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Invitation to Offer

Invitation to Offer

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Published by Anurag Chaurasia

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Published by: Anurag Chaurasia on Apr 24, 2012
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05/08/2015

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Invitation to offerOffer,According to Indian contract act 1872 defines
offer
in sec-2 (a)
“When a person signifies to another his willingness to do or abstain from doing
anything, with a view to obtaining the assent of that other to such act or abstinence, he
is said to make a proposal”.
 According to Waddams -
Manifestations of a willingness to be bound by contract
.According to Fridman-
“Signification by one person to another person of his
willingness to enter into a contract
with him on certain terms”.
According to Treitel-
Expression of willingness to contract on certain terms with the intention that it shall becomebinding as soon as it is accepted by the person to whom it is
addressed”.
 
UNILATERAL
CONTRACTS: a promise on one side exchanged for an act or aforbearance on the other side (e.g. a promise to pay commission to an estate agent if he
finds a buyer for the seller‟s house); only one party, the promisor, is bound to do
 anything
BILATERAL
CONTRACTS: A promise or set of promises, on one side is exchangedfor a promise or a set of promises on the other side (e.g. contracts of sale); both partiesare equally bound to the performance of their promises.Offers can be of two types:-Specific
made to one person or group of people. Then only that particular person orgroup of people can accept.
 
General
 
made to „the whole world‟ (or people generally),
particularly seen in thecases of rewards and other public advertisements.The various ways in which an offer may terminate:-E.g. a says to b that he is willing to sell his z horses for one thousand rupees here, aproposal to sell his horse.Importance of offer:-Offer is the one of the most important part of the contract, and
it‟s also essential for
establishing a contract. Offer is the first step or the starting part of the contract. Whenone party makes an offer to another, he signifies his willingness to do or not to dosomething, so that he can obtain assent of the other party in doing or not doing such act.So, therefore it is the first step of the contract.One of the essential of agreement:-A proposal and its acceptance is the universally acknowledged process for the makingof an agreement. The proposal is the starting point sec 2 (a) defines:-
“When a person signifies to another his willingness to do or abstain from doing
anything, with a view to obtaining the assent of that other to such act or abstinence, he
is said to make a proposal”.
 
 
The person who makes the proposal is called the promisor or “offeror” the person towhom it is made is called the propose or “offeree” when he accepts it, he is called a
promisee . In the terminology of sec 2(c) a person making the proposal is calledpromisor and the person making the proposal is called promisee. In view of above
definition a proposal in the first place an expression of the offeror‟s willingness to do or
to abstain from doing something. Secondly, it should be made with a view to obtainingthe assent of the offeree to the proposal act or abstinence.Meaning of invitation of offer:-
Invitation to treat
(or
invitation to bargain
in the United States) is acontract lawterm. Itcomes from the Latin phrase invitatio ad offerendum and means "inviting an offer". Or asAndrew Burrows writes, an invitation to treat is-"an expression of willingness to negotiate. A person making an invitation to treat does not intendto be bound as soon as it is accepted by the person to whom the statement is addressed."Contract lawyers distinguish this from a binding offer, which can be accepted to form a contract(subject to other conditions being met). The distinction between an offer and invitation to treat isbest understood through the categories that the courts create. Invitations to treat include thedisplay of goods; the advertisement of a price or an auction; and an invitation for tenders (orcompetitive bids). There may however be statutory or complementary obligations, soconsumerprotectionlaws prohibitmisleading advertisingand at auctions without reserve there is always a duty to sell to the highestbona fidebidder.
INVITATION TO TREAT: an invitation to a party to make an offer:-
 
Price quotation:
does not amount to an offer, but merely to an invitation to treat (invitation tothe potential buyer to make an offer (
Canadian Dyers Assn’n Ltd.
v. Burton(1920) 47 O.L.R. 259 relying on the leading English case Harvey v. Facey [1893]A.C. 552)

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