Question

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A notice that the goods stated in the notice will be sold by tender. Is the notice a valid offer to sell?

Answer 1

Validity of an agreement depends upon certain elements and offer is one of them An offer is the first step in the formation of a contract. An offer is a proposal by one person to another to enter into a contract. The term offer is defined under Section 2(a) as when one person signifies to another, his willingness to do or abstain from doing anything with a view to obtaining the assent of the other, to such an act or abstinence, he is said to make a proposal or an offer. But certain exceptions are there to this definition such as tender which generally means an invitation to trade under the terms on offer. A tender is not an offer but an invitation to offer i.e. a supply of information to tempt a person into making an offer.

In the case of Spencer vs Harding, it was established that an offer inviting tenders to be submitted for the purchase of stock did not amount to an offer capable of acceptance to sell that stock, but rather amounted to an invitation to treat.

Therefore, a notice of tender is not a valid offer but an invitation to offer.