. If you come to the store on these dates and find that the product on the shelf is at a different price, you can tell the staff about the mistake and buy it at the price from the magazine. The store will be obliged to do everything according to the law and sell you your favorite sweets for 99 rubles!
A public offer is defined by the Civil Code of the Russian Federation as follows:
An offer of a product in its advertisements, catalogs and product descriptions addressed to an indefinite circle of persons is recognized as a public offer (paragraph 2 of Article 437) if it contains all the essential terms of the retail sale and purchase agreement.
There is another legal definition of a public offer:
Displaying goods at the point of sale (on counters, in showcases, etc.), demonstrating their samples or providing information about the goods being sold (descriptions, catalogs, photographs of goods, etc.) at the point of sale or on the Internet is recognized as a public offer, regardless of whether the price and other material terms of the retail sales contract are indicated, unless the seller has explicitly determined that the relevant goods are not intended for sale.
“Not a public offer” – what does it mean?
This is a phrase that serves as a “safety net” for the advertiser. By attributing this phrase to the advertising offer, he wants to protect himself and be able to change the terms of sale of the goods.
In fact, the phrase “is not a public offer” does not mean anything. The courts say that it will not abolish the obligation for the author to sell the product at the offered price, nor will it oblige the author of the advertisement to sell something if the advertisement does not have all the conditions.
We have included examples of public and non-public offers in the table.
| Public offer | “Not a public offer” |
| A billboard on the road with a photo of chicken legs with a clearly distinguishable brand name. Price 159 rubles / kg. Action time: all June.All conditions are described, a specific product is shown to an indefinite circle of people | A billboard that reads: “All our apartments are 20% cheaper.” The specific product is not specified, the conditions are not clear. |
| There is a sign at the entrance to the cafe: “After 20:00 all pastries are 50% cheaper.” | Advertising of a pharmacy on the radio: “We sell drugs at a wholesale price” |
Is the price tag a public offer?
Yes of course. Precisely because the price tag is a public offer, the store cannot set a new price when paying for goods at the checkout.
What is the difference between an offer and a contract?
An offer is an offer to agree, and a contract is an already implemented offer.
If you imagine the contract in the form of a door, then the offer will serve as a corridor through which you need to go to open the door and become the owner of the goods located behind it.
How and who can create a public offer?
Any person has the right to make a public offer to an indefinite circle of persons. This does not have to be spelled out in the advertisement or announcement, it is enough just to tell the neighbors at the entrance: “I am repairing sinks for 300 rubles from Monday to Friday. Call me and I will come! “.
The difference between advertising and a public offer
In advertising, you can say anything to attract a client and make money. But the public offer obliges the advertiser to say a specific offer: how much, what, when and under what conditions it is being sold.
What is acceptance?
Acceptance is consent to an offer. According to the law of the Civil Code of the Russian Federation, it must be “complete and unconditional.”
Silence is not acceptance. Acceptance is “the performance by the person who received the offer, within the time period established for its acceptance, actions to fulfill the terms of the contract specified in it.”
Who can terminate the offer and how?
You can withdraw the offer or change its conditions only before signing the contract. That is, the signed agreement will have to be changed in the manner prescribed in its terms.
Real-life example:
You stand at the checkout and put items out of the basket. If you want to buy chewing gum for a stock, you reach out to take it, but the seller is ahead of you and changes the price tag. In this case, the public offer has changed and you cannot buy the product using the old offer.
But if the goods are already at the checkout and the saleswoman starts to punch them at a new price, then this is a violation.
FAQ’s
What is a public offer in simple words?
A public offer is when a company invites the public to buy its shares, making them part owners. It’s a way for businesses to raise capital by selling ownership stakes to individuals and institutional investors.
How does a public offer work?
During a public offer, a company issues shares through an initial public offering (IPO) or a follow-on offering. Investors purchase these shares, providing the company with funds for expansion, development, or other financial needs.
Why do companies opt for public offers?
Companies go public to raise capital for growth, increase visibility, and provide liquidity for existing shareholders. It also enables them to use their shares for acquisitions and employee stock options.
What’s the difference between IPO and follow-on offering?
An IPO is the first time a company goes public, issuing new shares to the public. A follow-on offering occurs when a public company issues additional shares after its IPO.
Are public offers only for large companies?
While larger companies often go public, smaller companies can also use public offers to access capital markets. The size and scale of the offering depend on the company’s needs and financial standing.
