OFFER

DEFINATION

To form a contract, there must be an offer by one party ,an acceptance by

another party .

The person who proposes the terms of an agreement makes an offer, and is
called an offeror and the person to whom the offer is made is known as
the offeree
 How an offer is made

An offer may be made by express words, spoken or written , this is known as

express offer.

For e.g- when A tells B to buy his house in Miramar for Rs 15,00,000 or when
A advertises on the newspaper , offering reward to the person finding his
dog.
 ESSENTIALS OR LEGAL RULES AS TO PROPOSAL
1. There must be at least two parties:
No man can in his own right, be under an obligation to himself. There must
be at least two parties; to present an offer before another.

2. The proposal may be to do or abstain from doing something:

The offeror must make the offer with an intention to obtain the assent of
the offeree to do or abstain from doing something.
 3. The offer must be capable of being accepted and giving rise to legal
relationship:
An offer must be such as would result in a valid contract when it is accepted
by the offeree. An offer of social nature does not constitute legal
relationship.
Example : offering an eagle that is flying on the sky.
4. The terms of offer must be certain and not vague:
The terms of the offer should not be indefinite, loose or vague, or if an
essential provision is lacking it cannot be accepted. This is because that its
acceptance cannot create any legal relationship.
For example: A owns three cars of different colours and he says to B that he is
prepared to sell one car to B. The offer is not definite because A has not
specified Which car (colour/make) he is intending to sell to B.
5. Offer must be communicated to the offeree:

Until an offer is made known to the offeree, he(offeree) does not know what he
has to accept. It must be communicated to the person to whom it is made. An
ignorance of the offer is no acceptance and it will not create any legal right on the
acceptor.
Eg: A makes an offer to B to sell his car to B for Rs 2 lacs. B accepts the offer.
Here A is communicating or making an offer to B to buy his car. It is a valid
offer.

A does not communicate to B but thinks that he(A) will sell his car to B. Here
the buyer(B) does not have any knowledge about the offer and hence it is not a
valid offer .
6. The offer must not bind the offeree to send intimation of acceptance:

The offeror can set a time limit for getting acceptance of the offeree, but he
cannot say that if no acceptance is received from the offeree within a prescribed
time, the offer shall be deemed as accepted.
Eg: A makes an offer to B to sell his car to B for Rs 2 lacs. B says he needs some
time to think on it. A says I will give you 2 days to reply and if you do not reply I
shall consider the offer accepted. It is not a valid offer.
7. Offer must be distinguished from Invitation to offer:

Advertisements are not held as offers. They are generally assumed to constitute an
invitation to make an offer.
Invitation to offer is where you only invite an offer from the buyer but do not make an
offer to sell the product. You may accept or reject the offer.
Eg: Advertisements such as upto 50% off or stock clearance sale are only invitation
to offer and not an offer.
8. Offer must not be a mere statement or intention or a wish:

A statement made by a person about his wish or intention should not be construed
as an offer.
Eg: A says to B that I wish to give all my property to the person who will marry
my daughter. B then asks his son to marry As daughter. Bs son marries As
daughter. After marriage when As son-in-law tells A to handover his(As) property
to him(son-in-law), A rejects because A had not made any offer. He had only
expressed his wish or intention. Offer is clearly different from a wish or an
intention. It is not a valid offer.
 Kinds of offer
General Offer
A general offer can be accepted by any person by fulfilling the terms of the
offer. In case of general offer, the contract is made with person who having
the knowledge of the offer comes forward and acts according to the
conditions of the offer.
Cross Offer
Two offers which are similar in all respects made by two parties to each
other in ignorance of each other's offers are known as Cross Offers.
 Counteroffer
A counteroffer is a proposal that is made as a result of an undesirable offer.
A counteroffer revises the initial offer and makes it more desirable for the
person making the new offer. This type of offer permits a person to decline
a previous offer and allows offer negotiations to continue.
Continuing offer:
An offer which is to be kept open for a certain time, or a proposal made to
be accepted within a specified time.
Invitation to offer:
Invitation to offer is inviting someone to make a proposal. In an offer, there
is an intention to enter into a contract, of the party, making it and thus it is
certain. On the other hand, an invitation to offer is an act which leads to
the offer, which is made with an aim of inducing or negotiating the terms.
 Communication of Proposal
According to Sec.4 of the contract act, the communication of Proposal is
completed when it comes to the knowledge of the person to whom it is
made.
For Example: A proposes, by letter, to sell his house to B at a price of Rs 50
lacs. The letter is posted by A on June 1st and it reaches B on June 3rd. The
communication of the offer completes when B receives the Letter and read
it.
 Revocation of Offer

A proposal may be revoked at any time before the communication of its

acceptance completes, as against the offeror, but not afterwards. This
means that the proposal may be revoked by the proposer at anytime by an
mode of communication before the acceptor has accepted.
 Methods of revocation
1. By notice of revocation
Offer may be revoked by the offeror by communication of a notice of
revocation, at any time before its acceptance is completed as against him.
2. By lapse of specified time
An offer maybe lapsed after the expiry of the specified time, if a time is fixed
by the offeror for the offeree to accept the proposal
3. By the lapse of a reasonable time
If no time is prescribed for acceptance, the offer lapses by the expiry of
reasonable time
4.Buy death or insanity of the offeror
If the offeror dies before the acceptance received, there is no offer to accept, and if the
acceptance is made it becomes infructuous. If the acceptance is made in ignorance of
death or insanity of the offeror there would be a valid contract.

5. By the death or insanity of the offeree

An offer lapses by the death or insanity of the offeree before acceptance given. The
offeree's death without accepting the offer puts an end to the offer, his legal
representative cannot accept for him.

6. In case of non-fulfillment of conditions of offer

In case of non-fulfillment by the offeree of a condition precedent to the acceptance the
offer lapses.
Example: A seller agrees to sell certain goods to B the buyer, provided he pays the price
in advance. If B fails to pay the price by the date, the offer stands revoked.
7.In case of Counter offer
An offer is revoked if a counter-offer is made
Example: if A makes offer to B to sell his house for Rs 1.50 lacs and B instead of
accepting the offer makes an offer to buy it for Rupees 1.25 lakh, the original offer by A
is lapsed. Such an offer is known as counter offer
8. Implied revocation of offer
An offer can be revoked by the conduct of the offeror before the acceptance is
completed.
Example: A agrees to sell his bicycle to B at a price of rupees 3000. Before B accepts the
offer A has sold out the cycle to C there is an implied revocation of offer.
9. By destruction of subject matter
In case the subject matter of an offer is destroyed before the acceptance of offer, the
offer lapses