INVITATION TO TREAT UNDER INDIAN CONTRACT AC: An Appraisal
Milan*
Meaning of invitation to treat under Indian Contract Act.
It refers to an invitation for a party to make an offer enter
into contractual negotiations. In the invitation two treat or offer, no
specific party has the intention to enter into a contract. The seller can enter
into a contract with anyone from the public who offers him the best. So the
essence of an invitation to offer is that the offer is made by the buyer.
A proposal or an offer to be differentiated from an invitation to
treat or offer. Sometimes a person may not offer to sell his goods but gives
some detail or information to invite others to make an offer on that basis.
If a person makes an existence offer to somebody it is called an offeror.
If a person accepts the offer, a binding contract comes into a . However, an
invitation to treat has quite a different meaning. It is inviting people into
making an offer.
Some examples of an invitation to treat include advertisements,
the display of goods in shop and auctions. Goods on display in a shop
mean that the retailer is willing to enter a `bilateral` contract with the
consumer. In other words, there is no obligation for the advertiser or retailer
to sell the goods.
OFFER AND ITS TYPES.
It is defined in Section 2(a) of Indian Contract Act,1872. As per
the Indian Contract Act 1872, offer is defined the person who makes the offer
is known as `offeror` and whom an offer is made is known as `offeree`. When
offeree accepts the offer, it becomes a promise.
General offer
When an offer is made to the public at large
or many parties at once, but not to any specific party then such an offer is
known as `general offer`.
Specific offer
When an offer is made to a specific person or
party, then such an offer is known as `specific offer`.
For example. Let's say A asks to B if B wants
to buy A`s bike for INR 50,000. Here, A is offeror and has made an offer,
whereas B is offeree.
Case laws.
1) Pharmaceutical Society of Great Britain v/s Boots Cash
Elements Limited 1953.
Issues A) When does an acceptance of an offer take place in the self-serve
stores?
B) Is the customer bound
to purchase any community once such a thing is placed in its basket?
C) Is the shopkeeper
bound to sell its products at a price enlisted at the display?
Conclusion A) Acceptance of offer takes place in purchase
when the cashier accepts the money offered by the offeror.
B) Customer is not bound to purchase anything that he has placed
in his basket.
C) Goods on the display with or without price is an invitation to
offer not an offer, customers are set to make an offer when they take the
product to the cashier.
D) Cashier is under the shopkeeper’s authority to accept or reject
the offer made by the customers, therefor a contract does not take place until
cashier accept the purchase.
2. State Bank of Patiala v/s Romesh Chander Knoji.
Facts of the case- Voluntary Retirement Scheme (VRS) framed by the appellant court,
and the respondent employee made an offer for making an application seeking
voluntary retirement. In the scheme,15 days was given to the employee to opt
for the scheme. It was also provided that application once made could not be
withdrawn. Hence, withdrawal after the date of closure of the scheme was not
permissible.
Judgment of the case- The Supreme Court observed that scheme was
an `invitation to offer` and not an `offer`, and such schemes, employees are
permitted to withdraw their application at any time even after the closure of
the scheme, so in this case, all the calculation of the management of bank
would fail.
Conclusion- Now the
difference between an offer and an invitation to offer is clear and whether actions are follow-up well known. While the concept of offer bestows upon the offeree the
power to accept or reject the offer and thereby, conclude the contract, the latter
concept is only meant to express the intention to elicit the overture of offer
which then the inviter is at the liberty to accept or reject the offer so made,
in response to such an invitation. Unlike a contract, an invitation to offer
has no legal consequences. Although, as simple as it might sound, at times
determining either if one is faced with an offer or invitation to offer/treat is quite a task and depends upon the rules and laws laid by different legal
systems.
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* Student of LL.B. (First year),
Panjab University Chandigarh.
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