2024 (4) TMI 897 - SC - Indian Laws

Promotional trailers are invitations to treat, not contractual offers, cannot create binding obligations regarding movie content

YASH RAJ FILMS PRIVATE LIMITED Versus AFREEN FATIMA ZAIDI & ANR.

The SC held that promotional trailers are unilateral invitations to treat, not contractual offers, and cannot create binding obligations regarding movie ... Legal implication of a promotional trailer - promotional trailer is an offer or a promise - unfair trade practice - absence of specific content from the trailer in the movie - whether there is any ‘deficiency’ in the provision of the entertainment service that the consumer has availed by paying the consideration through the purchase of a ticket? - HELD THAT:- A promotional trailer is unilateral. It is only meant to encourage a viewer to purchase the ticket to the movie, which is an independent transaction and contract from the promotional trailer. A promotional trailer by itself is not an offer and neither intends to nor can create a contractual relationship. It is well-established in contractual jurisprudence that an advertisement generally does not constitute an offer and is merely an ‘invitation to offer’ or ‘invitation to treat’. Since the promotional trailer is not an offer, there is no possibility of it becoming a promise. Therefore, there is no offer, much less a contract, between the appellant and the complainant to the effect that the song contained in the trailer would be played in the movie and if not played, it will amount to deficiency in the service. The transaction of service is only to enable the complainant to watch the movie upon the payment of consideration in the form of purchase of the movie ticket. This transaction is unconnected to the promotional trailer, which by itself does not create any kind of right of claim with respect to the content of the movie. In various decisions, LAKHANPAL NATIONAL LTD. VERSUS M.R.T.P. COMMISSION AND ANOTHER [1989 (5) TMI 321 - SUPREME COURT], KLM ROYAL DUTCH AIRLINES VERSUS DIRECTOR GENERAL OF INVESTIGATION AND REGISTRATION [2008 (10) TMI 353 - SUPREME COURT]. This Court has held that a false statement that misleads the buyer is essential for an ‘unfair trade practice’. ibid. A false representation is one that is false in substance and in fact, and the test by which the representation must be judged is to see whether the discrepancy between the represented fact and the actual fact would be considered material by a reasonable person. The ingredients of ‘unfair trade practice’ under Section 2(1)(r)(1) are not made out in this case. The promotional trailer does not fall under any of the instances of “unfair method or unfair and deceptive practice” contained in clause (1) of Section 2(1)(r) that pertains to unfair trade practice in the promotion of goods and services. Nor does it make any false statement or intend to mislead the viewers - There is another important distinction that we must bear in mind, i.e., the judicial precedents on this point do not relate to transactions of service relating to art. Services involving art necessarily involve the freedom and discretion of the service provider in their presentation. This is necessary and compelling by the very nature of such services. The variations are substantial, and rightly so. The findings of the impugned order that there is deficiency of service and unfair trade practice is set aside - appeal allowed. Issues Involved:1. Legal implications of a promotional trailer (promo) or teaser.2. Whether a promo creates contractual obligations.3. Whether excluding content shown in a promo from the final movie constitutes an unfair trade practice.4. Deficiency of service under the Consumer Protection Act, 1986.5. Unfair trade practice under the Consumer Protection Act, 1986.Summary:1. Legal Implications of a Promotional Trailer:The court examined whether a promotional trailer creates any contractual relationship or obligations. It was held that promotional trailers are unilateral and do not qualify as offers eliciting acceptance. Therefore, they do not transform into promises or agreements enforceable by law. It was also determined that the facts do not indicate the adoption of an unfair trade practice under the Consumer Protection Act, 1986.2. Contractual Obligations:The court emphasized that a promotional trailer is an advertisement meant to encourage viewers to purchase movie tickets, which is an independent transaction from the trailer. The promotional trailer is not an offer and does not create a contractual relationship. It is merely an 'invitation to offer' or 'invitation to treat.'3. Unfair Trade Practice:The court considered whether excluding a song shown in a promo from the final movie constitutes an unfair trade practice. The court held that the promo does not fall under any instances of 'unfair method or unfair and deceptive practice' as defined in Section 2(1)(r) of the Consumer Protection Act, 1986. No false statement or intent to mislead viewers was found. The burden of proving unfair trade practice was on the complainant, but no cogent evidence was presented.4. Deficiency of Service:The court analyzed whether there was a deficiency in the entertainment service provided. It was determined that the complainant's expectation that the song would be part of the movie was based on a misplaced assumption that the promo was an offer or promise. The essential element of an 'offer' or 'proposal' for contract formation was not satisfied. Therefore, no deficiency in service was found as the promo did not create any contractual obligation to include the song in the movie.5. Unfair Trade Practice under the Consumer Protection Act, 1986:The court held that the ingredients of 'unfair trade practice' under Section 2(1)(r)(1) were not made out in this case. The promo did not make any false statement or intend to mislead viewers. The court also noted that services involving art require a different standard of judgment due to the creative element involved.Conclusion:The court set aside the findings of the lower courts that there was a deficiency of service and unfair trade practice, and allowed the appeal. Pending applications, if any, were disposed of.