An advertisement promising a free item to the next purchaser is typically interpreted as what?

• A. A binding offer to provide a free product.
• B. A general advertisement that is not an offer.
• C. A binding contract that triggers upon performance.
• D. A counteroffer.

Answer: (B)

The idea tested is that advertisements are generally invitations to negotiate, not binding offers. An ad promising a free item to the next purchaser isn’t definite enough to be a contract on its own: it doesn’t specify exactly who qualifies, how many free items are available, or clear terms that would bind the seller. Because it invites action from multiple potential buyers and leaves the exact promise to future events, no contract is formed merely by publishing the ad. A binding offer would need clearer, definite terms, and a unilateral contract could arise only if the terms were specific and performance by a particular person could be unequivocally accepted, which isn’t the case here.