Chapter 2: Offer andAcceptance

 What is `Offer/Proposal`
A Proposal is defined as "when one person signifies to another his willingness to do or to abstain from doing anything, with a view to obtain the assent of that other to such act or abstinence, he is said to make a proposal." [Section 2(a)].

How an Offer is made?

An offer can be Expressed offer Implied offer Specific offer General offer

Basis of a Contract
Agreement on the terms: meeting of the minds (consensus ad idem) Another ground: reasonable reliance
Cf. Standard form contracts with banks

How do courts determine existence of a contract?

Offer and acceptance

What constitutes an offer?

The offer must show an obvious intention on the part of the offerer to be bound by it. The offerer must make the offer with a view to obtaining the assent of the offeree to such act or abstinence. The offer must be definite. It must be communicated to the offeree.

Legal Rules As To Offer

Offer must be such as in law is capable of being accepted and giving rise to legal relationship. Terms of offer must be definite, unambiguous and certain and not loose and vague.
Even if the vague offer is accepted it does not create any contractual relationship If any machinery for ascertaining a vague term is included in the agreement, the agreement is not void on the ground of its being vague.

An offer may be distinguished from:

A declaration of intention and an announcement. An invitation to make an offer or do business.
Ex. Display of good in a showroom. Contract is made when the person pay to cashier the amount for the goods not when he selects the goods. Newspaper advt to pay amt who find lost dog for the 5 first time.

 Offer must be communicated.

Acceptance of offer in ignorance of offer is no acceptance at all.ex//1)unknowingly returning the lost item.2)lalman vs gauridatt case of lost nephew.

Offer must be made with a view to obtain assent. Offer should not contain a term the noncompliance of which may be assumed to amount to acceptance. A statement of price is not an offer.

 Tender
It is a response to an offer It is also an offer and may be either
A definite offer to supply specified goods and services A standing order- a continuing offer. Whenever the requirement arises, the goods will be supplied for which distinct contract will be made each time.

Specific terms in contract

Must be made clear at the time of entering into contract. Else the offeree will not be bound to it. Ex//- notice in hotel room Conditions written in receipt or voucher which are not supposed to contain the conditions of contract, do not bind the receiver. Acceptance of documents containing the contract implies acceptance of all the terms provided it does not include Misrepresntaion of fraud Insufficient terms

Cross offer
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 Acceptance
Expressed Implied
When it is gathered from the surrounding circumstances or the conduct of the parties.

Who can accept

Acceptance of particular offer Acceptance of general offer

 Legal rules as to acceptance

Acceptance must be absolute and unqualified. Acceptance must be communicated to the offeror. Acceptance must be according to the mode prescribed or usual and reasonable mode It must be given within a reasonable time It cant precede an offer It must show an intention on the part of the acceptor to fulfil terms of the promise. It must be given by the party to whom the offer is made. It must be given before the offer lapses or before the offer is withdrawn. It cannot be implied from silence.

 Acceptance subject to contract Acceptance to agree in future

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Communication of offer, acceptance and revocation

Mode of communication
Expressed Implied

When is communication complete

1. Communication of offer
1. When it comes to the knowledge of offeree.

2. Communication of acceptance
1. As against the offeree- when it comes to the knowledge of the offeror. 2. As against the offeror- when it is put into a course of transmission to him and out of the power of offeree.

3. Communication of revocation(of offer or acceptance)

1. For the person revoking,on the day when it put the revocation into a course of transmission 2. For the other party, when he receives it. 11

 Time for revocation of offer and acceptance

Time for revocation of proposal:
Before offeree put his acceptance into transit.

Time for revocation of acceptance

Before it comes to the knowledge of offerer.

Loss of letter of acceptance in postal transit Contracts over telephone or telex or oral communication

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When an offer come to an end?

Revocation or lapse of offer::An offer is revoked by::
Communication of notice of revocation by the offeror at any time before its accepatance is complete as against him. If it is not accepted within the prescribed time Non fulfilment by the offeree of a condition precedent to aceeptance By death or insanity of the offeror, only if the offeree is aware of it If a counter offer is made to it If offer is not accepted a/c to prescribed mode If the law is changed

Rejection of Offer
Expressed rejection Implied rejection
In case of counter offer or conditional acceptance.

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