Invitation to offer Offer, According to Indian contract act 1872 defines “offer” offer ” in sec-2 (a) “When a person signifies to another his willingness to do or abstain from doing anything, with a view to obtaining the assent of that other to such act or abstinence, he is said to make a proposal”.
According to Waddams “Manifestations of a willingness to be bound by contract” contract ” . According to Fridman“Signification by one person to another person of his willingness to enter into a contract with him on certain terms”. According to Treitel“Expression of willingness to contract on certain terms with the intention that it shall become binding as soon as it is accepted by the person to whom it is addressed”.
•
UNILATERAL
CONTRACTS: a promise on one side exchanged for an act or a
forbearance on the other side (e.g. a promise to pay commission to an estate agent if he finds a buyer for the seller‟s house); only one party, the promisor, is bound to do anything •
BILATERAL
CONTRACTS: A promise or set of promises, on one side is exchanged
for a promise or a set of promises on the other side (e.g. contracts of sale); both parties are equally bound to the performance of their promises. Offers can be of two types:Specific – made to one person or group of people. Then only that particular person or group of people can accept.
General – made to „the whole world‟ (or people generally),
particularly seen in the
cases of rewards and other public advertisements. The various ways in which an offer may terminate:-
E.g. a says to b that he is willing to sell his z horses for one thousand rupees here, a proposal to sell his horse. Importance of offer:Offer is the one of the most important part of the contract, and it‟s also essential for establishing a contract. Offer is the first step or the starting part of the contract. When one party makes an offer to another, he signifies his willingness to do or not to do something, so that he can obtain assent of the other party in doing or not doing such act. So, therefore it is the first step of the contract. One of the essential of agreement:A proposal and its acceptance is the universally acknowledged process for the making of an agreement. The proposal is the starting point sec 2 (a) defines:“When a person signifies to another his willingness to do or abstain from doing anything, with a view to obtaining the assent of that other to such act or abstinence, he is said to make a proposal”.
The person who makes the proposal is called the promisor or “offeror” the person to whom it is made is called the propose or “offeree” when he accepts it, he is called a promisee . In the terminology terminology of sec 2(c) a person making the proposal is is called promisor and the person making the proposal is called promisee. In view of above definition a proposal in the first place an expression of the offeror‟s willingness to do or to abstain from doing something. Secondly, it should be made with a view to obtaining the assent of the offeree to the proposal act or abstinence. a bstinence. Meaning of invitation of offer:Invitation to treat (or invitation to bargain in the United States) is a contract law term. It
comes from the Latin phrase invitatio ad offerendum and means "inviting an offer". Or as Andrew Burrows writes, an invitation to treat is"an expression of willingness to negotiate. A person making an invitation to treat does not intend to be bound as soon as it is accepted by the person to whom the statement is addressed." Contract lawyers distinguish this from a binding offer, which can be accepted to form a contract (subject to other conditions being met). The distinction between an offer and invitation to treat is best understood through the categories that the courts create. Invitations to treat include the display of goods; the advertisement of a price or an auction; and an invitation for tenders (or competitive bids). There may however be statutory or complementary obligations, so consumer protection laws prohibit misleading advertising and at auctions without reserve there is always a duty to sell to the highest bona fide bidder.
INVITATION TO TREAT: an invitation to a party to make an offer:-
Price quotation: does not amount to an offer, but merely to an invitation to treat (invitation to
the potential buyer to make an offer ( Canadian Dyers Assn’n Ltd. v. Burton (1920) 47 O.L.R. 259 relying on the leading English case Harvey v. Facey [1893] A.C. 552)
Exposing goods to the general public: does not amount to an offer but to an invitation to the
public to buy goods (goods in self-service store: Pharmaceutical Society of G.B. v. Boots [1953] 1 Q.B. 401 (C.A.); Auctions: the general rule is that putting up goods for sale is not an offer but an invitation to
bidders to make offers. The owner of the goods (an auctioneer) signifies his acceptance by fall of the hammer. Consequence: the bidder may withdraw his/her bid and the auctioneer may withdraw the goods anytime after the auction starts but before the fall of the hammer (Payne v. Cave (1789) 3 T.R. 148, 100 E.R. 502). Where there is the auction without reserve it has been held that the auctioneer is liable for not accepting the highest bid (Warlow v. Harrison (1859) 1 El. & El. 309, 120 E.R. 925) Difference between offer & invitation to offer;-
a) Traditional view:
The invitation to tender is not an offer but an invitation to potential tenderers to make offers; an offer is made by tenderers. The contract will be formed when the owner accepts the favored tender. The tender, as a response to the invitation, may be revoked at any time prior to acceptance and the tenderer is not bound by until the tender is accepted. The owner is not bound to accept any tender (since there is no contract there cannot be any contractual obligation neither) and the owner cannot therefore be contractually liable to unsuccessful tenderers. b) Modern view:
The invitation to tender, if made in appropriate terms (such as that an accompanying deposit would be forfeited if the tender were withdrawn) can be an offer to contract which becomes a binding contract upon submission of a tender in conformity with the invitation to tender (R. v. Ron Engineering (1981) 119 D.L.R. (3d) 267, [1981] 1 S.C.R. 111). This contract is called Contract A and it should be distinguished from Contract B (construction contract), which is intended to result from the submission of tenders (Estey J. in R. v. Ron Engineering)
The tenderer may not withdraw from his tender and the owner owes a general duty of care to treat all bidders fairly (Estey J. in R. v. Ron Engineering) Whether Contract A arises and whether the irrevocability of the tender is one of its terms depends on the terms and conditions of the tender call and the intention of the parties (M.J.B. th
Enterprises Ltd. v. Defence Construction (1951) Ltd (1999) 170 D.L.R. (4 577 (S.C.C.)). In other words, the Ron Engineering could not be interpreted as meaning that in every instance Contract A is formed on the submission of a tender not that a term of that contract is the irrevocability of the tender (M.J.B. Enterprises Ltd. v. Defence Construction (1951) Ltd th
(1999) 170 D.L.R. (4 577 (S.C.C.)); the submission of the tender is good consideration for the owner’s promise, as the tender is a benefit to the owner, prepared at a not insignificant costs to the appellant, and accompanied by the bid security The effect of the “privilege clause”: it does not override the obligation of the owner to accept only compliant bids (M.J.B. Enterprises Ltd. v. Defence Construction (1951) Ltd. Case skills:Pharmaceutical Society of Great Britain v. Boots Cash Chemists (Southern) Ltd. Facts
Boots Cash Chemists had just instituted a new method for its customers to buy certain medicines. The company would let shoppers pick drugs off the shelves in the chemist and then pay for them at the till. Before then, all medicines were stored behind a counter and an assistant had to get what was requested. The Pharmaceutical Society of Great Britain objected and argued that under the Pharmacy and Poisons Act 1933, that was an unlawful practice. Under s 18(1), a pharmacist needed to supervise at the point where "the sale is effected" when the product was one listed on the 1933 Act's schedule of poisons. The Society argued that displays of goods were an "offer" and when a shopper selected and put the drugs into their shopping basket, that was an "acceptance". Therefore because no pharmacist had supervised the transaction at this point, Boots was in breach of the Act. Boots argued that the sale was effected only at the till.
Judgment
Both the Queen's Bench Division of the High Court and the Court of Appeal sided with Boots. They held that the display of goods was not an offer. Rather, by placing the goods into the basket, it was the customer that made the offer to buy the goods. This offer could be either accepted or rejected by the pharmacist at the cash desk. The moment of the completion of contract was at the cash desk, in the presence of the supervising pharmacist. Therefore, there was no violation of the Act. Somervell LJ said,
“
Whether that is a right view depends on what are the legal implications of this layout, the invitation to the customer. 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 — and a bookseller organized way of doing what is done already in many types of shops — and 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 shopkeeper or someone on his behalf accepts that offer. Then the contract is completed. I can see no reason at all, that being I think clearly the normal position, for drawing any different implication as a result of this layout. The Lord Chief Justice, I think, expressed one of the most formidable difficulties in the way of the suggestion when he pointed out that, if the Plaintiffs are right, once an article has been placed in the receptacle the customer himself is bound and he would have no right without paying for the first article to substitute an article which he saw later of the same kind and which he perhaps preferred. I can see no reason for implying from this arrangement which the Defendants
”
have referred to any implication other than that which the Lord Chief Justice found in it, namely, that it is a convenient method of enabling customers to see what there is and choose and possibly put back and substitute articles which they wish to have and then go up to the cashier and offers to buy what they have so far chosen. On that conclusion the case fails, because it is admitted that then there was supervision in the sense required by the Act and at the appropriate moment of time. For these reasons, in my opinion, the appeal should be dismissed.
Birkett LJ followed on by saying,
“
The short point of the matter was, at what point of time did the sale in this particular shop at Edgware take place? My Lord has explained the system which has been introduced into that shop (and possibly other shops since) in March 1951. The two ladies in this case, Miss Mainwaring and Miss Marrable, who went into that shop, each took a particular package containing poison from the particular shelf, put it into their basket, came to the exit and there paid. It is said upon the one hand that when the customer takes the package from the poison section and puts it into her basket the sale there and then takes place, On the other hand, it is said the sale does not take place until that customer who has placed that package in the basket comes to the exit. The Lord Chief Justice dealt with the matter in this way, and I would like to adopt these words: "It seems to me therefore, applying common sense to this class of transaction, there is no difference merely because a self-service is advertised. It is no different really from the normal transaction in a shop. I am quite satisfied it would be wrong to say the shopkeeper is making an offer to sell every article in the shop to any person who might come in and that he can insist by saying 'I accept your offer'". Then he goes on to deal with the illustration of the bookshop and continues: "Therefore, in my opinion, the mere fact that a customer picks up a bottle of medicine from
the shelves in this case does not amount to an acceptance of an offer to sell. It is an offer by the customer to buy. I daresay this case is one of great importance, it is quite a proper case for the Pharmaceutical Society to bring, but I think I am bound to say in this case the sale was made under the supervision of a pharmacist. By using the words 'The sale is effected by, or under the supervision of, a registered pharmacist', it seems to me the sale might be effected by somebody not a pharmacist. If it be under the supervision of a pharmacist, the pharmacist can say 'You cannot have that. That contains poison'. In this case I decide, first that there is no sale effected merely by the purchaser taking up the article. There is no sale until the buyer's offer to buy is accepted by the acceptance of the money, and that takes place under the supervision of a pharmacist. And in any case, I think, even if I am wrong in the view I have taken of when the offer is accepted, the sale is by or under the supervision of a pharmacist". I agree with that and I agree that this appeal ought to be dismissed.
