Did not execute orders for supply | ‘A’ sends a price list of goods to ‘B’ on the latter’s request. B places an order on dealer A for goods specified in the price list on prices quoted in said list. A did not execute orders for supply. What is B’s remedy, if any?

Question: Did not execute orders for supply | ‘A’ sends a price list of goods to ‘B’ on the latter’s request. B places an order on dealer A for goods specified in the price list on prices quoted in said list. A did not execute orders for supply. What is B’s remedy, if any? [DJS 1980]

Find the answer to the mains question of the Law of Contract only on Legal Bites. [Did not execute orders for supply | ‘A’ sends a price list of goods to ‘B’ on the latter’s request… A did not execute orders for supply. What is B’s remedy, if any?]

Answer

Section 2(a) defines an Offer/proposal as “when one person signifies to another his willingness to do or abstain from doing anything, with a view of obtaining the assent of that other to such act or abstinence, he is said to make a proposal.”

However, Invitation to offer, as the word again suggests, is not the same as the offer. It acts as a mere facilitator in letting the party come to the spot of contract formation.

Hence, an invitation can never be compared with an offer. The former is a mere ascertainment of whether an offer can be obtained with a margin. After all, it merely shows a readiness towards offers and not an intentionally made term specific communication of any sort of proposal.

The difference also emanates from what the intention of the person is. The Calcutta High Court in the case of Bajinath v. Ksetrahari Sarkar, [AIR 1955 Cal 210] has explained the fine line of distinction by invoking this principle only. It was held that so long as one of the parties to the transaction can back out at one’s free will and choice, there can be said to exist no binding and concluded contract, although they may have an agreement on material terms.

Thus, it is pertinent to mention the essential principles of the Indian Contract Act:

• Offer is distinguished from Invitation to offer.
• An offer, only when is accepted by the other party, becomes a promise.

When a bookseller merely sends a catalogue of his books with the price mentioned therein in the list, he is not said to have made an offer it is in fact a mere invitation to other so that the other party can make an offer upon the price mentioned in the catalogue.

Similarly, when an “offer” is made by one person to another, it doesn’t by itself create a contract unless such offer is accepted by the other and communication of such acceptance to the offeree is not complete. In this regard, section 2(b) of the Contract Act states that:

“When the person to whom the proposal is made, signifies his assent thereto, the proposal is said to be accepted. Proposal when accepted becomes promise.“

So it is only when an offer assent is given by the other party, it becomes a promise, thus it ripes into a binding agreement between parties because the agreement is nothing but an accepted proposal.

Applying the above provisions to the present case at hand, where 'A’ sent a price list of goods to B, that in the strict sense of law is not an offer but in fact is merely an invitation to B to make an offer. Thus, it is only when B places his order to A for goods specified in the price list, he is said to have made an offer. Upon such an offer, it is the sweet will of A to accept or reject the offer. Because in the present case, A did not supply the goods to B, it implies that A had not accepted the offer of B and thus when an offer is not accepted, it did not result in an agreement to form a binding contract. Therefore there lies no remedy in favour of B.

---

Law of Contract Mains Questions Series: Important Questions for Judiciary, APO & University Exams

1. Law of Contract Mains Questions Series Part-I
2. Law of Contract Mains Questions Series Part-II
3. Law of Contract Mains Questions Series Part-III
4. Law of Contract Mains Questions Series Part-IV
5. Law of Contract Mains Questions Series Part-V
6. Law of Contract Mains Questions Series Part-VI
7. Law of Contract Mains Questions Series Part-VII
8. Law of Contract Mains Questions Series Part-VIII
9. Law of Contract Mains Questions Series Part-IX
10. Law of Contract Mains Questions Series Part-X