FACTS OF THE CASE:
The respondent was the owner of a shop situated in The Arcade, Broadmead, at which premises he carried on business as a retail shopkeeper under the name of Bell’s Music Shop whereas the appellant was a chief inspector of police.
The police constable walked past the shop and saw displayed in the window of the shop amongst other articles a knife, the words ” Ejector ” knife—4s.” were printed with a price attached to it. The police constable then entered the shop and told the defendant that he has reason to believe it was a flick knife displayed in the shop window. He asked if he can examine the particular knife.
Then the defendant removed the knife from the window. The police constable first examined the knife and then took it away after informing for examination by the Superintendent of Police. Later on in the evening he returned to the defendant’s premises and informed him that in his opinion it knife was a flick knife.
The constable informed the defendant that he would be reported and tried in court for offering for sale a “flick knife”.
The appellant contended that the display of the particular knife was not in violation of Section 1(1) of the Restriction of Offensive Weapons Act 1959 because by displaying the flick knife in the shop window, the respondent was offering the flick knife for sale, which was prohibited under the Restriction of Offensive Weapons Act.
But, the respondent claimed before the constable that he did not offer the knife for sale within the meaning of the Restriction of Offensive Weapons Act, 1959.
Whether the knife exhibited in the shop window with the price tag behind was an offer for sale within the meaning of Section 1 (1) of the Restriction of Offensive Weapons Act, 1959?
DECISIONS GIVEN BY COURTS:
The case was first tried in the Magistrates Court in Bristol. It was claimed by the prosecutor that the defendant displayed the knife in the window with the price tag, an act is being carried out with the ultimate object of attracting the attention of a buyer of such knife and selling the same to such ultimate buyer. The knife for sale was clearly within the meaning of the Restriction of Offensive Weapons Act, 1959.
It was contended on behalf of the defendant that he had never offered the knife for sale and the sale of the knife was never within the meaning of Section 1(1) of the Restriction of Offensive Weapons Act.
The justices thought that in the absence of a definition in the Act, the words ” offer for sale ” must be construed as if they were in the law of contract. In the given case the defendant’s action was merely an invitation to treat and not a firm offer that required the customer’s acceptance to make it a contract of sale. Accordingly, the case was dismissed. Then the prosecutor decided to appeal.
Queen’s Bench Division of the High Court of England and Wales
The prosecutor then appealed to the Queen’s Bench Division of the High Court of England and Wales. Lord Parker decided to distinguish the present case from that of Wiles v Maddison. In that case, the judge referred to putting an article in the shop window as exposing the article, instead of making an offer. It is clear that as per the ordinary law of contract the display of an article with a price tag on it in a shop window is merely an “invitation to treat”.
It is not an offer for sale and the acceptance of which constitutes a contract. Lord Parker was unable to find an argument in favor of the appellant strong since the order in Section 1(1) of the Restriction of Offensive Weapons Act 1959 only contained the words “offer for sale”. In the present case, he found that there was merely an invitation to offer. The lack of the words “exposing for sale” in the Act means that only a true offer would be an offense under the Act.
Hence, the respondent was not guilty under Section 1(1) of the Restriction of Offensive Weapons Act under which he was charged.
APPLICATION OF RULE OF LAW:
In the present case, the judges applied the literal rule of interpretation while interpreting Section 1(1) of the Restriction of Offensive Weapons Act, 1959. The literal rule states that the words in the statute should be given natural, ordinary, and grammatical meaning.
However, the application of the literal rule of statutory interpretation does not always result in a fair outcome and sometimes leads to absurd judgments. As per Section 1(1) of the Restriction of Offensive Weapons Act 1959, a flick knife cannot be manufactured, sold, hired, offered for sale, hire, lent, or given to any other person.
But, there is no prohibition against exposing it for sale in the section. If the section contained the words “expose for sale”, the respondent in the present case would have been held guilty of the offense under the Restriction of Offensive Weapons Act, 1959.
The court held that following the general principles of contract law, the display of the knife was not an offer of sale but it was merely an invitation to treat, and the defendant had not offered the knife for sale within the meaning of Section 1(1) of the Act.
In ordinary language a layman might consider the knife to be offered for sale, in legal terms, it is inviting customers to offer to buy it. In contract law, the display of an item in a shop window is an invitation to potential customers. The defendant was therefore not guilty of the offense for which he was charged.
LEGAL PROVISION OF LAW INVOLVED
Offer and invitation to offer
The key difference between offer and invitation to offer basic and lies mainly lies in the ‘intention’ of the parties. An offer directly allows the other party to enter into a contract as soon as it is accepted, whereas an invitation to offer invites the other party to enter into negotiations and make an offer to the seller. For example, when we go to a toyshop, the mere display of the toys in the shop is merely an invitation to treat the general public. Anyone passing by the shop can choose to come to buy one of his toys. Most of the advertisements are not offers but only invitations to offer.
In the landmark case of Ghaziabad Development Authority v Union of India, the Supreme court held that an “Advertisement issued by a housing development authority offering a scheme is an invitation to offer”.
- Bank of India v/s OP Swaranakar
Hon’ble Supreme court held that “A voluntary retirement scheme offered by an employer is not a proposal but merely an invitation to treat the application made by employees constitutes the proposal to be accepted by the employer.”
Advertisement and display of goods
Neither quotation of price nor a letter asking for quotation or terms are offered they are invitations for offers. Where orders are invited, a contract comes into being only when the invitee places an order and the inviter acceptances the same.
An indication of the price of petrol at a petrol pump or advertisement announcing schemes for the purchase of a land plot or house or special offers in catalogs are not offering but an invitation for making offers.
Every display and advertisement may not always be an invitation to offer. Advertisement promising to pay money to a person who used a product and caught influenza has been considered to offer. The test is the intention of the maker. It is considered to be an offer if the person making the statement shows the intention to be bound immediately or accepted.
What is an Auction?
An auctioneer’s request for bids is an invitation to the customers to bid. The bid constitutes the offer that is later accepted by the auctioneer on the fall of the hammer. The bidder has the opportunity to withdraw the bid until it is accepted.
An advertisement announcing that an auction will be held on a particular day is merely an invitation to treat and does not create a binding effect on the auctioneer to sell the goods nor make him liable on contract to indemnify the persons who have incurred expense to attend the sale.
What is a Tender?
An invitation for tender for the supply of goods or for carrying out work is not an offer but is an invitation to offer.
The mere fact that a person who makes the highest tender cannot be entitled to claim acceptance but if the person inviting the tender states that the highest offer to buy is accepted the invitation to tender is regarded as an offer or an invitation to submit offers with an undertaking to accept the highest offer.
The contract will be concluded as soon as the highest offer to buy is communicated to the other party.