Proposal under Indian Contract Act 1872

Pharmaceutical Products of India Ltd. v. Gwalior Chemical Works Ltd. (1960)

In this case, the court held that a price list is an invitation to treat and not an offer or proposal. The court determined that a contract is only formed when an offer is made by one party and accepted by the other.

Fisher v. Bell (1961)

This case established the principle that a display of goods in a shop window or on a shelf is generally an invitation to treat and not an offer. The customer’s offer to purchase the goods at a certain price would constitute a proposal, and the shop owner’s acceptance of the proposal would form a binding contract.

Harvela Investments Ltd. v. Royal Trust Co. of Canada (1986)

This case established the principle of the “invitation to tender,” which is a process by which a party invites potential contractors to submit bids for a project. The court held that an invitation to tender is not an offer, but rather an invitation to submit offers.

Mohanlal v. Kashiram (1962)

In this case, the court held that an advertisement for the sale of property is an invitation to treat and not an offer. The court ruled that a contract is only formed when an offer is made by one party and accepted by the other.

Harvey v Facey (1893)

In this case, the plaintiff (Harvey) telegraphed the defendant (Facey) asking if he would sell certain property and, if so, at what price. The defendant replied with a telegraph that simply stated the lowest price he would accept for the property. The plaintiff then claimed that the defendant had made an offer to sell the property at that price, which he had accepted by his subsequent telegraphs.

The court, however, held that the defendant’s telegraph was not an offer to sell the property, but rather a mere statement of the lowest price he would accept. The court ruled that the defendant had not made any offer, and therefore there was no contract between the parties.

The court further explained that an invitation to treat is not an offer, but rather an invitation to commence negotiations or discussions. The court held that the defendant’s telegraph was an invitation to treat, and not an offer to sell the property.

Balfour v Balfour is a landmark case in contract law that addresses the issue of intention to create a legal relationship. The case was decided by the English Court of Appeal in 1919.

Facts:

Mr. Balfour was a British civil servant stationed in Ceylon (now Sri Lanka) in 1915. His wife, Mrs. Balfour, stayed in England due to health reasons. Before leaving, Mr. Balfour promised to pay his wife a monthly allowance of £30 until she could join him. Later, the couple separated, and Mrs. Balfour sued her husband for breach of contract, seeking the unpaid allowance.

Decision:

The court held that there was no contract between Mr. and Mrs. Balfour. The promise made by Mr. Balfour was considered a social arrangement between husband and wife, not intended to create a legal relationship. The court emphasized that not all agreements between family members or spouses are legally binding. For a contract to be enforceable, there must be an intention to create a legal relationship.

Merritt v Merritt is another landmark case in contract law dealing with the intention to create a legal relationship. The case was decided by the English Court of Appeal in 1970.

Facts:

Mr. and Mrs. Merritt were a married couple who had separated but not yet divorced. They jointly owned a house and agreed to transfer ownership to Mrs. Merritt in exchange for her agreement to pay off the remaining mortgage. The couple signed a written agreement to this effect. After Mrs. Merritt paid off the mortgage, Mr. Merritt refused to transfer the ownership of the house to her. Mrs. Merritt sued for breach of contract.

Decision:

The court held that there was a valid and enforceable contract between Mr. and Mrs. Merritt. The signed written agreement was evidence of their intention to create a legal relationship, and both parties had given consideration. Mrs. Merritt agreed to pay off the mortgage, and Mr. Merritt promised to transfer ownership of the house.

In this case, the plaintiff, Lalman Shukla, was employed by the defendant, Gauri Dutt, as a munim (a clerk). Gauri Dutt's nephew had gone missing, and Lalman was sent to find the boy. While Lalman was away searching, Gauri Dutt issued handbills offering a reward of Rs. 501 to anyone who found the boy.

Lalman eventually found the boy and later claimed the reward. However, he was unaware of the handbills and the reward offer when he found the boy.

Decision:

The court held that Lalman Shukla was not entitled to the reward. The reasoning was that Lalman did not know about the reward offer at the time he found the boy, and therefore, he could not have accepted the offer. For an offer to be validly accepted, the offeree must have knowledge of the offer and must act with the intention of accepting it.

Tinn v. Hoffman (1873)

Facts:

In this case, the plaintiff and the defendant were negotiating the sale of a quantity of iron. The plaintiff sent a letter offering to sell the iron at a certain price, and the defendant sent a letter in response, also offering to buy the iron at the same price. However, neither party had received the other’s letter at the time they made their offer.

Decision:

The court held that there was no contract between the parties, as neither party had accepted the other’s offer. The court emphasized that for a contract to be formed, there must be a clear acceptance of an offer. Since both parties made identical offers simultaneously without knowledge of the other’s offer, there was no mutual assent and therefore no contract.

Hyde v. Wrench (1840)

Facts:

In this case, Wrench offered to sell his farm to Hyde for £1,000. Hyde responded by offering £950, which Wrench rejected. Hyde then attempted to accept the original offer of £1,000, but Wrench refused to sell.

Decision:

The court held that Hyde's counter offer of £950 had rejected the original offer of £1,000. Therefore, there was no longer an offer of £1,000 for Hyde to accept. The case established the principle that a counter offer effectively rejects the original offer and puts forward a new offer for consideration.

Example Case: Carlill v. Carbolic Smoke Ball Company (1893)

Facts:

One landmark case related to the distinction between specific and general offers is Carlill v. Carbolic Smoke Ball Company (1893). In this case, the Carbolic Smoke Ball Company made a general offer through newspaper advertisements promising a reward to anyone who used their product and still contracted influenza. The advertisement stated that the company had deposited £1,000 in a bank to show their sincerity in carrying out the offer.

Decision:

Mrs. Carlill purchased and used the product as directed but still contracted influenza. She sued the company for the reward, arguing that she had accepted the general offer by using the product as directed. The company argued that the advertisement was not a specific offer to Mrs. Carlill, and therefore there was no contract between them.

The court ruled in favor of Mrs. Carlill, holding that the advertisement constituted a general offer that she had accepted by using the product as directed. The court held that the advertisement contained specific terms that could be reasonably interpreted as an offer, and that Mrs. Carlill had provided consideration (i.e., using the product as directed) in exchange for the promise of a reward. The court further held that the deposit of £1,000 in a bank demonstrated the company’s intent to be bound by the offer. This case is often cited as a landmark case on the distinction between specific and general offers.

Bengal Coal Co. v. Homee Wadia & Co. (1912)

Facts:

The Bengal Coal Co. offered to sell a certain quantity of coal to Homee Wadia & Co., stating that the offer would remain open until a specific date. Homee Wadia & Co. did not accept the offer within the specified time frame but attempted to do so after the date had passed. Bengal Coal Co. refused to accept the order, arguing that the offer had lapsed.

Decision:

The court held that the offer made by Bengal Coal Co. was a standing offer. Since it had not been accepted within the specified time frame, the offer had lapsed. The court emphasized that the nature of a standing offer is such that it can only be accepted within the specified period. Once that period has expired, the offer is no longer valid.

Rajendra Kumar v. State of Madhya Pradesh (1977)

Facts:

Rajendra Kumar applied for a post in the state government and was selected for the job. He received an appointment letter stating that he had to report for duty within a specified period, failing which his appointment would be cancelled. Rajendra Kumar did not report for duty within the specified period, and his appointment was cancelled.

Rajendra Kumar challenged the cancellation, arguing that the offer made by the state government was a continuing offer, allowing him to report for duty at any time. The state government maintained that the offer was not a continuing offer, and his appointment was rightly cancelled due to his failure to report within the specified period.

Decision:

The court held that the offer made by the state government was not a continuing offer. The applicant was required to report for duty within the specified period. The court stressed that the terms of the offer must be clear and unambiguous, and in this case, the terms explicitly required reporting within a specific timeframe.