INVITATION TO TREAT

Abstract

Law is an essential part of our society. Law means justice, discipline, order, morality etc. It includes Acts, Statutes, Rules, Regulations, Orders, Ordinances, Justice, Morality, Reason, Rules of court, Decrees, Judgment, Orders of courts, Tort, Jurisprudence etc. Law is needed for various reasons such as to enforce rules that regulate people’s behaviour in accordance with social norms, such as personal, contract, regulatory, and prohibitionary laws; to protect and ensure our rights as citizens; to provide justice to the victims; to penalize the criminals. Law is important because it teaches a society to maintain discipline, order. It helps in resolving disputes.

There are various types of law such as criminal law, civil law, contract law, family law, statutory law, administrative law, international law and many more. This article mainly deals with invitation to treat or offer in a Contract which comes under Contract Law. An offer is made when someone expresses their desire to do something or refrain from doing something in order to convince another person over. In Invitation to treat there is no intention on the part of the person sending out the invitation to obtain the assent of the person to such invitation. This object is just to circulate the information that he is willing to deal with anyone who on such information is willing to negotiate with him. Over thousands of years, contracts and agreements have been essential to human cultures, enabling a wide range of social, political, and economic interactions. Based on the notion that agreements must be maintained contract law is the area of law that deals with obligations related to contracts.

Keywords

Ordinances, Statutes, Decree, Agreement, Contract, Abstinence, Coercion, Undue Influence, Misrepresentation, Auctioneering

Introduction

The Indian Contract Act, 1872 defines the term “Contract” under its section 2 (h) as “An agreement enforceable by law”. Section 2 (e), defines the term agreement as every promise and every set of promises, forming the consideration for each other. A contract is an agreement which is enforceable by law. All agreements are not enforceable by law, thus not all agreements are contract. There are certain conditions given in Section 10 of Indian Contract Act, 1872 following which an agreement becomes a valid contract and those conditions are:•There must be an agreement

There must be free consent
Parties must be competent to contract
There must be lawful consideration with a lawful object
And the agreement must not be expressly declared as void

An agreement between two parties that creates an obligation to perform—or not perform—a particular obligation is referred to as a contract. For Example, Ram an adult came into an agreement with a store to buy a television set. Ram pays for television set and the store presents the same to Ram to take it with him,(So in the above example the agreement between Ram and the store is contract because there is lawful object with lawful consideration, the consent is free, Ram entered into the contract with his free consent and both the parties are competent to contract.)

The important component of contract law are offer, acceptance, consideration, intention to create legal relations, and certainty of terms.

Essential elements of a Contract

1. Offer or Proposal: Offer is a starting point for a valid contract. It is a proposal by one party to another to enter into legal binding agreement with the other party.

Offer or Proposal is defined under Section2(a) of Indian Contract Act,1872, as when a person signifies his willingness to do or abstain from doing something, with a view of obtaining the assent of that other, to such act he is said to make a proposal.

Essentials of an offer

•Intention to create a legal relationship

•Mere statement of intention not sufficient to constitute an offer

•Offer must be communicated to the offeree

2. Acceptance: Acceptance is defined under Section2(b) of Indian Contract Act,1872, as the person to whom the proposal has been made signifies his assent thereto, the offer is said to be accepted. Thus, the proposal when accepted becomes a promise.

Essentials of Acceptance

• Acceptance must be conveyed in some usual and reasonable manner

• It has to be absolute and unqualified

• Acceptance must be communicated

• Acceptance should be made while the offer is still subsisting

3. Consideration: Consideration means something in return for the promise. When a party to an agreement promised to do something, he must get something in return and that something is called as consideration.

Consideration is defined under Section2(d) of Indian Contract Act,1872 as when at the desire of the promisor, the promisee or any other person has done or abstained from doing, or does or abstains from doing, or promises to do or abstain from doing something, such act or abstinence or promise is called consideration for the promise.

Essentials of Consideration

• Consideration must be at the desire of the promisor

• Consideration by promisee or any other person

• Consideration can be past or present or future

• Something i.e., an act, abstinence or promise by the promisee constitute consideration

4. Free Consent: Consent is said to be free when it is not effected by—

coercion, defined in section 15, or
undue influence, defined in section 16, or
fraud, defined in section 17, or
misrepresentation, defined in section 18, or
mistake, subject to the provisions of sections 20, 21 and 22.

Invitation to treat is also known as Invitation to an Offer. An offer is made when someone expresses their desire to do something or refrain from doing something in order to convince another person over. In Invitation to treat there is no intention on the part of the person sending out the invitation to obtain the assent of the person to such invitation. This object is just to circulate the information that he is willing to deal with anyone who on such information is willing to negotiate with him. For example, Bookseller sending catalogue of books indicating prices of various books; when we go to a bookshop, the mere display of the books in the shop is an invitation to offer by the seller of the books to the general public.
An invitation to offer is an indication of someone’s desire to engage in contract negotiations; it is not an actual offer. In Invitation to an Offer one is inviting the other person make an offer, he/she is not making an offer , but just circulating the information.

Offer

Seller—> Buyer

Invitation to Offer

Buyer—> Seller

There are many examples of an invitation to offer like auctioneering, display of goods in a shop, an invitation to tender, display of the menu of a restaurant, advertisements in a newspaper, an invitation to see an apartment for sale/rent, etc.

Landmark cases of Invitation to Treat

Case: Pharmaceutical Society of Great Britain V. Boots Cash Chemists Ltd. [1953][1]

Facts of the case: The defendant ran a self-service pharmacy selling over-the-counter medications and non-prescription substances, many of which were on the Poisons List issued under the Pharmacy and Poisons Act 1933. These products were put out on open shelves for customers to choose from, put in a shopping basket, and bring to the register to be paid for. A licensed pharmacist operated the till. Section 18(1) of the Pharmacy and Poisons Act 1933, however, which mandates the supervision of a registered pharmacist for the sale of any substance in the Poisons List, was violated, and this is why the claimant filed legal action against the defendant.

Issues raised: The question was whether the defendant violated the Act at the time the customer chose the product from the shelves or at the time the items were paid for (the defendant was not in violation of the Act in the case at hand because the pharmacist was present at the till).

Judgement: The Court of Appeal determined that the defendant was not in violation of the Act since the contract was fulfilled under the pharmacist’s supervision and on payment. The right structure was that the customer made an offer to the cashier when arriving at the till, which was accepted when money was taken. The display of the items on the shelf was not an offer, which was accepted when the customer selected the item. The customer’s freedom to return any item to the shelves prior to payment was a supporting factor in our investigation.

Case: Harvey v Facey (1893) [2]

Facts of the case: Mr. Harvey, one of the appellants, was running a partnership business in Jamaica when he expressed an interest in buying a property owned by Mr. Facey. Mr. Facey was at the same time in negotiation to buy the same property with the Kingston City Council and the Mayor. In order to prevent the property from being sold to Kingston City, the appellant on October 6, 1893, sent a telegram to Mr. Facey, who was riding the train that day, about the purchase of property. Will you sell us Bumper Hall Pens, Telegram asked? Telegraph the lowest cash price for the paid answer.” In response, Mr. Facey declared, “Minimal price for Bumper Hall Pen£900.” Mr. Harvey also responded, saying, “We agree to purchase Bumper Hall Pen for the nine hundred pounds that you have requested.” Please send us your title deed in order that we may get early possession.” When Mr. Facey declines to sell the land, Mr. Harvey files a lawsuit against him, claiming that they were parties to a contract and that he has accepted the telegram as an offer. Judge Curran dismissed the petition during the first trial on the grounds that “the agreement as alleged by the Appellant did not denote a concluded contract.” However, the court of appeals overruled the trial court’s decision, finding that the binding agreement had been established. He files an appeal with the Queen of Council (also known as the Privy Council) after requesting leave from the appellate court.

Issues raised:• Was there a formal offer made by Mr. Facey to Mr. Harvey to sell the property mentioned above for £900, and could it be accepted?

•Was the contract valid or not?

Judgement: According to the Privy Council, the parties have never had an agreement. It is not an offer that could be accepted; rather, the first chat is merely a request for information. As a result, Mr. Facey’s telegraph was not accurate. It was determined that the telegraph that Mr. Facey passed on contains just a few pieces of information. Mr. Facey never offered a proposal that could be approved.

Distinguish between Offer and Invitation to Treat of Offer

Basis	Offer	Invitation to Treat
Definition	An offer is made when someone expresses their desire to do something or refrain from doing something in order to win someone else over.	An invitation to offer is not an offer, but a sign of a person’s willingness to negotiate a contract
Purpose	To obtain an offer, an invitation to offer is made.	Offer is made with an intent to get accepted
Essential to make an agreement	Yes	No
Consequence	The Offer becomes an agreement when accepted	When a party responds to an invitation to offer, it becomes an actual offer.
Example	•Rohan tells to Manav, “I want to sell my motorcycle to you at Rs. 30,000, Will you purchase it?” •Meet says to Geet, “I want to purchase your car for Rs. 2,00,000, Will you sell it to me?	•A restaurant’s menu card that lists the costs of the food, •Railway schedule that displays train times and ticket prices, •Government Tender •Inviting persons to an auction

Conclusion

Many people gets confused between offer and invitation to offer. The purpose of the invitation to offer is to communicate to the general public the terms and conditions under which a person would be interested in signing a contract with the other party. The former party is encouraging others to offer him, even though he is not the offeror because he is not making an offer. As a result, the acceptance is only an offer and not a contract. The offer made by the other parties becomes a legally enforceable agreement when accepted by the former party. Two most famous examples of invitation to offer are, an auction sale advertisement and pamphlets of burgers’ showing their rates.

References

Wikipedia, https://en.wikipedia.org/wiki/Contract (17^th December, 2023)
Blog ipleaders, https://blog.ipleaders.in/offer-and-invitation-to-offer/ (17^th December, 2023)
Writing Law, https://www.writinglaw.com/offer-and-invitation-to-offer-in-indian-contract-act-1872/ (17^th December, 2023)
Law Teacher, https://www.lawteacher.net/cases/pharmaceutical-society-v-boots.php (18^th December, 2023)
Legalserviceindia, https://www.legalserviceindia.com/legal/article-6532-case-harvey-v-s-facey.html (18^th December, 2023)

[1] Pharmaceutical Society of Great Britain v Boota Cash Chemists [1953] 1 QB 401

[2] Harvey v. Facey (1893) AC 552

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