Offer &

Acceptance
 Offer

Section 2(a) of Indian Contact Act defines offer,

• “ as when one person signifies
• his willingness to do act
• or to abstain from doing something
• with a view to obtaining the assent of other , such
act or abstinence is said as proposal”.
 Invitation to offer

Advertisement To the public to make an offer to buy the

goods at the marked the prices.

Example:
Display of goods by a shopkeeper in his window, with prices
marked on them, is not an offer but merely an invitation to
offer.
 Types Of Offer

• General & specific offer

• Express & implied offer
• Positive &negative offer
• Cross offer
• Counter Offer
• Standing/ Continuing Offer
 General & Specific Offer
• General offer made to • Specific offer made to
the whole world at some specific person
large • Specific offer can be
• General offer can be accepted only by
accepted by any person person to whom it was
having notice of the made
offer by doing what is
required under the
offer
 I want reward

Carbolic smoke ball

Company advertisement

Carlill vs Carbolic smoke ball company,(1983)IQB256

Shweta Verma, Research Scholar 7
 Decided Case :
• Carbolic smoke ball company advertised in the newspaper
that whosever would take smoke balls ,manufactured by it
,according to the printed instructions would not contract
influenza.
• The company offered a reward of $100 to anyone who
contracted influenza after taking its smoke balls according to
the printed instructions .It was added that $1000 was
deposited with alliance bank to show the sincerity of the
company.
• one Mrs.Carlill used the smoke balls according to the
directions given but contracted influenza.
• It was held that the offer was general one ,and Mrs.Carlill had
accepted it by acting according to the advertisement and
therefore the company could not get away from
responsibility by saying that it was a mere puff. She was
entitled to get reward.
 Harbhajan lal vs. Harcharan lal
• In this case a young boy had run away from his father’s
house.
• the father issued a pamphlet stating ,anybody who finds
trace the boy and bring him home will get Rs500.
• Harbajan Lal who knew of the reward, found out the boy
at a Railway station Dharamshala ,and took to the police
station.
• It was held that the handbill was a general offer and
therefore he was entitled to the reward.
I HAVE
FOUND THE
BOY

Shweta Verma, Research Scholar 9

 Express and Implied offer

• When an offer is expressed by words spoken

or written it is termed as an express offer.
• Implied offer means an offer made by
conduct.
When one person allows the other to perform
certain acts.
 Example : Implied Offer
• A bus company runs buses between India gate to kahsmiri
gate. there is implied offer from the bus company to take any
person on the route who is prepared to pay the prescribed
fare. the offer will be said to be accepted by a passenger as
soon as he takes seat in the bus.

• A bid at an auction is an implied offer to buy. Similarly

consuming eatables at a self service restaurant, both create
implied promise to pay for the benefits enjoyed.
 Positive & Negative Offer
• A person may express his willingness to do
something (Positve Offer)
• or to abstain from doing something (Negative
Offer )
• e.g it may be an offer to construct a wall to
provide privacy
• or not to construct a wall so that free passage
of light and air may not be obstructed.
 Cross Offer

• Two offer similar in all respects, made by one

party to the other ,in ignorance of each
other’s offer, are termed as cross offers. they
shall not constitute acceptance of one’s offer
by the other.
 Example : Cross Offer
TINN v/s HOFFMANN
A offers by a letter to sell his car to B for Rs 15000. B
at the same time offers by a letter to buy A’s car for
Rs 15000. The two letters cross each other in the
post.
Is there a contract between A and B?

No cross offer do not form any contract.

 Counter Offer
• When a person makes a counteroffer, he or
she is rejecting the previous offer and
rendering it void. Because the original offer is
now void, the person who made that offer is
no longer legally responsible for honoring it.
 Example -
Let's say you are selling a vehicle. A buyer
arrives and offers you $10,000 for the car. In
an attempt to get a higher price, you
counteroffer, asking for $11,000. If the buyer
declines, you cannot force them to buy the car
at $10,000, even though they have already
offered at that price.
 Legal rules : Valid offer
1. An offer may be express or implied

2. It should give rise to legal consequences and be capable of

creating legal relations

3. The term of the offer must be certain, definite and not loose
or vague.

4. An offer may be distinguished from:

- a declaration of intention and an announcement
- an invitation to make an offer or do business.
5. Offer must be communicated.
6. Offer must be made with a view to obtaining the
assent.
7. An offer should not contain a term the non
compliance of which would amount to acceptance.
8. Two identical cross offers do not make a contract.
9. A statement of price is not an offer.
10. The objective of offer should be legal one.
11. It must be made to another person.
 Contd....
Example –
A sees an article marked ‘price rupees twenty’
in B’s shop. He offers B Rs20 for the article. B
refuses to sell saying the article is not for sale.

Held A cannot force B to sell him the article at

Rs20. Marking of price of an article amounts
to an invitation to offer and not an offer .
 Acceptance

Section 2(b) states that

“ When the person to whom the proposal is made signifies his

assent thereto the proposal is said to be accepted.”
Types:
(i) Express Acceptance
(ii) Implied Acceptance
e.g. Highest bid, niece staying at aunt’s house
Who can accept ??
Example: Boulton, Brockleburst, Jones case
 Legal Rules : Acceptance

(i) It must be absolute and unqualified.

(ii) It must be communicated by the acceptor to the offeror.
(iii) It must be given only by the person to whom the offer is made.
(iv) It must be according to the mode prescribed or usual and reasonable
mode.
(v) It must be given within a reasonable time.
(vi) Acceptance must succeed the offer.
(vii) It must show an intention on the part of the acceptor to fulfill terms of
the promise.
(vii) It must be given before the offer lapses and /or revoked.
(viii) It cannot be implied from the silence.
 Case:

Mr. C and Mr. D signed an agreement for the purchase of a

house by Mr. D “subject to a proper contract” to be prepared
by C’s lawyer.
A document was prepared by the C’s lawyer and approved by
D’s lawyer but D refused to sign the document.
Is the contract made?
• No as the agreement was conditional.
 Communication of offer and acceptance

Communication of offer(sec 4):

The communication of the offer complete when it comes to
the knowledge of the person to whom it is made.

Question:
A sends a proposal in the mail to B and the mail is lost.
Is the offer communicated and complete?
Communication of acceptance (sec 4):
Communication of acceptance is complete :
- As against the proposer when it is put in course of transmission
to him so as to be out of the power of the acceptor to
withdraw same.
- As against the acceptor when it comes to the knowledge of the
proposer.
Communication of revocation (sec 4):
Communication of revocation is complete :
- As against the person who makes it, when it is put in the course
of transmission to the person to whom it is made, so as to be
out of the power of the person who makes it.
- As against the person to whom it is made, when it comes to his
knowledge.
 Examples

(i) A sends a letter to B to sell his house for

Rs.50,000. The letter is posted on July 10 and
reaches B on July 12.
(ii) B posts acceptance on July 13 and letter reaches A
on July 15…
(iii) Letter to sell house is sent on May 15. It reaches B
on May 19. On May 18, A revokes his letter which
reaches B on May 20
 When does an offer comes to an end?
Modes of revocation:
(i) By communication of notice of revocation by the offeror at
any time before its acceptance is complete against him.
(ii) By lapse of time if it is not accepted within the prescribed
time.
(iii) By non-fulfillment by the offeree of a condition precedent to
acceptance.
(iv) An offer lapses by the Death or Insanity of the offeror or the
offeree before acceptance
(v) If a Counter Offer is made.
(vi)An offer lapses if Acceptance given Not in the Prescribed.
Mode
(vii) An offer lapses by Subsequent Illegality or Destruction of
subject matter.
(viii) An offer lapses by Rejection.
 Example
• A proposes by a letter sent by post to sell his laptop
to B. the letter is posted on the 1st of the month. B
accept the proposal by a letter sent by post on the
4th. The letter reaches A on 6th
• A may revoke his offer at any time before B post his
letter of acceptance i.e 4th but not afterwards.
• B may revoke his acceptance at any time before the
letter of acceptance reaches A i.e 6th but not
afterwards
 Decided Case 1 :
In Cooke .v. Oxley,
A offered to sell 266 hog shed at a certain price and promised
to keep it open for acceptance by B till 4 PM of that day
.Before that time A sold them to C ,B accepted before 4PM
but after the revocation by A .
It was held that the offer was already revoked.

A
B
 Decided Case 2 :
Dickinson V. Dodds
Dodds agreed to sell property to Dickinson by a written
document which stated “this offer to be left over until Friday
9AM. On Thursday Dodds made a contract to sell the property
to C .Dickinson heard of this from X and on Friday at 7AM he
delivered to Dodds an acceptance of his offer .
Held Dickinson could not accept Dodds’s offer after he knew it
had been revoked by the sale of the property to C.
 Case

A seller on Thursday offered wool to a buyer and

gave him three days in which he had to accept .The
buyer accepted the offer on Monday but the seller
after waiting for three days had sold the wool.
Is the offer valid?
 Offer lapses after Stipulated Time
or
Reasonable Time

• It was held that the offer had lapsed by Monday morning by

its express terms ,and the seller was not bound.