Question

Apply the legal principles to the facts given below and select the most appropriate answer.
Legal Principles:

1. Offer is a proposal made by one person to another to do any act or abstain from doing it. The person who makes the offer is known as the promisor or offeror and the person to whom an offer is made is known as the promisee or the offeree. 
2. A contract comes into being by the acceptance of an offer. When the person to whom the offer is made signifies his consent thereto, the proposal is said to be accepted and the parties are at consensus ad idem regarding the terms of the agreement.

Factual Situation: The plaintiffs offered to provide delivery of a machine tool for a price of ₹75,535. The delivery of the tool was set for 10 months, with the condition that orders only qualified as accepted once the terms in the quotation were met and prevailed over any of the buyer's terms. The buyer responded to the offer with their own terms and conditions, which did not include the 'price variation clause' listed in the seller's terms. This included a response section that required a signature and is returned in order to accept the order. The sellers returned this response slip with a cover letter signaling that delivery would be in accordance with their original quotation. The tool was ready for delivery but the buyers could not accept delivery, for which the sellers increased the price which was in line with their initial terms. This was denied by the buyer and an action was brought by the seller to claim the cost of delay and interest. Was a contract made with or without a price variation clause?

पर्याय

• The buyer's order was not an acceptance of the initial offer from the seller but a counter-offer which the sellers had accepted by returning the signature section of the buyer's letter and so the contract was completed without the price variation clause and therefore the seller could not increase the cost of the tool.

• The buyer's order was an acceptance of the initial offer from the seller and so the contract was completed with the price variation clause and therefore the seller can increase the cost of the tool.

• The contract was made with price variation clause due to the condition that orders only qualified as accepted once the terms in the quotation were met and prevailed over any of the buyer's terms.

• The contract between the buyer and seller is not valid as both the parties are not agreeing to the same thing in the same sense.

Answer 1

The buyer's order was not an acceptance of the initial offer from the seller but a counter-offer which the sellers had accepted by returning the signature section of the buyer's letter and so the contract was completed without the price variation clause and therefore the seller could not increase the cost of the tool.

Explanation:

Section 7 of the Contract Act requires that the acceptance must be absolute and unqualified. If there is a variation in the terms of the acceptance, it is not an acceptance, but a counter-offer, which the proposer may or may not accept. A counter-offer destroys the original offer. Thereafter the offeree cannot refer to the original offer and purport to accept it. In the case presented before us option (a) holds good as per the explanation, the further legal principle also talks about "consensus ad idem" meaning "meeting of minds" which is not fulfilled in the given case.