Indian Contract Act : Complicated query

This query is : Resolved

s.lohani (Querist)
Follow

06 May 2008 How does the foolowing instances amount to "invitaion to offer" and not an "(generAl) offer"?

A)A price list of goods for sale
B) Quoataion for lowest prices
c) Railway Time-table
d) Display of goods with price tag attached
e) Prospectus issued by a Company

in the refercnce book of MP Vijaykumar; these has been told as "invitation to make offer". My view is exactly the opposite.

For instance, in CASE A): the shopkeeper by keeping his Pricelist to the prospective customers is making an offer: in the list there is a Pen for Rs 10. Those who are in need of the pen and think the price is fair enough; wiill go to the shopkeeper and ACCEPT the (general) offer by paying him the Rs 10. And if he bargains; that is a counter offer.

Had he just dispalyed his goods at the window without any price tag; and sb comes and tells him " Sir, i wanna buy that BOOK for Rs 100" that should be an invitation to offer, isn't it??

CA. Yayati Tyagi

CA. Yayati Tyagi (Expert)
Follow

07 May 2008 first i quote :

Rules: The following are important rules of an offer: -
♦ Must be capable of creating legal relation.
♦ Must be certain, definite and not vogue.
♦ May be expressed or implied.
♦ May be general or specific.
♦ Must be communicated.

Offer and an Invitation to an offer

An offer is definite and capable of converting an intention into a contract. Where as, an invitationto an offer is only a circulation of an offer, it is an attempt to induce offers and precedes a definiteoffer. Acceptance of an invitation to an offer does not result contract and only an offer emerges inthe process of negotiation.

As you see, offer should be definitive and should not be vogue. In your examples:

a) price list is not an offer to sell because it just show the price per unit, it does not tell how much quantity is being offered and whether it is in stock, means basic rule "whether seller wants to sell and how much" is not clear,

b) same to e). only difference is that in e) you win if you bid highest (or at cut-off) and in b)you win if you bid lowest, means you are invited to bid,

c) somewhat same to a). Time table is just a info of product (trains) and that will be there even if no reservation is available, at that time railway doesn't intend to sell tickets, you have to ask if ticket is available, also it does not tell quantity being offered,

d) somewhat same to a). even if product is displayed it may not be available to sale at that time (as may be defective piece or already sold and also usally we ask for fresh piece),

e) prospectus is an offer, but not offer for sale, it is an offer to bid. share is a commodity which generally runs in shortage at the time of IPO, you have to bid for the shares at price of your choice but you don't know whether company is ready to sell you at this price. so, it is actually you who is making offer to buy.

you see, in all these example terms of offer and intention to sell is generally not clear as well as product may be unavailable. you have to ask if seller has stock and wants to sell your choice of quantity now or at agreed time, means you make offer to buy.

i hope now you will be finding a complecated query very simple.