THE INDIAN CONTRACT ACT 1872 (1)

For example a bookseller sends a catalogue of books

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Unformatted text preview: okseller sends a catalogue of books indicating prices of various books to many persons. This catalogue is not an offer to sell those books at prices indicated against those books. This is an ‘Invitation to treat.’ If any person is interested in purchasing those books mentioned in the catalogue he may make an offer. Similarly, inviting persons to an auction where goods, which are to be auctioned, are displayed is not an offer for the sale of goods. The intending buyers, who make the bid make an offer. Such an offer, when accepted, by the fall of hammer or in some other customary way, will result in a contract. some Intention to create legal relationship In order that an offer, after acceptance, can result in a In valid contract it is necessary that the offer should be made with an intention to create legal relationship. Promise in the case of a social engagements is generally without an intention to create legal relationship, such an agreement cannot be considered to be a contract. Thus an agreement to go for a walk, to go to movie, to play some game, or entertain another person with a dinner, cannot be enforced in a court of law. Sometimes the party may expressly mention that it is not a formal or legal agreement, whereas in some other cases such an intention could be presumed from their agreement. intention The test to know the intention of the parties is objective The and not subjective. Merely because the promisor contends that there was no intention to create obligation would not exempt him from liability would In Rose and Frank Co. Vs. Crompton & In Brothers Ltd. the agreement between the Brothers parties provided ; parties “ This arrangement is not entered into ………. as a formal or legal jurisdiction in the Law Courts……. that it (the agreement) will be carried through by parties with mutual loyalty and friendly co-operation.” One of the parties made a breach of this One agreement. In an action by the other party to enforce the agreement, it was held that since the agreement had provided that it was not a formal or legal agreement the same was not enforceable.. enforceable.. In the case of Meritt Vs. Meritt, (1970) the In Meritt husband and wife were the joint owners of a building which was subject to a mortgage to a building society. The husband left the matrimonial home to live with another woman. At that time, at the insistence of the wife, the husband signed a note saying that the wife will pay all outstanding amounts in respect of the house and in return “I will agree to transfer the house property into your sole ownership”. It was property It held that in this case it was clear that the parties intended to create legal relationship and, therefore, the husband was bound by the contract contract Communication of offer Communication An offer when accepted results in a contract. An An offer can be accepted only after the same has come to the knowledge of the offeree. It means that the offer has to be communicated to...
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