Principle: An offer is different from an invitation to receive offers. For an offer the offer or must have expressed his willingness to contract in terms of his offer with such finality that the only thing that is awaited is the assent of the other party.
Facts: A famous shop in the new market area had put up its new collection of ties on display in the store window with the prices of each tie indicated against it. Tanya decided to buy a tie for her father’s birthday next week. She went to the shop and made an enquiry and also stated that she would return the subsequent week. When she returned after a week to make the purchase, the shop owners had revised the prices and she was asked to pay the new price.
1. The act of placing the goods in the store window with indicated prices was:
(a) An invitation to offer
(b) An invitation to enquire
(c) An offer
(d) All of the above
2. The act of the shopkeepers in quoting the revised price to Tanya was:
(a) Unjustified
(b) Legal
(c) A breach of contract
(d) Illegal
Principles:
- The communication of a proposal is complete when it comes to the knowledge of the person to whom it is made.
- The communication of an acceptance is complete as against the proposer when it is put in the course of transmission to him, so as to be out of the power of the acceptor.
III. The communication if an acceptance is complete as against the acceptor when it comes to the knowledge of the proposer.
Facts: Saransh, a student of IIM Bangalore decided to start a business involving the trade of handicraft products jointly with his friends from B-school. He drew up the plan and sent it along with a formal invitation to accept the plan to Jyoti, Shweta and Vardhan by post in June 2012. Jyoti was out of town on business and the letter remained in her mailbox for two months. Shweta received the letter promptly and after deliberation decided to accept the plan and sent back her acquiescence by post. However, the letter got lost in transit. Vardhan received the letter after fifteen days and made an impulsive decision to support the venture and sent back his reply of acceptance by email that very night.
3. Acceptance of the proposal for Jyoti occurred when:
(a) Saransh received her reply.
(b) Jyoti received the letter
(c) Jyoti’s reply reached Saransh
(d) None of the above
4. Communication of proposal in the case of Shweta was completed when:
(a) Shweta received the letter
(b) Saransh sent the letter
(c) Shweta sent the letter
(d) Saransh received the letter
5. Communication of acceptance as against Vardhan was completed when:
(a) Vardhan received the letter from Saransh
(b) Saransh received the email from Vardhan
(c) Communication is incomplete since Vardhan did not send a letter
(d) Communication is incomplete since the decision was impulsive
6. Communication of acceptance as against Shweta was complete when
(a) Shweta received the letter from Saransh
(b) Shweta sent the letter of acceptance to Saransh
(c) Communication was incomplete since the letter got lost in transit.
(d) None of the above
Principles:
- Any agreement which restrains a person from carrying on a lawful profession, trade or business of any kind is void to that extent.
- It does not matter if the restraint is partial or total, the agreement which restrains trade or profession is void.
III. The action being restrained must be a profession, trade or business for the principle to apply.
- The principle is inapplicable in cases of sale and purchase of goodwill where the seller has to refrain from carrying on business, trade or profession in specified areas for a specific period of time.
- Paying a large sum of money in exchange for including an unreasonable term restraining trade or profession is not acceptable and renders the contract void.
Facts: Varsha owned a chain of shops selling religious books and puja items outside a shop near famous temples in Delhi. Being the oldest shop in most areas, Varsha had a large clientele. Some years later, she decided to sell the chain and accordingly entered into a detailed contract with Vijay. The contract in question contained terms regarding sale of goodwill for which Vijay had agreed to pay a price greater than market calculations. It also contained a clause providing that Varsha would not run any shops in northern India for a period of thirty years from the date of the contract.
7. The clause stopping Varsha from running shops in northern India is:
(a) Valid since partial restraints may be applied
(b) Void since it makes an unreasonable restraint
(c) Valid since the contract involves a sale of goodwill
(d) Void since the contract is uncertain
8. The agreement in question would be considered to be:
(a) Valid
(b) Ambiguous
(c) Void
(d) Onerous
9. In case the clause specified that Varsha could not open up puja shops in Delhi for 20 years the agreement would be:
(a) Valid
(b) Void
(c) Ambiguous
(d) Voidable
10. Owing to the clause barring Varsha from opening up shops:
(a) The entire agreement becomes void
(b) The goodwill sale becomes void
(c) The clause regarding bar on opening shops becomes void
(d) All of the above
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