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Business law 1a

Offer and acceptance

Offer and Acceptance

For every agreement there must be a definite offer and unqualified acceptance by the person to whom the offer is made. An offer is a proposal by one party to another to enter into a legally binding agreement A proposal is made when a person signifies to another his willingness to do or abstain from an act with a view of obtaining the assent of the other party The person making the offer is offereror,proposer or promisor and the person to whom it is made is called the offeree, proposee, or promisee.

More about offer

Ways of making an offer : Express and implied Express - Spoken or written Example Implied From conduct of parties Example. Types of offer - Specific offer and General Offer

Constituents- Essential elements of an Offer

1. The offerer must show an obvious intention of being bound by it.
2. The offerer must make the offer with a view of obtaining the assent of the offeree 3. The offer must be definite 4. It must be communicated to the offeree

Legal rules as to Offer

1. Offer must be such as in law is capable of being accepted and giving rise to legal relationship , Example 2.Terms of offer must be definite, unambiguous and certain and not loose and vague Example Taylor vs portington 3. An offer can be express or Implied Example 4. Offer can be specific or general - Example

5.An offer may be distinguished from: A declaration or intention and an announcement, an invitation to make an offer or do business - Example A pamphlet 6.Offer must be communicated Example - Lalman shukla vs Gauri Dutt 7. An offer can be subject to any terms and condition

8.Offer should not contain a term that non compliance of which may be assumed to amount to acceptance Example 10. Two identical offers do not make a contract Example

When does an offer come to an end Lapse and Revocation of Offer

1. 2. 3. 4. 5. 6. 7. 8. By Rejection By lapse of time Example Ramsgate Victoria hotel vs Monterfore By non fullfilment by the offeree of a condition precedent to acceptance By death or insanity of the offeror provided the offeree comes to know of it before acceptance Example Reynolds Vs Artherton If a counter offer is made to it If an offer is not accepted according to prescribed or usual mode If the law is changed By revocation Example Bidding

A contract emerges from the acceptance of an offer . It is the manifestation by the offeree of his willingness to be bound by the terms of the offer

It is to an offer what a lighted match is to a train of gunpowder, it produces something which cannot be recalled.
It can be expressed or implied. When an offer is made to a particular person , it can be accepted by him alone, if accepted by any other person it is not a valid acceptance

Legal rules to Acceptance

1. It must be a absolute and unqualified i.e., it must be conform with the offer Example2. It must be according to the mode prescribed or usual and reasonable mode Example 3. It must be given within reasonable period of time, if any time period is specified it must be done within that time Example Shree Jaya Mahal cooperative Vs Zenith chemical works

5. Acceptance must succeed an offer 6.Acceptance must be communicated by the acceptor Example Powell Vs Lee 7.It must be given by party or parties to whom the offer is made Example A,B,C 8. It must be given before the offer lapses or before the offer is withdrawn

9. It cannot be implied from silence

10 Rejected offers can be accepted only if renewed

Communication of offer , Acceptance and Revocation

An offer its acceptance and its revocation must be communicated. It can be deemed to be made by an act or omission of the party offering, accepting or revoking . Such act or omission must have the effect of communicating such offer, acceptance or revocation The communication is complete when it comes to the knowledge of the person to who it is made Offer: Communication of an offer is complete when it comes to the knowledge of the person to whom it is made i.e offeree.

Communication of an acceptance has two aspects against the proposer and against the acceptor. As against the proposer: when acceptance is put in transmission to be out of bounds of the acceptor. As against the acceptor: when it comes to the knowledge of the proposer, that is when letter of accpetance is received by the proposer.

1. 2. 3. It can be revoked at any time before acceptance is complete Revocation takes effect only when it is communicated to the offeree If the offeror has agreed to keep his offer open for a certain period, he can revoke it before the expiration of that period only when offer has not been accepted and if there is no consideration for keeping the offer open Communication of revocation : against the person who revokes : When he sends it and it is out of his bounds, Against the person to whom it is made : When it comes to his knowledge ; that is when it is received by him.