BIRLA INSTITUTE OF
TECHNOLOGY
 MESRA-835215, RANCHI- NOIDA
CAMPUS

Department of Management Semester

  1
PRESENTED BY:-

PRERNA RAJ MBA/45003/22

SNEHA GUPTA MBA/45012/22
DIVYANSH SHARMA MBA/45021/22
  Offer and Invitation to Offer
DEFINATION:
Invitation to offer: An invitation to offer is not an offer, but an indication of a
person’s willingness to negotiate a contract.
Offer: When one person signifies his willingness to do or abstain from doing
something with a view to obtain the assent of another person is called an offer.
PURPOSE:
Invitation to offer: Invitation to Offer is made to get an offer.
Offer: Offer is made with an objective to get accepted
DEFINED IN:
Invitation to offer: It is not defined in the  Indian Contract Act, 1872.
Offer: It is defined in section 2(a) of the Indian Contract Act, 1872
ACCEPATANCE:
Invitation to offer: An Invitation to Offer becomes an offer.
Offer: Offer becomes an agreement when accepted

LEGAL CONSEQUENCES:
Invitation to offer: Invitation to Offer does not give rise to legal consequences.
Offer: Offer gives rise to legal consequences

MADE TO:

Invitation to offer: Invitation to offer can be made to a group of people.

Offer: Offer is made to a particular party
 FISHER V BELL [1961]

FACTS OF THE CASE:

 The respondent was a shopkeeper of a retail shop in Bristol whereas the appellant
was a chief inspector of police.
 A police constable walked past the shop and saw the display of flick knife with price
attached to it.
 The police constable examined and inform the respondent that the knife was a
“flick knife”.
 The appellant contended that the display of flick knife was in violation of Section
1(1) of the Restriction of Offensive Weapons Act 1959 (the Act) which was prohibited
under the Act.
 However, the respondent claimed that he did not offer the knife for sale within the
meaning of the Act of 1959
ISSUES RAISED:
The issue was whether the display of the knife constituted an offer for sale (in which
case the defendant was guilty) or an invitation to treat (in which case he was not).

RULE OF LAW WHICH APPLIES:

 The justices held that the words “offer for sale” ought to be construed in the
meaning in the law of contract, and that the defendant’s action merely constituted
an invitation to treat, not an offer. Hence, the case was dismissed.

 The plaintiff then appealed to the Queen’s Bench The justice in that case referred
to the putting of an article in the shop window as exposing the article, instead of
making an offer.

 The lack of the words “exposing for sale in the Act means that only a true offer
would be an offence under the Act. Hence, the respondent was not guilty of the
offence with which he was charged.
STATING THE APPLICATION OF RULE OF LAW WHICH APPLIES:

 According to Section 1(1) of the Restriction of Offensive Weapons Act

1959, a flick knife cannot be manufactured, sold, hired, offered for sale
or hire, lent or given to another person.

 However, there is no prohibition against the exposing for sale of a flick

knife in the section. Had the section contained the words “expose for
sale”, the respondent in the present case would have been guilty of the
offence under the Act.
JUDGEMENT:
 The display of the knife was not an offer of sale but merely an invitation to treat,
and as such the defendant had not offered the knife for sale within the meaning of
Section 1(1) of the Act.

 In legal terms its position in the window was inviting customers to offer to buy it.

 It is well established in contract law that the display of an item in a shop window is
an invitation to potential customers to treat.

 The defendant was therefore not guilty of the offence with which he had been
charged.
 Carlill v/s Carbolic Smoke Ball Company

FACTS OF THE CASE:

 The Carbolic Smoke Ball Company (defendant) advertised in the Pall Mall Gazette
about their product.
 they promised to pay 100 pounds as compensation to anyone who got influenza
after using their ball three times daily for two weeks as per the instructions
printed.
 The advertisement also stated that they have deposited 1000 pounds with the
Alliance bank as an assurance.
 Mrs. Carlill (plaintiff) after going through the advertisement purchased the smoke
balls and used it as per the directions but subsequently caught influenza.
 The plaintiffs claim was refused by the defendant and therefore, she brought a
suit against them for the recovery of the amount.
RULE OF LAW WHICH APPLIES:
1.Unilateral offer for the sale of goods via advertisement waves of the rule of
notification of acceptance.

2. An advertising scheme with a reward for the performance of any act can be

considered an express contractual promise to pay.

ISSUE RAISED:
1.Whether there was any binding effect of the contract between the parties? 
2.Whether the contract in question required a formal notification of acceptance? 
3.Whether Mrs. Carlill was required to communicate her acceptance of the offer to the Carbolic
Smoke Ball Company? 
4.Whether Mrs. Carlill provided any consideration in exchange for the reward of £100 offered by
the company?
JUDGEMENT:
The Court of Appeal unanimously rejected the company’s arguments and held that there was a
fully binding contract for £100 with Mrs. Carlill

Among the reasons given by the three judges were

(1) That the advertisement was a unilateral offer to the entire world

(2) The satisfying conditions for using the smoke ball constituted acceptance of the offer.

(3) That purchasing or using the smoke ball constituted good consideration,
and people buying smoke balls by relying on the advert was a clear benefit to Carbolic.

(4) That the company’s claim that £1000 was deposited at the Alliance Bank showed the serious
intention to be legally bound