Question No 1.

Issue one:

Whether the advertisement printed in the regular monthly newsletter by Nina will constitute a
valid offer or an invitation to treat/offer?

Rule of law:

Section 2(a) of The Indian Contract Act 1872

Analysis:
Section 2(a) of The Indian Contracts Act states that whenever an individual indicates his
desire/intention to another individual to act upon something or to abstain from doing
something to gain consent from the other individual to such an act or abstinence. An
invitation to offer is very different from an offer as in it the offeror does not concludes his
final willingness, but rather just states certain conditions on which he is willing to bargain. 1
Intention plays the most important role to distinguish between an offer and an invitation to
offer.

In Carlill v Carbolic Smoke Ball Company2 and Lefkowitz v Great Minneapolis Surplus
Store Inc,3 it was held that an advertisement will constitute an offer if it is made in such a
sense that it is straightforward, crisp, specific, and definite and there is no room left for
negotiation. In Leonard v. Pepsico,4 it was held that advertisements in newspapers,
television, radio, etc. are not made to make an offer, but they can be considered as an offer if
there is a dedication to make it.

It is clear from the facts of the case that Nina only made an invitation to treat/offer as the
advertisement published by her was just a mere advertisement in the newspaper to invite
people to make an offer to her. Also, the ad she put up wasn't very clear or specific because it
only stated the item and how much it cost.

Conclusion:

The advertisement printed by Nina was an invitation to offer.

Issue two:
1
Avtar Singh, Law of Contract & Specific Relief (2020) 20.

2
Carlill v Carbolic Smoke Ball Company [1892] EWCA Civ 1

3
Lefkowitz v Great Minneapolis Surplus Store Inc (1957) 86 NW 2d 689

4
Leonard v. Pepsico, 88 F. Supp. 2d (1999)
Quoting the lowest price for the vase by Nina to Arya constitutes a proposal capable of
acceptance.

Rule of law:

Section 2(a) of The Indian Contract Act 1872.

Section 2(b) of The Indian Contract Act 1872.

Analysis:

Section 2(a) of The Indian Contracts Act states that whenever an individual indicates his
desire/intention to another individual to act upon something or to abstain from doing
something to gain consent from the other individual to such an act or abstinence.

Section 2(b) of The Indian Contract states that a proposition is generally accepted when the
proposed recipient acknowledges his agreement with it. When a proposition is accepted, it
turns into a promise.

In Harvey v Facey5 The court held that the plaintiff proposed two questions to the defendant,
the first being whether the defendant was interested in selling or not. Second, the lowest
amount. Mr. Facey’s only response to the second question proposed by the plaintiff was to
quote the lowest price for the property. The court said the quoted lowest amount would not
constitute an offer and the third telegram that was sent by the plaintiff was the proposal.

There was no contract as the proposal was accepted by the defendant. In McPherson v M.
N. Appanna6The court held that the defendant did not propose, it was just an invitation to
offer.
.
In the factual situation, the circumstances are quite similar as Nina only quoted the lowest
price, and Arya’s acceptance on August 22nd, 2022, will only constitute an offer Nina never
proposed an offer.

Conclusion:

Quoting the lowest price by Nina to Arya will not constitute a proposal.

5
Harvey v Facey [1893] AC 552

6
McPherson v M. N. Appanna AIR 1951 SC 184
Issue three:

Was Nina capable of making a valid contract with Rumi?

Rule of Law:

Section 12 of The Indian Contract Act 1872.

Analysis:

Section 12 of The Indian contract act talks about the soundness of mind while making a
contract it says, that when a person enters into a contract he is deemed to be mentally sound if
he can recognize the nature of it and make an appropriate decision concerning how it will
influence his interests. A person with an unsound mind but sometimes when he is of a sound
mind may legally sign a contract. A contract cannot be signed by a person of sound mind
when he is occasionally unsound.

Illustration: A sane individual who is so drunk that he can't understand the terms of a contract
or make a sound decision about how it will affect his interests can't sign a a contract as long
as he is drunk.

In Lucy v. Zehmerit,7 It was held that the contract between the parties was valid as the real
reason for agreeing to sell their property didn’t matter as long as their actions and statements
made a sensible person believe that the contract was intended. Also, the evidence showed that
the defendant wasn't so drunk that he couldn't have known what would happen if he did what
he did.

In the present situation, it is evident that Nina was so intoxicated that she was having a tough
time trying to understand the surroundings. So, she couldn't form a contract with Rumi.
Rumi, as a reasonable person should have understood the way Nina was behaving, and
clearly states she was not in her sound mind.

Conclusion:

Nina was not capable of making a valid contract with Rumi.

Issue four:

Was there a valid consideration from Anamika's end for the vase?
7
Lucy v. Zehmer, 84 S.E.2d 516
Rule of Law:

Section 2(d) of The Indian Contract Act 1872.

Analysis:

"consideration is the price of a promise, a return or quid pro quo, something of value received
by the promise as inducement of the promise.”8

Section 2(d) of The Indian Contract Act states when a promise or any other individual on the
suggestion of the promisor (1) has done or refrained from doing(past) (2) or intends to do or
refrains to do(present) (3) or guarantees or refrain(future) from some activity such actions are
referred to as consideration for the promise.

In Stilk v Myrick,9 the court stated that The execution of a pre-existing task does not
constitute a legally acceptable consideration since the member of the crew has already
promised to face all emergencies that may arise during the trip. Lalman Shukla v. Gauri
Dutt10 it was held that the servant undertook the duty to find the lost son of his master hence,
it was a part of his existing duty. Ramchandra Chintaman v. Kalu Raju11 the plaintiff had a
duty to provide the best possible service as a lawyer and there was no new consideration.

Nina’s decision to gift the antique vase as well as the payment for the services used by her to
Anamika will not constitute a valid consideration as she was not receiving any new
consideration from Anamika’s end. Anamika already had a pre-existing duty against Nina. It
didn’t matter how well she performed, she was entitled to give her best service possible. So
only the payment for her service was a valid consideration, not the vase.

Conclusion:

There is no valid consideration from Anamika’s end.

Issue five:

Was there an intention to create a legal relationship between Nina and Risha?

8
Fazalaldin Mandal v Vanchanan Das, AIR 1957 Cal 92. The same court had held in Fanindra Narain Roy v
Kachhemen Bibi, AIR 1918 Cal 816: ILR (1917) 45 Cal 774 that consideration received by two mortgagors was
good enough to bind all the four who executed the mortgage deed. This was followed in Andhra Bank v
Anantnath, AIR 1991 AP 245 so as to hold all the joint promisors executing a promissory note liable though
consideration was handed over to only one of them. Prakashwati Jain v Punjab State Industrial Development
Corpn, AIR 2012 PScH 13, detriment suffered by the promisor for the benefit of another person (not party to
consideration) washeldasgoodconsideration. Accordingly, thecollateralsecurityoffered by the surety for the
benefit of the principal debtor was regarded as sufficient consideration to make it enforceable.

9
Stilk v Myrick (1809) 170 ER 1168.

10
Lalman Shukla v Gauri Datt (1913) 11 All LJ 489.

11
Ramchandra Chintaman v. Kalu Raju (1878) ILR 2 Bom 362.
Rule of Law:

Intention To Create Legal Relationship.

Analysis:

The Indian Contract Act does not define the intention necessary for a proposal or acceptance
to form a legally binding relationship. However, it is a widely accepted concept in English
law that parties to a contract must have an intention to enter into legal obligations. 12

To establish an intention to create a legal relationship, an objective test is used which deals
with what sensible individuals would assume their motive was, not the objectives that each
side had in mind.13

"In the case of arrangements regulating social relations, it follows almost as a matter of
course that the parties do not intend legal consequences to follow. In the case of agreements
regulating business relations, it equally follows almost as a matter of course that the
parties intend legal consequences to follow.”14

In Balfour V Balfour,15 The court ruled, Mr. and Mrs. Balfour had no intention of entering
into a contract that could be forced by law because they had no intention of creating a legal
relationship. In Jones v Padavatton16 It was held that family agreements are presumed to be
centered around mutual trust and love and not create legally binding agreements that can be
enforced by the law. The absence of formality between mother and daughter shows that there
was no purpose in creating a legal relationship between them.

The factual situation of the case clearly shows that the mother, "Nina," out of sheer love and
affection towards her daughter, "Risha," offered to gift her the antique vase on the news of
her getting married. Here, as it is a domestic agreement, there cannot be any intention to
create a legal relationship. Additionally, the informality between the mother and the daughter
further cements this point.

Conclusion:

There was no intention to create a legal relationship between Nina and Risha.

Issue six:

Can Nina revoke her offer to Ajay after his acceptance?

12
Avtar Singh, Law of Contract & Specific Relief (2020) 11.

13
Avtar Singh, Law of Contract & Specific Relief (2020) 13.

14
Per Bankes LJ at p. 282 in Rose & Frank Co v J.R. Crompton & Bros Ltd, (1923) 2 KB 261 (CA).

15
Balfour v Balfour [1919] 2 KB 571.

16
Jones v Padavatton [1969] 1 WLR 328.
Rule of Law:

Section 5 of The Indian Contract Act 1872

Analysis:

Section 5 of The Indian Contract Act states that as against the proposer, a proposal can be
withdrawn at any point before the completion of the declaration of its acceptance, but not
later.

In Dickinson v. Dodds,17 the court held that the proposal made by the defendant could be
revoked at any time before its acceptance.

Since Nina had offered Ajay to buy the vase, she could have only revoked the offer before
Ajay accepts the proposal. But since she tried to take back the offer after Ajay had accepted
it, she couldn't do it.

Conclusion:

Nina cannot revoke the offer as Ajay had already accepted the offer.

Question No. 2.

17
Dickinson v Dodds (1875) 2 Ch D 463.
According to the oxford dictionary, an advertisement is “a notice, picture or film telling
people about a product, job or service”.18 Multiple advertising appears daily in a wide variety
of media, including newspapers, radio, television, billboards, catalogues, the internet, and
more. Advertisements can be an offer or an invitation to make an offer. Many people enter
into contracts with these advertisers either by accepting their offer or by making an offer of
their own.

Advertisements which are considered as an offer Section 2(a) of The Indian Contracts Act
defines an offer as whenever an individual indicates his desire/intention to another individual
to act upon something or to abstain from doing something to gain consent from the other
individual to such an act or abstinence.

Carlill v Carbolic Smoke Ball Company19 , In this case, there was an advertisement
published by the Carbolic Smoke Ball Company. The company in the ad offered a reward of
100 pounds to anyone who contracted influenza after using the carbolic smoke ball and
following the instructions printed and also deposited 1000 pounds into the alliance bank. In
response to the advertisement, the plaintiff bought the smoke ball and administered it
according to the instructions printed, but she still contracted influenza. So, she bought suit
against the defendant to get her 100 pounds.

The issue in the case was whether it was an invitation to offer or an offer. The court ruled that
an advertisement will constitute an offer as it is made in such a sense that it is
straightforward, crisp, specific, and definite and the depositing of the money in the bank
showed their sincerity towards the offer.

Lefkowitz v Great Minneapolis Surplus Store Inc20 , In this case, an ad was published by the
Great Minneapolis Surplus Store on April 6th, 1956, and later on April 13th, 1956. The
defendant, following the advertisement, showed up first on both days and offered the amount
of $1 as stated in the advertisement. This showed his willingness to pay. However, every time
he tried to purchase the coat and then stole it, the store refused to sell it to him as it was
against the house rules because the offer was intended for female clients.

The issue, in this case, was whether the ad constituted an offer or an invitation to offer. In the
case, the court held the same that the advertisement was indeed an offer as it was clear,
definite, and specific, and there was no space for debate.
Advertisements are an invitation to treat/offer, An invitation to offer is very different from an
offer as in it the offeror does not conclude his final willingness, but rather just states certain
conditions on which he is willing to bargain.21

18
“Advertisement Noun - Definition, Pictures, Pronunciation and Usage Notes | Oxford Advanced Learner’s
Dictionary at OxfordLearnersDictionaries.Com” (advertisement noun - Definition, pictures, pronunciation and
usage notes | Oxford Advanced Learner’s Dictionary at OxfordLearnersDictionaries.com)
<https://www.oxfordlearnersdictionaries.com/definition/english/advertisement> accessed October 9, 2022.

19
Carlill v Carbolic Smoke Ball Company [1892] EWCA Civ 1.

20
Lefkowitz v Great Minneapolis Surplus Store Inc (1957) 86 NW 2d 689.

21
Avtar Singh, Law of Contract & Specific Relief (2020) 20.
Pharmaceutical Society of Great Britain v Boots Chemists Southern Ltd.22 In this case, the
defendant owned a pharmacy where consumers could get several drugs and medicines listed
in the 1933 Pharmacy and Poisons Act. The customer chose from open shelves and paid at
the cash register. A pharmacist worked the register. The claimant sued the defendant for
infringing Section 18(1) of the Pharmacy and Poisons Act of 1933, which requires a
registered pharmacist to regulate the sale of poison List items.

The issue was whether the sale happened when the consumer chose the item or when the item
was paid for. The court ruled that the mere display of items on the shelf would not constitute
an offer but an invitation to offer. The customer will make an offer to buy at the register, and
the pharmacist will decide whether to accept or reject that offer.

Leonard v. Pepsico23 In this case, the defendant was convinced by a Pepsi ad that suggested
one could get "points" for buying and drinking Pepsi products and then redeeming them for
more. The ad ended with a student landing a Harrier Jet on campus with the subtitle
"7,000,000 points." According to the condition, extra points could be purchased for 10 cents.
The plaintiff "purchased" the Harrier Jet by sending full payment to the defendant. Later, the
plaintiff sued Pepsi for failing to furnish the Harrier plane.

The issue was whether an advertisement could be considered an offer. The court held that an
advertisement does not constitute a proposal, and the ad would not make a reasonable person
believe that there was an offer. Hence, it was an invitation to offer.

Back to the question, " Do all advertisements lack the quality of willingness to be bound?"
Even though most ads are invitations to offer, that doesn't mean that every ad is an invitation
to offer. As was said above, in some ads, there is a valid offer that can be defined if the terms
are specified in the ad and the advertiser's stated intention to get into a contract is made
abundantly evident by the publication's context.

22
Pharmaceutical Society of Great Britain v Boots Cash Chemists [1953] 1 QB 401.

23
Leonard v. Pepsico, 88 F. Supp. 2d (1999).