M/s Jainsons, a firm dealing in readymade garments advertises in newspapers about the Clearance Sale of their stocks. ..... Discuss whether the contract had been concluded.

Question: M/s Jainsons, a firm dealing in readymade garments advertises in newspapers about the Clearance Sale of their stocks. C, a customer visits the shop, picks up a shirt lying in the lot with a price tag of Rs. 400/- takes to a salesman, asks him to pack the shirt, and prepare the bill. Salesman discovers that the shirt in question should have been in a lot of articles with a price tag of Rs. 500/- and refuses to sell the shirt to C and tell him it was wrongly put in the lot of articles with a price tag of Rs. 400/-. Can C compel the firm Jainsons to sell the particular shirt to ‘C’ at Rs. 400/-? Discuss whether the contract had been concluded. [DJS 1996]

Find the answer to the mains question of the Law of Contract only on Legal Bites. [M/s Jainsons, a firm dealing in readymade garments advertises in newspapers about the Clearance Sale of their stocks. C, a customer visits the shop, picks up a shirt lying in the lot with a price tag of Rs. 400/- takes to a salesman, asks him to pack the shirt, and prepare the bill. Salesman discovers that the shirt in question should have been in a lot of articles with a price tag of Rs. 500/- and refuses to sell the shirt to C and tell him it was wrongly put in the lot of articles with a price tag of Rs. 400/-. Can C compel the firm Jainsons to sell the particular shirt to ‘C’ at Rs. 400/-? Discuss whether the contract had been concluded.]

Answer

In this scenario, the issue revolves around whether a valid contract had been concluded between the customer 'C' and the firm 'Jainsons' for the purchase of the shirt at the price of Rs. 400/-.

For a contract to be valid, it must fulfill certain essential elements, such as offer, acceptance, consideration, competency of parties, free consent, and lawful object. Let's analyze whether these elements were met in this case:

Offer: The firm Jainsons advertised a Clearance Sale of their stocks in newspapers, which can be considered as an invitation to offer or an invitation to treat. An invitation to offer is an invitation to others to make an offer, and it is not a definite proposal to form a contract.

Acceptance: 'C' visited the shop, picked up a shirt with a price tag of Rs. 400/-, and took it to the salesman, asking him to pack the shirt and prepare the bill. At this point, 'C' made an offer to buy the shirt at the displayed price. However, the salesman discovered that the shirt was mistakenly placed in the lot with a price tag of Rs. 400/- and informed 'C' of the error. In doing so, the salesman rejected 'C's offer, and no acceptance occurred.

Consideration: Consideration refers to something of value exchanged between the parties. In this case, the consideration would be the payment of Rs. 400/- by 'C' in exchange for the shirt. Since no acceptance occurred, there was no agreement on the consideration.

Competency of Parties: There is no indication that either party lacks the legal capacity to enter into a contract.

Free Consent: Since there was no acceptance of 'C's offer by the firm, there was no meeting of minds (consensus ad idem) between the parties, and thus, free consent was not established.

Lawful Object: The object of the contract should be lawful. In this case, the object was the purchase of a shirt, which is a lawful object.

Based on the analysis, it can be argued that a valid contract was not concluded in this situation. The firm 'Jainsons' did not accept 'C's offer to buy the shirt at Rs. 400/- due to the pricing error, and hence, there was no mutual agreement between the parties. As a result, 'C' cannot compel the firm 'Jainsons' to sell the particular shirt at Rs. 400/- as no contract was formed.

The Contract Act requires a meeting of minds and a mutual agreement between the parties to form a valid contract. In this case, since the firm rejected 'C's offer before acceptance, no contract came into existence, and 'C' cannot enforce the sale of the shirt at the mistakenly displayed price.