A tendered to supply goods to B up to ₹50,000 for a period of one year. B ordered the goods up to ₹30,000 only. A wants to sue B for breach of contract as order did not come up to the amount expected. Discuss with reason

CS Executive · Economic, Business and Commercial Laws · PYQS · June 2023
A tendered to supply goods to B up to ₹50,000 for a period of one year. B ordered the goods up to ₹30,000 only. A wants to sue B for breach of contract as order did not come up to the amount expected. Discuss with reasons whether A can sue B under The Indian Contract Act, 1872.

Answer & Explanation:

Where a person offers to another to supply specific goods, up to a stated quantity or in any quantity which may be required, at a certain rate, during a fixed period, he makes a standing offer. Thus, a tender to supply goods as and when required, amounts to a standing offer. A standing offer or a tender is of the nature of a continuing offer. An acceptance of such an offer merely amounts to intimation that the offer will be considered to remain open during the period specified and that it will be accepted from time to time by placing order for specified quantities. Each successive order given, while the offer remains in force, is an acceptance of the standing offer as to the quantity ordered, and creates a separate contract. It does not bind either party unless and until such orders are given. Each order made by B is a separate contract and A was bound to fulfil orders made, but there was no obligation on B to make any order at all [(Percival Ltd. vs. L.C.C. (1918)]. Hence A cannot sue B for breach of contract.

Topics: Indian Contract Act, 1872

Open in Interactive Practice Hub · Full Practice Hub · Chapter Weightage · More in this subject

Related Questions in this Topic