Page 25 - DCOM103_COMMERCIAL_LAW

Commercial Law

Notes may be accepted by any one by complying with the terms of the offer. The celebrated case of
Carlill vs. Carbolic Smoke Ball Co. (1813) 1 Q.B.256 is an excellent example of a general offer.

Example: A Patent Medicine company advertised that it would give a reward of £100 to
anyone who contacted influenza after using smoke balls of the company for a certain period

according to the printed directions. Mrs. Carlill purchased the advertised smoke ball and

contacted influenza inspite of using the same according to the printed directions. She claimed
the reward of £100. The company resisted the claim on the ground that advertisement was only
an invitation to offer. They argued further that no offer was made to her, and that in any case she
had not communicated her acceptance assuming the advertisement was an offer. She filed a suit

for the recovery of the reward. Held that the advertisement in such type of cases amounted to
general offers. She could recover the reward as she had accepted the offer by complying with the
terms of the offer.

Philosophy underlying general offers. The general offer creates for the offeror a liability in favour

of any person who happens to fulfill the conditions of the offer. It is not at all necessary for the
offeree to be known to the offeror at the time. When the offer is made; he may be a stranger, but
by complying with the conditions of the offer, he is deemed to have accepted the offer.

2.3 Difference between Offer and Invitation to Offer

An offer is to be distinguished from an invitation to offer. A prospective shareholder by fi lling up
a share application form, usually attached to the prospectus, is making the offer. An auctioneer
at the time of auction inviting offers from the bidders is not making an offer. The price lists,
catalogues and inviting tenders and quotations are mere invitations to offer. Likewise a display
of goods with a price tag on them in a shop window is construed an invitation to offer and not
an offer to sell.

Example: In a departmental store, there is self-service. The customers pick up articles and
take to the cashier’s desk to pay. The customer’s action in picking up a particular article is an
offer to buy. As soon as the cashier accepts payment, a contract is entered into. However, there
are certain exceptions to this. Thus, where a store advertises that it will give a free gift or a special

discount to “the first 100 customers” or something like that, it may be anything that requires
special effort on the part of the customer. If so, the store has made an offer which he may accept
by being among the 100 customers. Similarly, sale promotion schemes requiring customers to do
anything special are offers.

2.4 Essentials of a Valid Offer

1. The terms of the offer must be definite, unambiguous and certain or capable of being made

certain. If the terms of the offer are loose, vague, ambiguous or uncertain, it is not a valid
offer.
2. An offeree must have knowledge of the offer before he can accept it. The offer must be
communicated to the other party. The communication of offer is complete only when it
comes to the knowledge of the offeree. If the offer is lost on the way in transit it is no offer.

This is true of specific as well as general offers.
3. An offer cannot contain a term the non-compliance of which may be assumed to amount
to acceptance. An offeror cannot say that if the offeree does not accept the offer within
two days the offer would be deemed to have been accepted. Such a burden cannot be
imposed on the offeree. It is for the offeree to accept the offer or not; and therefore, he may
communicate his acceptance accordingly.

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