‘A’ firm dealing with readymade garments advertised about clearance sale of their stock. ‘Z’ a customer visits shop… Discuss. Whether a contract had been concluded?

Question: ‘A’ firm dealing with readymade garments advertised about clearance sale of their stock. ‘Z’ a customer visits shop, picks up a trouser from the lot with a price tag of Rs. 500, takes it to Salesman and asks him to pack it and prepare Bill.

Salesman discovers that trousers in question should have been in a lot of articles with a price tag of Rs. 700 and refuses to sell trouser telling that it was wrongly put in a lot of articles with a price tag of Rs. 500. Can ‘Z’ customer compel ‘A’ firm to sell the trouser at Rs. 500? Discuss. Whether a contract had been concluded? [Punjab JS 2007]

Find the answer to the mains question of the Law of Contract only on Legal Bites. [‘A’ firm dealing with readymade garments advertised about clearance sale of their stock. ‘Z’ a customer visits shop… Discuss. Whether a contract had been concluded?]

Answer

The present case is a mere invitation to offer. As the word again suggests, this 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. In the case of Bajinath v. Ksetrahari Sarkar, AIR 1955 Cal 210, Calcutta High Court 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.

As a general rule, they are only considered as an invitation to offer and not an offer per se, since an agreement can only be termed to come into existence when the invitee places an order and the invitor accepts the same. By the same logic, quotation of prices does not constitute to be an offer.

At a shop window, there are goods being placed with a price tagged. They are not naturally, offers. Even the goods displayed at a self-service shop and the indication of the price of petrol at a petrol pump would be a display which is definitely not offered.

Thus, in the present case at hand, where A’ firm dealing with readymade garments advertised about clearance sale of their stock was merely an invitation to offer to the interested customers. ‘Z’ a customer visits shop, picks up a trouser from the lot with a price tag of Rs. 500, takes it to Salesman and asks him to pack it and prepare the bill, is actually said to make an offer to the firm towards buying the trouser.

However, later Salesman discovers that the trousers in question should have been in a lot of articles with a price tag of Rs. 700 and refuses to sell trouser telling that it was wrongly put in a lot of articles with a price tag of Rs. 500. Thus, A refuses to accept the offer made by Z and hence contract is not concluded, it remained merely at the stage of offer only and never saw the light of the conclusion of an agreement. Hence, ‘Z’ customer cannot legally compel ‘A’ firm to sell the trouser at Rs. 500.

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

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