INTRODUCTION
This case[1] was a landmark case regarding the principle of invitation to offer. It clarifies the distinction between an invitation to offer and an offer. Invitation to Offer is the invitation that a person or someone makes to the other party or its customers to purchase something or inviting someone to make a proposal on that basis. It is not mentioned in the ICA, 1872 for example – A bookstore owner offering to sell books is merely an invitation to offer and not an offer. When you walk into a restaurant, you see the menu list or it is displayed on the wall. There are numerous food options on that list and you choose a certain food item. The restaurant still reserves the right to not offer all those food items. This is an invitation to offer. If the food items were an offer, you can claim any of the items in the restaurant. The restaurant cannot deny it because the moment you enter and agree to pay, both parties enter into a contract.
HOW ARE OFFER AND INVITATION TO OFFER DIFFERENT?
According to Section 2(a) of the Indian Contract Act, 1872 the party shows his willingness to do something. An invitation to offer can be seen of as a prelude to an offer, or a stage preceding an offer. The party has the option of declining the invitation to offer and not accepting it. You are not demonstrating your willingness, but you may set some conditions or negotiate at a later time. You are just making a statement at this point and you are willing to negotiate it stating your own terms The major distinction here is in the ‘intention of the parties.’ While an offer directly allows the other party to enter into a contract once it is accepted, an invitation to offer primarily invites the other party to negotiate with the seller and make his own offer.
HARVEY V. FACEY[2]
FACTS
Harvey sent a telegraph to Facey asking him will he sell the bumper hall pen and to telegraph the lowest price to be paid. Facey also replied by a telegram stating that the lowest price is 900 euros. After that Harvey immediately sent their reply stating that they will pay the said price and buy the bumper hall pen but afterward Facey refused to sell.
JUDGEMENT
It was held that there was no contract between Harvey and Facey because Facey only quoted the lowest price and it was just an invitation to offer and not an offer.
Pharmaceutical Society of Great Britain v. Boots Cash Chemist
FACTS
The defendants, Boots Cash Chemist, ran a shop that adhered by a self-service system and had a chemist department and a registered pharmacist was appointed to control the different kinds of medicines and drugs that were included in Part I of the Poisons List compiled under section 17 (1) of the Pharmacy and Poisons Act, 1933 and were available on the shelves. On April 13, 1951, at the store, two customers bought a bottle that contained a medicine called compound syrup of hypophosphates which consisted of poisons but only in small amounts included in the list. The customers can select the items from the shelves that they wanted to buy and later on were checked by the cashier during the transaction. The registered pharmacist supervised the chemist department and payment of the drugs to take precautions. There was a separate shelf for the drugs provided under the section.
ISSUE
Did the sale occur at the cash desk where the transaction happened under the supervision of the registered pharmacist or whether it occurred at the point when the consumer removes the drugs or medicines from the shelves that he desires to buy and places them in the basket under the self-service system.
CONTENTIONS OF PLAINTIFF
(Pharmaceutical Society of Great Britain) –
They claimed that there was an infringement of Section 18(1) of the Pharmacy and Poisons Act, 1933 which states that the sale of poisons that are included in Part I of the Poisons List should be supervised by the registered pharmacist. The work of the Pharmaceutical Society of Great Britain is to ensure and enforce this section and according to the plaintiffs, the self-service system violates this act. It makes an invitation to the customer to purchase the items by clearly displaying the price of each item on the shelves which constitutes an offer and that the customer’s taking of an item constitutes acceptance of the offer to sell. They believe that the putting of items in the basket is s acceptance of the offer the store makes and the contract is formed at that moment. Therefore, when the drugs and medicines were kept, there was no supervision rather it was on the cash counter.
CONTENTIONS OF DEFENDANT
According to the defendants, the sale of these medicines and drugs did not take place when they were kept in the basket rather the contract was executed where the transaction was going to happen at the cash counter and therefore, they argued that there was a registered pharmacist present at the cash counter and under his supervision the sale took place. Hence, there was no violation of the Act.
JUDGEMENT
The court rejected the appeal of the plaintiff and said that the contract of the sale happened at the till after the transaction took place. Also, a registered pharmacist was present at the till so there was no violation of Section 18(1) of the Pharmacy and Poisons Act, 1933. It was held that the self-service system provided by the shop did not constitute an offer to sell the items that were on the shelves but rather an invitation to offer to the customer, and was supervised by the pharmacist, and only then it can be bought. This was also supported by the fact that the customer cannot use the medicines unless and until he has paid for them. He can also return the drugs to the counter till the time he has not paid for them. The contract is formed only after the payment of the drugs or medicines at the cash counter.
CONCLUSION
This case paved way for the modern concept of invitation to offer. An offer signifies the willingness to do something or to abstain from doing something and in order to do so be legally bound where there is no negotiation present but in the cases of invitation to offer, the seller or the party has the right to negotiate and even has the right to refuse to sell. Even though the invitation to offer is not mentioned in the sections of the Indian Contract Act, we got to understand and know further about this concept through the previous judgements given by the court. A shopkeeper keeping things on display with prices mentioned is an invitation to offer intended for the customers to buy the books. The owner has the right to refuse to sell the book. In this case, we got to know that the contract was completed at the cash counter.
Author(s) Name: Vagisha Anand (National University of Study and Research in Law, Ranchi)
References:
[1] Pharmaceutical Society of Great Britain v Boots Cash Chemists (Southern) Ltd., [1953] 1 QB 401
[2] Harvey v Facey (1893) AC 552
