Business & Labour Law

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Business Law by Khalid Mehmood Cheema

Course Assessment:
Quizzes: Minimum 5 quizzes 10 Marks
Mid Term 25 Marks
Final 40 Marks
Project 20 Marks
Presentation 05 Marks
 Syed Salman Ahmed
sirsalmanahmed@yahoo.com
0300-3610026
Yahoo Group Name : bllfall15
Group E-Mail : bllfall15@yahoogroups.com

MBA (Marketing & Finance) (Silver Medal) IBA Karachi

MEM (Quality Management) (Silver Medal) NED UET Karachi
MBA (MIS) (Silver Medal) IBA Karachi
MAS (HRM) UoK Karachi
MA (Economics) UoK Karachi
PGD (CIS) (Gold Medal) UoK Karachi
B E (Aerospace) NED UET Karachi
LLB UoK Karachi
Teaching Experience : 26 Years
 Contract Law
Offer or Proposal
At the inception of every agreement, there must
be a definite offer by one person to another and its
unqualified acceptance by the person to whom the
offer is made.
An offer is proposal by one party to another to
enter into a legally binding agreement with him.
When one 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, he is said to make a proposal.
 Contract Law
Example of Offer or Proposal

A sys to B, Will you purchase my car for

Rs.5,000?. In this case, A is making an offer to B as
he signifies to B his willingness to sell his car to B for
Rs.5,000 with a view to obtaining Bs assent to
purchase the car.
 Contract Law
Definitions

Offeror, Proposer or Promisor. The person

making offer or proposal.
Offeree or Proposee. The person to whom the
proposal or offer is made.
Acceptor or Promisee. When the offeree accepts
the offer, he is called the acceptor or promisee.
 Contract Law
Express offer

When offer is given to another person either in

writing or in oral.

For example : When A says to B, Will you

purchase my house at Lahore for Rs.2.5 Million?

For example : When A advertises in a

newspaper offering Rs.50 to anyone who returns
his lost dog.
 Contract Law
Implied offer
When offer is given to another person neither in
writing nor in oral form. It is implied from the
conduct of the parties or the circumstances of the
case.
For example : When a transport company
runs a bus on a particular route, there is an
implied offer by the transport company to carry
passengers for a certain fare. The acceptance of
the offer is complete as soon as a passenger
boards the bus.
 Contract Law
Implied offer
For example : When a weighing machine is
installed at a public place, there is an implied
offer by the owner of the machine. Any one
putting the required coin in the slot of the
weighing machine can accept the offer.

Specific offer
When offer is given to a specific person. It can be
accepted only by the person to whom it is made.
 Contract Law
General offer
When offer is given to entire world at a large.

For example : A company advertised in

several newspaper that a reward of Rs.10,000 would
be given to any person who swims the River Indus
near Kotri Bridge and come back swimming on the
same day.
 Contract Law
Cross offer

When two parties make identical offers to each

other, in ignorance of each others offer, the offers
are cross offers. In such a case, the court would not
be able to interpret one offer as the offer and the
other as the acceptance and as such there can be no
concluded contract.
 Contract Law
Legal Rules as to Offer

1. Offer must be such as in law is capable of being

accepted and giving rise to legal relationship. A
social invitation, even if it is accepted, does not
create legal relations because it is not so intended.
An offer must be such as would result in a valid
contract when it is accepted.
 Contract Law
Legal Rules as to Offer
2. Terms of offer must be definite, unambiguous
and certain. It shall not be loose and vague. If the
terms of an offer are vague or indefinite, its
acceptance cannot create any contractual
relationship.
For example : A husband on leaving his wife
promised to pay her Rs.1,500 a week so long as I
can manage it. It was held by the court that the
vague or discretionary terms of the arrangement
indicated an intention not to create legal
relations.
 Contract Law
Legal Rules as to Offer
3. An offer may be distinguished from:-
(i) A declaration of intention and an
announcement. A declaration by a person that
he intends to do something gives no right of
action to another. Such a declaration only means
that an offer will be made or invited in future and
not that an offer is made now.
For example : An advertisement for a
concert or an auction sale does not amount to
an offer to hold such concert or auction sale.
 Contract Law
Legal Rules as to Offer
3. An offer may be distinguished from:-
(ii) An invitation to make an offer or do
business. Display of goods by a shopkeeper in his
window, with prices marked on them, is not an
offer but merely an invitation to the public to
make an offer to buy the goods at the marked
prices.
For example : In a self service system, contract
is made, not when customer selects item, but
when cashier accepts the offer to buy and
receives the price.
 Contract Law
Legal Rules as to Offer
4. Offer must be communicated. An offer, to be
complete, must be communicated to the person to
whom it is made.
Unless an offer is communicated to the offeree by
the offeror, there can be no acceptance of it.
An acceptance of the offer, in ignorance of the
offer, is no acceptance and does not confer any right
on the acceptor.
For example : S offered a reward to anyone
who returned his lost dog. F brought the dog to S
without having heard of the offer. It was held by
the court that F was not entitled to the reward.
 Contract Law
Legal Rules as to Offer
5. Offer must be made with a view to obtaining the
assent. The offer to do or not to do something must
be made with a view to obtaining the assent of the
other party addressed and not merely with a view to
disclosing the intention of making an offer.

6. Offer should not contain a term the non-

compliance of which may be assumed to amount to
acceptance. The man cannot say that if acceptance is
not communicated by a certain time, the offer would
be considered as accepted.
 Contract Law
Legal Rules as to Offer
For example : Where A writes to B, I will sell
you my horse for Rs.5,000 and if you do not reply,
I shall assume you have accepted the offer. There
is no contract if B does not reply. B is under no
obligation to speak.

However, if B is in possession of As horse at the

time the offer is made and continues to use the horse
thereafter, Bs silence and his continued use of horse
amount to acceptance on his part of the terms of As
offer.
 Contract Law
Legal Rules as to Offer
7. A statement of price is not an offer. A mere
statement of price is not construed as an offer to sell.
For example : Three telegrams were
exchanged between A and B.
1. A to B: Will you sell your pen?
Telegraph lowest cash price.
2. B to A: Lowest price for pen is Rs.900.
3. A to B: We agree to buy pen for the
sum of Rs.900 asked by you.
It was held by the court that there was no
concluded contract between A and B.
 Contract Law
Acceptance
When a person made a proposal to another and
if proposal is assented to by the one whom proposal
is made, it is called acceptance.
Acceptance is the act of assenting by the offeree
to an offer.
In other words, it is the manifestation by the
offeree of his willingness to be bound by the terms
of the offer.
Acceptance may be express or implied.
 Contract Law
Express Acceptance
Acceptance is express when it is communicated
by words spoken or written or by doing some
required act.
For example : A widow promised to settle
some immovable property on her niece if the
niece stayed with her in her residence. The niece
gave her acceptance of the offer and stayed with
widow in her residence till her death. The niece
was entitled to the property as it was a express
acceptance.
 Contract Law
Implied Acceptance
Acceptance is implied when it is to be gathered
from the surrounding circumstances or the conduct
of the parties.
For example : At an auction sale, S is the
highest bidder. The auctioneer accepts the offer
by striking the hammer on table. This is an
implied acceptance.