Business Environment and Law-Law Of Contract (Indian Contract Act 1872)
Offer And Acceptance-Law Of Contract
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As seen earlier the first step in making a contract starts with making an offer. We shall, therefore, discuss as to what constitutes a ‘lawful offer’.
Offer And Acceptance
As seen earlier the first step in making a contract starts with making an offer. We shall, therefore, discuss as to what constitutes a ‘lawful offer’.
‘Offer’ and ‘Proposal’ are synonymous terms. According to sec. 2(a), “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”. The person making the proposal is called the “Promisor” and the person to whom the offer is made is called the “Promisee” [Sec.2 (c)] Example: A offers to pay Rs.100 to B if B washes his cloths. A is the promisor and B is the promisee for the promise to pay Rs.100. A is the promisee and B is the promisor for washing his clothes. It is important to note that the offer must be made with the object of obtaining the assent of the other party.
As seen earlier the first step in making a contract starts with making an offer. We shall, therefore, discuss as to what constitutes a ‘lawful offer’.
Offer Or Proposal
‘Offer’ and ‘Proposal’ are synonymous terms. According to sec. 2(a), “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”. The person making the proposal is called the “Promisor” and the person to whom the offer is made is called the “Promisee” [Sec.2 (c)] Example: A offers to pay Rs.100 to B if B washes his cloths. A is the promisor and B is the promisee for the promise to pay Rs.100. A is the promisee and B is the promisor for washing his clothes. It is important to note that the offer must be made with the object of obtaining the assent of the other party.
Rules Regarding A Lawful Offer
A valid offer must be in conformity with the
following rules:
1. Terms of an offer should be definite or should be capable of being made definite.
1. Terms of an offer should be definite or should be capable of being made definite.
2. Offer should
be made with
an intention to
create legal
relationship: In the absence of such intention no obligation can arise. Absence of such intention may be express or implied.
relationship: In the absence of such intention no obligation can arise. Absence of such intention may be express or implied.
Example:
Where A proposes to sell his ‘Television’ to B for Rs.10000 but tells him that the breach of promise by
either party would not create legal rights, no binding contract would arise in
that case even if the agreement is in writing.
3. There
is no valid offer where:
i. It is mere statement of intention:
i. It is mere statement of intention:
Example:
A gives an advertisement in the television that he would dispose of his building by auction on 5th June at
8 a.m. in the lawns of his bungalow. B, who saw this advertisement, travels a
distance of 200 kilometers and reaches A’s bungalow at the given time and date
and finds that auction has been cancelled. A cannot be held liable because his
advertisement to hold auction did not constitute an offer; it was merely an
intention to hold an auction where bids would be received.
ii. It
is an invitation to offer:
Where A puts his building to public auction he is inviting offers from the bidders and he accepts the offer by falling the hammer or by any other customary method. The actual offer is the bid made at the auction and the auctioneer accepts it.
Where A puts his building to public auction he is inviting offers from the bidders and he accepts the offer by falling the hammer or by any other customary method. The actual offer is the bid made at the auction and the auctioneer accepts it.
4. Offer
must be communicated : The offer must be brought to the knowledge of the person to whom it is made. If an offer is not
communicated to the offeree, the latter cannot accept it.
5. Offer
should not contain a term the non-compliance of which would amount to
acceptance.
Example: A writes to B “I shall buy your furniture for Rs, 10,000, if you do not reply I shall assume that you have accepted my offer. This is not a valid offer.
Example: A writes to B “I shall buy your furniture for Rs, 10,000, if you do not reply I shall assume that you have accepted my offer. This is not a valid offer.
6. Offer
may be express or implied: An offer is express when it is stated in words, written or spoken.
7. An offer may be general or specific: When an offer is made to a specific person it is called a specific offer and it can be accepted only by that person but when an offer is addressed to an uncertain body of individuals i.e. the world at large, it is a general offer and can be accepted by any member of the general public by fulfilling the condition laid down in the offer.
Tags : Business Environment and Law-Law Of Contract (Indian Contract Act 1872)
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