Invitation to Treat

• Advertisements: General Offer

• Display of goods for sale
• Carlill v Carbolic Smoke Ball Co [1893] 1 QB 256
• Harvey v Facey [1893] AC 552
– ‘Will you sell us Bumper Hall pen, telegraph at what price’
– ‘lowest price for the pen is 100’
• Powell v Lee [1908] 99 L Y 284
• MC Pherson v Appanna [AIR 1951 SC 184]
– ‘wont accept less than 10,000’.
 Modes of Offer

• Time table
• Tenders and Auctions [Harris v Nickerson]
• Restaurant menu card
• ATM or vending machines
 Termination of Offer
• ‘An offer can be withdrawn at any time
before it is accepted’.
• Distinction between lapse of offer and
revocation
• Notice, Death, incapacity, lapse of time
• Errington v Errington [1952] Father promises to son
and daughter in law that if they pay mortgage amount of the
property, the property would be theirs
 Acceptance
• Acceptance must be in toto: Mirror Image Rule
• Manner/mode of acceptance [sec. 7]

By an act promise
• Is Silence an acceptance ?
– Felthouse v Bindley 1862 11 CB 869.: Uncle tells his nephew
– ‘If I hear no more from you, the horse in mine’.
– The nephew during an auction stated to the auctioneer to reserve the
horse for his uncle
• Silence and thereafter a ‘conduct’ of acceptance ?
– LIC of India v Vasireddy AIR 1984 SC 1014
– 27th Dec. 1960 filing of proposal for LIC
– Proposer died on 12th Jan 1961
• Can Acceptance be revoked ?
 Acceptance: contd
• Is Communication of Acceptance essential?
• Acceptance through post: Mailbox rule
– Adams v Lindsell [1818 1 B& Ald. 681.
- 2/9/1817, defendants offered to sell a quantity of wool at a
certain price and expected the answer by post, the letter
reached the plaintiff on 5th, the same day, he posted the
acceptance, which reached the defendants on 9th.
- The defendants waited till 7th and on 8th sold the same wool
to another person
- Is there an acceptance ?
• Who can communicate the acceptance ?
• When is a unilateral contract accepted ?
When does the mailbox rule apply?

• Q. Is revocation of acceptance
possible ?
• Henthorn v Fraser 1892
– Secretary signed a note giving option to purchase for 14
days at P-750, next day withdraws through post at 12-1.00
pm, claimant posts the acceptance on the same day between
3-4 pm.

• Which ever communication reaches

first is valid
 Offer and Acceptance: Where the
contract is made?
• It determines the time of forming the
contract
• It stipulates the jurisdiction of the court;
and
• It affixes the rights and obligations of
parties

• Is the contract complete at the instance

and place of the acceptor or offeror?
 Chapter-3: Capacity to
Contract
• Two kind of ‘persons’
– Natural
– Legal or juristic person
• Natural Person

Latent incapacity patent incapacity

[infancy, unsoundness, lunacy] [B’cos of Status: insolvency,
alien enemy, Married]
 Legal person

• Ultra vires winding up any other

Acts of sovereign, Corporate and companies
 Liability of Minors in Contract

• Sec. 68: ‘if a person, incapable of entering

into a contract is supplied with necessaries in
life, the person who supplies is entitled to be
reimbursed’
• Doyle v White City Stadium 1935 1 KB
110,
 Insanity/lunacy
• Inder Singh v Parmeshardhni Singh
AIR 1957 Pat. 49
• Mathews v Baxter [1873, L R 8 Ex. 132]
 Other Incapacities
• Political Status
– Alien enemy
– Foreign sovereigns and ambassadors
• Mighell v Sultan of Johore [1894, 1 QB 149]
• [Also see sec. 86 of CPC which provides that in case of suit against
a foreign sovereign, the consent of the Central Govt is required]
• Corporation
– Ashbury Railways Carriage Co. V Riche 1875, 7 HL
653. [an agreement for purchase of railways which
was not mentioned in the MOA was held ultra vires]
– Q. Does Ultra vires means void contract ? Are third
parties protected from such ultra vires acts ?
 Other Incapacities
• Married Status
• Professional status: can an advocate sue
in contract, his client for fee ?
 Chapter 4: Consideration
• Sec. 10 requires Lawful consideration as an
essential factor for giving enforceability to an
agreement.
• Sec. 25 an agreement without consideration is
void [nudum pactum]
• Sec. 23 and 24 deal with circumstances in
which the consideration will be treated
unlawful
 Charitable subscriptions
• Kedarnath v Gorie Mohamed [1886, 14 Cal. 64]
• De La Bere v Pearson [1908, 1 K B 280]
• Chinnaya v Venkataramaya [ILR 4 Mad 137 [1881]
• Lampleigh v Brathwait [80 ER 255]