What did the Court decide in McPherson v. Appana?

There was no concluded contract for the sale of Morvern Lodge. The seller’s words were only an invitation to offer, not a counteroffer or acceptance.

Is saying “I won’t accept less than 10,000” a counteroffer?

No. On the facts, it was treated as a mere statement of price—an invitation to offer, not a binding counteroffer.

Why did the plaintiff’s suit fail?

Because there was no final acceptance forming a contract on 14 August. Without consensus ad idem, specific performance could not be granted.

What is an invitation to offer?

It is a call for proposals or offers. It shows willingness to negotiate price or terms, but does not itself create a contract.

How to avoid such disputes?

Record clear acceptance in writing, fix price and terms, and avoid ambiguous statements that look like negotiations.

McPherson v. Appana

AIR 1951 SC 184 — Invitation to Offer • No Concluded Contract

Supreme Court of India 1951 AIR 1951 SC 184 Contract • Formation ~6 min India

Author: Gulzar Hashmi • Published: 26 Oct 2025

Quick Summary

The buyer tried to secure a bungalow called “Morvern Lodge.” Several cables mentioned prices. The seller’s line—“won’t accept less than 10,000”—was treated as a price indication, not a counteroffer or acceptance. No clear acceptance ever happened. The Supreme Court held there was no concluded contract; hence, no specific performance or breach.

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Issues

Was there a concluded contract for sale on 14 August?
Did saying “I will not accept less than 10,000” amount to a counteroffer?

Rules

A mere statement of minimum price is not an offer or a counteroffer.
A contract forms only when there is an unqualified acceptance of definite terms.

Negotiations or price indications are invitations to offer unless clearly stated otherwise.

Facts — Timeline

1944 → 1951

Owner: Appana owns “Morvern Lodge” at Mercara. White (alt. director) and Youngman (manager) handle communications.

1 Jun 1944: McPherson cables offer of ₹4,000 through White.

24 Jul 1944: Buyer raises price to ₹5,000 and asks for bank details if acceptable.

7–8 Aug: Buyer asks if accepted; White values at ₹10,000; message relayed that seller will not accept less than ₹10,000.

11–14 Aug: Buyer tells Youngman he will pay ₹10,000; writes to confirm and asks for handover.

26 Aug: White cables an offer of ₹11,000; seller accepts and sells.

Suit: McPherson sues for breach and specific performance.

Result: Supreme Court: No concluded contract; seller’s “10,000” line was an invitation to offer.

Timeline visual for McPherson v. Appana negotiation and sale

Arguments

Appellant (McPherson)

Claimed a concluded contract on 14 August at ₹10,000.
Treated the seller’s “not less than 10,000” as a counteroffer, accepted by him.
Sought specific performance for Morvern Lodge.

Respondent (Appana)

Statement was only a price indication—an invitation to offer.
No clear acceptance by the seller on 14 August.
Sale to another at ₹11,000 was lawful as no contract yet existed.

Judgment

For the Defendant

The Supreme Court held there was no concluded contract. The words “won’t accept less than 10,000” were not treated by either side as a counteroffer. They were only an invitation to offer. Hence, the claim for breach and specific performance failed.

Judgment concept image: invitation to offer, not counteroffer

Ratio (Legal Principle)

A price statement or willingness to negotiate is an invitation to offer, not a counteroffer. A contract arises only when a definite offer is met by an unqualified acceptance.

Why It Matters

Draws a clear line between negotiation talk and binding offers.
Prevents premature enforcement when terms were never fixed.
Guides drafting: record explicit acceptance and essential terms.

Key Takeaways

“Not less than ₹X” usually signals negotiation, not a binding offer.
Offer + unqualified acceptance = contract; anything less is talk.
Use clear words of acceptance and fix price, property, and timing.

Mnemonic + 3-Step Hook

Mnemonic: “Price Talk ≠ Promise.”

Indicate: Seller states a minimum price.
Initiate: Buyer may make a fresh, definite offer.
Integrate: Contract only after clear acceptance.

IRAC Outline

Issue

Was there a concluded contract on 14 August, and did “not less than 10,000” form a counteroffer?

Rule

A mere statement is an invitation to offer. Contract needs definite offer + unqualified acceptance.

Application

Both parties treated the statement as price talk. No acceptance by the seller on 14 August.

Conclusion

No concluded contract; suit for breach and specific performance fails.

Glossary

Invitation to Offer: A request for proposals—signals readiness to receive offers, not to be bound yet.
Counteroffer: A new offer that varies terms of the original; kills the original offer unless revived.
Concluded Contract: A final binding agreement with certain terms and clear acceptance.