OFFER AND INVITATION TO TREAT (OFFER)
When a person makes some statement or give some information with a view to- inviting others to make offers on that basis, such statement or information is called an invitation to offer and it is different from “offer” itself .
For example, sending catalogue of books-indicating prices of various books , inviting persons to an auction, where goods to be auctioned are displayed, and the advertisement calling for tenders is not a proposal or offer but merely an invitation to offer .
An advertisement by the auctioneer to sell goods by an auction being an invitation to treat rather than an offer, anauctioneer is free to cancel an auction sale announced by him.
HARIS V. NICKERSON, 3(1873) L.R ,8 Q.B. 286,
The defendant advertised a sale by auction. The plaintiff traveled to the advertised place of auction to find that the defendant had cancelled the auction sale. He brought an action against the defendant to recover the expenses of his travel.
It was held that he was not entitled to the same as there was as yet no contract between the two parties,which could make the defendant liable.
PHARMACEUTICAL SOCIETY OF GREAT BRITAIN V. BOOTS CASH CHEMISTS LTD.,4(1952),2 Q.B.795)
When the goods are displayed either in a show-window or inside the shop and such goods bear price-tags, that amounts to an invitation offer to sell goods at prices mentioned on the price tags. if an intending buyer is willing to purchase the goods at a price mentioned on the tag. he makes an offer to buy the goods. The shopkeeper has the option to accept the offer or reject the same. The contract will arise only when the offer is accepted. No customer can force the shopkeeper to sell the goods at the price mentioned on the tag.
In the above stated case, the defendants were having the business of retail sale of drugs.Medicines were displayed on the shelves and their-retail prices-were also indicated. They had "self-service" system. On entry into the shop a customer was given a wire basket. After selecting the articles needed by a customer he could put them in the basket and take them to the cash desk.The defendants had put a registered pharmacist near the cash counter. Who had been authorized to stop anycustomer removing any drug from the premises.
The question which had arisen in this case was, whether the display of articles indicating their prices was an offer and the selection of articles by the customer an acceptance thereof, or the offer was made by a customer when he brought the articles to the cash desk and the defendants were free not to accept the offer, if they so liked.
It was held that the display of articles, even on a "self-service" basis was not an offer but was merely an invitation to treat. When the customer selected an article and brought the same to the cash desk that amounted to an offer to buy the goods.The defendants were, therefore, free to accept the offer or not. In fact, the offer is an offer to buy, and there is no offer to sell;
The following observations of Lord Goddard. C.J. is worth noting:-"I think that it is a well-established principle that the mere exposure of goods for sale by a shopkeeper indicates to the public that he is willing to treat but does not amount to an offer to sell.”“the customer is informed that he may himself pick up an article and bring it to the shopkeeper with a view tobuying it, and if, but if, the shopkeeper then expresses his willingness to sell, the contract for sale is completed.”
HARVEY V. FACEY (1893)A.C. 552.
In this case quotation of the price was held not to be an offer.
The facts of the case are as under:-
The defendants were the owners of a plot of land known as Bumper Hall Pen. The plaintiffs being interested in purchasing the same sent a telegram to the defendants. "Will you sell us Bumper Hall Pen? Telegraph lowest cash price." The defendants in reply telegraphed :- "Lowest price for Bumper Hall Pen. £ 900."The plaintiffs sent another telegram to the defendants saying. "We agree to buy Bumper Hall Pen for £ 900 askedby you. Please send us your title deeds,
" The plaintiffs contended that the second telegram from the defendants quoting lowest price was an offer and the same had been accepted by the plaintiffs, and the contract was complete.The defendants, on the other hand, contended that quoting the price was not an offer which could be accepted.
The Judicial Committee of the Privy Council held that exchange of the above stated telegrams had not resulted in a contract.It was observed that the first telegram had asked two questions, one regarding willingness to sell, and the otherregarding the lowest price.
In reply only lowest price was quoted, and this quoting of the price was not an offer.The third telegram from the plaintiffs saying, "we agree to buy" was only an offer and not the acceptance of anoffer. Since this offer had not been accepted there was no binding contract between the parties.
IN BADRI PRASAD V. STATE OF MADHYA PRADESH,7. A.I.R. 1970 S.c. 706.
The Divisional Forest Officer wrote to the plaintiff:
"Kindly inform whether you are ready to pay further Rs. 17.000 for the contract of big trees which (contract) is under dispute at present. The contract can be given to you on this compromise only… On receipt of your reply theState Government will be informed.
" In reply to the above letter the plaintiff wrote back;-
"I am ready to pay Rs. 17,000 provided my claim to have the refund of Rs. 17.000 already paid, from the owner of the Village or any other relief consequential to the judgment of that case remains unaffected Subject to thoseconditions I shall pay Rs. 17,000 as required in your referred letter.
" The Supreme Court held that by those letters no contract had been concluded between the plaintiff and the Government. The letter from the Divisional Forest Officer seemed to be merely invitation to offer rather than offer.The letter in reply from the plaintiff was an offer.
It was further observed that even if the letter from the Divisional Forest Officer to the plaintiff is treated as an offer,there is no unconditional acceptance from the plaintiff and as such there is no contract in any case.
MAC PHERSON V. APPANNA88. A.I.R. 1951 S.c. 184 : 1951 S.C.R. 161.
Above case is another illustration of an invitation to treat.
The plaintiff having already offered to pay Rs. 6.000 to the defendant for his property, again wrote to thedefendant's agent asking whether his offer had been accepted and also stating that he was willing to pay even higher price if found reasonable.
The defendant's agent replied that the defendant would not accept less than Rs. 10,000. The plaintiff then wrote that he was willing to pay Rs. 10,000.
The plaintiff contended that the offer of Rs. 10,000 had been accepted by him (the plaintiff) and sued for specific performance of the contract.
EXAMPLES OF INVITATION TO OFFER
1. Catalogue of books-indicating prices of various books to many persons.
2. Inviting persons to an auction,
3.The advertisement calling for tenders, The submission of a tender is in the nature of an offer.
4.The display of articles indicating their prices
5. Quotation of the price
6. An advertisement by the auctioneer to sell goods by an auctio
IMPORTANT CASES
1. Haris v. Nickerson,
2. Pharmaceutical Society of Great Britain v. Boots Cash Chemists Ltd.,
3. Harvey v. Facey
4. In Badri Prasad v. State of Madhya Pradesh,
5. Mac Pherson v. Appanna
