Distinguish an offer from an invitation to offer. A published an advertisement for selling his house....A declined to sell his house to B .....Whether B can sue A for the purchase of the house?

Question: Distinguish an offer from an invitation to offer. A published an advertisement for selling his house at a price of Rs. 15 lakhs. A declined to sell his house to B who was ready to pay Rs. 15 lakhs as the price of the house of A. A sold his house to C who agreed to pay the price of Rs. 20 lakhs. Whether B can sue A for the purchase of the house? [DJS 2005]

Find the answer to the mains question of the Law of Contract only on Legal Bites. [Distinguish an offer from an invitation to offer. A published an advertisement for selling his house at a price of Rs. 15 lakhs. A declined to sell his house to B… Whether B can sue A for the purchase of the house?]

Answer

As the prominent jurist Sir Joseph William Chitty says, an offer is “an expression of willingness to contract made with an intention (actual or apparent) that it is to become binding on the person making it as soon as it is accepted by the person to whom it is addressed”

Section 2(a) of the Indian Contract Act is very explicit in defining the term offer/proposal as-

“When one person signifies to another his willingness to do or to 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”

An invitation to offer is a mere ascertainment of whether an offer can be obtained with a margin. It merely shows a readiness towards offers and not an intentionally made term specific communication of any sort of proposal.

An advertisement which envisages that the advertiser will enter into unilateral contracts will usually be found to have amounted to a proposal. However, advertisements which envisage that the advertiser will enter into bilateral contracts are more often found to be invitations to offer.

The Hon’ble Supreme Court in the case of Chaturbhuj Vithaldas Jasani v. Moreshwar Parashram [AIR 1954 SC 236] observed that as a general rule, advertisements are only considered as an invitation to offer and not 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 applying the same logic to the present case at hand, the quotation of the price of a house in the newspaper does not constitute to be an offer. The advertisements in newspapers or magazines would not be offers because it is merely published with the aim of making an invitation to offer. In the present case, A made an invitation to offer in the newspaper to sell his house at Rs. 15 Lakhs but when B in lieu of invitation came to B to pay the said amount, he is said to be making an offer which is entirely at the sweet will of the other party, i.e. A whether to accept that offer or not. Therefore, there lies no remedy in favour of B to sue A for the purchase of the house.

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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