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Business Environment and Law-Law Of Contract (Indian Contract Act 1872)

Lapse Of An Offer-Law Of Contract

   Posted On :  06.05.2018 11:54 pm

An offer once made cannot be continued for ever. Liability of the party making the proposal cannot be continued for all times to come. An offer becomes invalid i.e. comes to an end in the following circumstances.

Lapse Of An Ofer
 
An offer once made cannot be continued for ever. Liability of the party making the proposal cannot be continued for all times to come. An offer becomes invalid i.e. comes to an end in the following circumstances.
 
1. When the stipulated or reasonable time has expired: Example: A offers to sell his modern table to B for Rs. 5000 and tells him that B must communicate his acceptance within three days. On fourth day B brings Rs.5000 to buy the table. A refuses. A is not bound because the offer has lapsed on the third day.

2. Where the offer becomes illegal after it is made: Example: X of Mumbai offers to buy Peanuts from Y of Chennai. Next day Central Government prohibits inter-state transfer of Peanuts. The offer lapses by subsequent illegality.

3. Where the offerer or offeree dies or becomes insane before the offer is accepted: Example: A offers to sell his cow to B. Before B could accept the offer, A dies. B cannot accept the offer.

4. Where the offeree does not accept the offer in the mode the offerer had prescribed: Example: A writes to B that he wants to sell his furniture to B for Rs.10,000. He also writes to B that if B wants to buy the furniture, he (B) should send him (A) a telegram accepting the offer. B writes a letter to A accepting the offer. If A keeps silence over it, this is a valid acceptance. But if A informs B that he is not treating this letter as acceptance because the offer has not been accepted by a telegram, then this letter would not result in acceptance.

5. An offer lapses by counter offer by the offeree: Example: A tells B, “I want to buy your land for Rs. 10,000”. B says, “I shall sell my land for Rs.15,000.” A refuses to buy it for Rs. 15,000. Then B insists that A should buy it for Rs. 10,000. A refuses to do so. A is not bound by his offer because the statement of B that ‘I shall sell my land for Rs. 15,000’ is not acceptance of A’s offer but a counter offer. When a counter offer is made the original offer lapses and there is nothing for the offeree to accept. But an enquiry should not be mistaken for a counter offer.

6. An offer comes to an end when the offerer revokes his offer before it is accepted.


Tender (standing offer):A tender is an offer made in response to an invitation to offer. The party inviting tenders may require a definite quantity of goods or services to be supplied, in that event the person who responds to that invitation is said to have made a definite offer and would become bound by it if it is accepted.


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