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Mercantile Laws-I

Notes 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.
Implied offer. An offer, implied from the conduct of the parties or from the circumstances of the
case, is known as implied offer.
Some examples of different types of offers.

1. A real estate company proposes, by a letter, to sell a flat to Rajiv at a certain price. This is
an offer by an act by written words (i.e., letter). This is also known as an express offer.
2. If the company proposes, over telephone, to sell the flat to Rajiv at a certain price then this

is an offer by an act (by oral words). This is an express offer.

3. A company owns a fleet of motor boats for taking people from Mumbai to Goa. The boats
are in the waters at the Gateway of India. This is an offer by conduct to take passengers
from Mumbai to Goa. Even if the incharge of the boat does not speak or call the passengers,
the very fact that the motor boat is in the waters near Gateway of India signifi es company’s
willingness to do an act with a view to obtaining the assent of other(s) (i.e., would-be
passengers). This is an example of an implied offer.

4. Akbar, a creditor, offers not to file a suit against Begum, a debtor, if the latter pays him the

amount of ` 2000 outstanding. This is an offer by abstinence or omission to do something.
2.3 Differences 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.

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