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Quotation of price is offer or invitation to offer?
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Quotation of price is offer or invitation to offer?
Quotation of Price: Offer or Invitation to Offer?
Offer
Invitation to Offer
Determining Whether a Quotation is an Offer or Invitation to Offer
Conclusion
When a seller provides a quotation to a potential buyer, it is important to understand whether the quotation is an offer or an invitation to offer. This distinction is important because it determines which party has the power to create a binding contract.
Offer
An offer is a definite proposal made by one party to another with the intention of creating a binding contract. In the context of a quotation of price, an offer would be made by the seller when the quotation contains all the essential terms of the contract, such as the price, quantity, and delivery terms. Once the buyer accepts the offer, a binding contract is created, and both parties are obligated to fulfill the terms of the contract.
Invitation to Offer
An invitation to offer, on the other hand, is a communication that indicates a willingness to negotiate the terms of a contract, but does not contain all the essential terms required to create a binding contract. In the context of a quotation of price, an invitation to offer would be made by the seller when the quotation is not a definite proposal, but rather an indication that the seller is willing to negotiate the terms of the sale.
Determining Whether a Quotation is an Offer or Invitation to Offer
Whether a quotation of price is an offer or an invitation to offer depends on the intention of the seller. To determine the intention of the seller, the court will look at various factors, including:
- Whether the quotation contains all the essential terms of the contract
- Whether the quotation indicates a willingness to negotiate the terms of the sale
- Whether the seller has a history of providing quotations that are offers or invitations to offer
If the court determines that the quotation is an offer, then the buyer can accept the offer, and a binding contract is created. If the court determines that the quotation is an invitation to offer, then the buyer must make an offer to the seller, and the seller can accept or reject the offer.
Conclusion
In conclusion, a quotation of price can be either an offer or an invitation to offer, depending on the intention of the seller. It is important for both parties to understand the nature of the quotation to avoid any misunderstandings and to ensure that a binding contract is created only when both parties have agreed to all the essential terms of the sale.
Community Answer
Quotation of price is offer or invitation to offer?
Invitation to offer
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Quotation of price is offer or invitation to offer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Quotation of price is offer or invitation to offer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Quotation of price is offer or invitation to offer?.
Quotation of price is offer or invitation to offer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Quotation of price is offer or invitation to offer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Quotation of price is offer or invitation to offer?.
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