10 August, 2010

Cases where there is an invitation to treat



Catalogue of prices: A shopkeeper’s catalogue of prices is not an offer. It is only an invitation to the intending customers to offer to buy at the indicated prices. “The transmission of a price list,” observed Lord Herschell, “does not amount to an offer to supply an unlimited quantity of the wine described at the price named, so that as soon as an order is given there is a binding contract to supply that quantity. If it were so, the merchant might find himself involved in any number of contractual obligations to supply wine of a particular description which he would be quite unable to carry out, supply wine of that description being necessarily limited.
Display of goods: The display of goods in a shop with price chits attached is not an offer even if there is a self “service system” in the shop. This was so held in “Pharmaceutical Society of Great Britain vs Boots Cash Chemists Ltd. Lord Goddard CJ said: It would be wrong to say that the shopkeeper is making an offer to sell every article in the shop to any person who might come in and that person can insist on buying any article by saying “I accept your offer”- In most bookshops customers are invited to go in and pick up books and look at them even if they do not actually buy them. There is no contract by the shopkeeper to sell until the customer has taken the book to the shopkeeper or his assistant and said: ‘I want to buy this book’ and the shopkeeper says ‘yes’. That would not prevent the shopkeeper, seeing the book picked up, saying, ‘I am sorry I can’t let you have that book; it is the only copy I have got and I have already promised it to another customer.’ Therefore, I am of 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, and there is no sale effected until the buyer’s offer to buy is accepted by the acceptance of the price.
 Advertisement for sale by auction: An auctioneer’s announcement that specified goods will be sold by auction on a certain day is not an offer to hold the auction and he won’t be liable to persons traveling up to the place if he changes his mind and does not hold the auction (Harris vs Nickerson). Even when an auction is held the bid is not an acceptance so as to entitle the highest bidder to get the goods. The highest bid is nothing more than an offer to buy and it requires to be accepted by the auctioneer (Spencer vs Harding). Id does not matter for this purpose that the auction was held by the Govt. Even a Govt. auction may be cancelled before any bid is finally accepted. After cancelling the auction the right was handed over to a Govt. corporation and it was considered to be no argument that a corporation can’t afford to pay an amount equal to private bidders. The Supreme Court also gave this latitude to a govt., as is enjoyed by a private auctioneer, that it may even ignore the highest bid and accept a lower bid. The highest bidder may be found to be an undesirable person for many reasons, e.g., from the mere enormity of the bid. However, one contractor should not be preferred over another without any reason, this would be more so in the matter of govt. contracts. Where out of the participating bidders or tenderers, anyone is called to revise his figure, an equal opportunity should be given to the highest bidder or the lowest tenderer, provided there is otherwise nothing against him.
Tenders: An advertisement for tenders is not a proposal. It is a mere attempt to ascertain whether an offer can be obtained within such a margin as the sellers are willing to adopt (Spencer VS Harding)
Negotiation of sale:
Railway time table: In our country a specified time of bus, train and other vehicles has been selected for the benefit of the passengers. That is, the authority informs the people when bus, train etc. will start. This is not an offer but merely an invitation to treat (Denton Vs Great Britain Northern Railway Co.)

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