CONCEPT OF OFFER IN CONTRACT LAW
Definition of an offer is laid down under section 2(a) of the Indian Contract Act, 1872 as “When one person signifies to another, his willingness to do or abstain from doing anything to obtain the assent of the other, to such an act or abstinence, he is said to propose.”
An offer is the most important part of any valid contract. It is of two types – express offer and implied offer - as duly mentioned in section 9 of the Indian Contract Act which states “In so far as the proposal or acceptance of any promise is made in words, the promise is said to be express. In so far as such proposal or acceptance is made otherwise than in words, the promise is said to be implied.”
There were certain landmark cases where the question of a valid offer came into the picture. As in the case of Smith v. Hughes, Mr Smith was the farmer and Mr Hughes was the racehorse trainer. One day Mr Smith went to him and showed him the sample of fresh oats seeds and Mr Hughes ordered 40-50 quarters of oats from him at 34 shillings per quarter. To begin with the contract, Mr Smith sent 16 quarters of the oats to him and when Mr Hughes opened the sack it was full of fresh green oats as shown in the sample but he wanted to have old oats to feed his horses. He refused to pay the amount to him for the delivery and rest of the quantity. Mr Smith filed a case against him stating it’s the breach of contract on the part of Mr Hughes. The court concluded that it’s a valid contract and the validity of the offer didn’t depend on what offeree thinks it to be but what the general person will assume it to be. As in the above case, sending of ‘old’ oats wasn’t mentioned anywhere specifically and as per the situation, a general person will presume that fresh green seeds need to be sent.
There is a difference between an offer and an invitation to offer. In an offer, one party proposes another party to accept it whereas, in an invitation to offer, the party proposes others to propose an offer to which acceptance will be given by the party. As in the case of Pharmaceutical Society of Great Britain v. Boot Cash Chemist, Defendant had made provisions as such that the customers could directly take the prescribed medicine from the rack and a while later pay for them at the till. Plaintiff filed a case against the defendant stating that it’s an unlawful practice and violates provisions of the Pharmacy and Poison Act, 1933 according to which only authorized pharmacist can give medicines. The court held that it’s merely an invitation to offer. Customers offer medicines to the chemist and only after his acceptance they are allowed to take the medicine and hence it didn’t violate the provisions of the Pharmacy and Poison Act of 1933.