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Offer And Acceptance

Ruby Sharma

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Proposal or offer: -

The term proposal is similar to the term offer.

The term proposal is the base of an agreement.

Section 2(a) defines “ When a person signifies to another his willingness to do or to abstain from doing anything with a view to obtaining the assent of that other to such act or abstinence”.

Ruby Sharma

Section2(a) reveals 3 essential elements of offer

(a)Expression of willingness to do or not to do something.

(b) Made to another person that is a person cannot make offer to himself.

c) With the object of gaining the consent of the other person to such act.

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Kinds of Offer

(1) How an offer is made?

(2) To whom an offer is made?

1) How an offer is made: An offer may be express or implied from the conduct of the parties:

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Kinds of Offer Express Offer: It is one which is made by words

spoken or written such as letter telegram, telex, fax messages, email or thru internet. Thus where A offers to sell his pen to B for Rs. 20/-. It is an express offer.

Implied offer: it is one which may be gathered from the conduct of the party or the circumstances of the case. Thus where a person go to a doctor for treatment, his conduct implies an offer that if the treatment is given, the offeror will pay the usual charges.

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(2) To whom an offer is made: An offer may be maid to a) A particular person

b) A particular group or body of persons

c) The public at large

a)Specific offer :An offer made to a definite person and it is accepted only by the person to whom it is made.

b)General offer :When an offer is addressed to whole world. A general offer is accepted by any one.

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The leading case on this point is CARLILL V CARBOLIC SMOKE BALL CO.(1893)

In this case carbolic smoke ball Co. offered by advertisement a reward of 100 pounds to any person who should contract influenza after having used the smoke ball three times daily for two weeks according to the printed direction. It also added that 100 pounds were deposited in the bank showing the sincerity in the promise. The plaintiff Mrs. Carlill used the smoke ball according of the directions of the company but contracted influenza . It was held that she could recover the reward because the advertisement was not mere an invitation to offer but an offer at large .Performance of condition is sufficient acceptance without notification.

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An Offer must be distinguished from A mere statement of intention e.g. an announcement of

forthcoming auction sale. Thus a person who attends the advertised place of auction could not sue for breach of the contract if the sale was cancelled

An invitation to offer e.g. an advertisement in newspaper ,the display of goods in shop window with prices marked upon them

A mere Communication of information in the course of negotiations e.g. statement to the lower price made in answer to an enquiry as to the lowest price for sale. A catalogue of goods for sale e.g. a book sellers catalogue of books with price stated

A casual inquiry e.g. Do you intend to sell your computer ? Its not an offer.

A prospectus inviting the public to subscribe to the shares and debentures of a company

Advertisement for the tenders

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Essentials of a valid offer Offer must be capable of creating legal

relationship: The offeror must intended the creation of legal relations .He must intend that if his offer is accepted , a legally binding agreement shall result.

Offer must be certain definite and not vague: No contract can come into existence if the terms of the offer are vague or loose and indefinite Both the parties should be clear about the legal consequences arising out of contract (Taylor V Portington1855).

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Taylor V Portington(1855)

A agreed to take B’s house on rent for three years at the rent of 85 pounds per annum provided the house was put into thorough repair and the drawing room was decorated “according to present style". It is vague term ,because the term present style may mean one thing to A and another to B. Hence the agreement was void on the ground that the terms of the offer was vague and uncertain

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Offer must be communicated There can be no offer by person to himself .It must always be communicated to the offeree. If there is no communication of an offer ,there is no acceptance resulting in the contract .Thus if A writes a letter to B offering to sell his watch for Rs.200 But never posts the letter and keeps it in his pocket ,it is not an offer and B can never accept it .

Lalman Shukla V Gauri Dutt: D sent his servant P to trace his missing nephew .D in the meantime announced a reward for providing a information about the missing boy .P ,in ignorance of the announcement traced the boy and informed D.P later on came to know of the reward and he claimed it. His claim was dismissed on the ground that he was ignorant of the offer .It was further held that it was the duty of the servant to search for the boy .

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Offer must be made with a view to obtaining the assent of the other party An offer must be distinguished from mere expression of intention .

Harris V Nickerson(1873)

N advertised in the newspaper to effect sale of goods on particular day at particular place .he travelled a long distance to bid for the things .On arrival he found the sale was cancelled. He sued N for breach of contract .It was held that adv. was merely expression of intention and not an offer which could be accepted by travelling to the place of intended sale.

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An offer may be conditional An offer can be made subject to condition. In

that case it can be accepted subject to the condition .A conditional offer lapse when condition is not accept.

Example T,who could not read ,took an excursion ticket on the railway .On the front of the ticket was mentioned “for condition see back” One of the condition was that the railway company would not be liable for personal injuries to the passengers .T was injured by the railway accident .Held T was bound by the conditions and could not recover any damages.

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Offer should not contain a term the non compliance of which would amount to acceptance

Example: A writes to B,”I offer to sell my house for Rs. 40000.If I do not receive a reply by Monday next, I shall assume that you have accepted the offer, "There will be no contract if B does not reply .

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Lapse of an offerAn offer lapse –

(a) If either offeror or offeree dies before acceptance .

(b) If it is not accepted within

I)the specified time or

II )A reasonable time, If not time is specified

(c) If the offeree does not make valid acceptance: For example by sending a letter by mail when a reply by hand was requested.

An offer can also lapse by revocation. A person who makes an offer can withdraw it any time before acceptance .An offer can be made for fixed period .the offer will automatically expire if it has not been accepted till then.

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An invitation to offer is not an offer An offer must be distinguished from an

invitation to offer .In this case of an invitation to offer the aim is merely to circulate information of readiness to negotiate business with anybody who on such information comes to the person sending it. Such invitations are not offers in the eyes of law and do not become promises on acceptance.

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Standing or Open Offer: An offer for the continuous supply of a certain article at a certain rate over a definite period is called a standing offer .Such offers though accepted do not give rise to contract unless an actual order is placed .

Counter Offer. A counter offer is rejection of original offer and making a new offer .this new offer is counter offer.

Cross Offer. When two parties makes identical offer to each other ,in ignorance of each other’s offer ,such offers are known as cross offers.

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