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Offer

The document discusses the key elements of a valid offer in contract law. It notes that an offer requires plurality of persons (an offeror and offeree), communication of the offer, an intention to obtain acceptance through the proposal, certainty of terms, an intention to create legal relations, and cannot include terms where non-compliance amounts to acceptance. It also discusses types of offers like general offers, invitations to treat, cross offers, counter offers, and standing/continuing offers. Finally, it discusses revocation of an offer and can occur through notice, lapse of time, non-fulfillment of conditions, death/insanity of the offeror.

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24 views

Offer

The document discusses the key elements of a valid offer in contract law. It notes that an offer requires plurality of persons (an offeror and offeree), communication of the offer, an intention to obtain acceptance through the proposal, certainty of terms, an intention to create legal relations, and cannot include terms where non-compliance amounts to acceptance. It also discusses types of offers like general offers, invitations to treat, cross offers, counter offers, and standing/continuing offers. Finally, it discusses revocation of an offer and can occur through notice, lapse of time, non-fulfillment of conditions, death/insanity of the offeror.

Uploaded by

Raamit arora
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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LAW OF

CONTRACT - I
Pooja Gautam
OFFER
OFFER / PROPOSAL

Section – 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.
Essentials and Characteristics of a Valid Offer

1. Plurality of persons

OFFEROR OFFEREE
2. OFFER MUST BE COMMUNICATED

How is the communication of an offer made?


Sec. - 3 - by any act or omission of the party proposing by which he intends to
communicate such proposal or which has the effect of communicating it
Sec. - 9 Express Offer and Implied Offer (Eg. Letters, spoken words, Auction,
self- service)
Sec. - 4 Communication of offer completes when it comes to the knowledge of
the person to whom it is made.
It is purely a Question Of Fact.

Lalman shukla vs Gauri dutt, (1913) 11 All LJ 489


3. Object of making the proposal:
The offer must be made with a view to obtain
acceptance.

4. Terms of the proposal should be certain


and clear:
The terms of offer should be definite,
unambiguous and certain or capable of being
made certain (S. 29). The terms of the offer
should not be loose, vague or ambiguous.
5. INTENTION TO CREATE LEAGAL RELATIONSHIP
• Aim is to make distinction between ‘social and domestic agreements’ and ‘ to cover
agreements made in a commercial context’
Balfour vs Balfour, (1919) 2 KB 571
• The general presumption may be rebutted by adducing evidence to the contrary, i.e.,
by showing that the intention of the parties was to create legal obligations.
Parker v Clark, (1960) 1 WLR286
• The test of contractual intention is objective, not subjective. The deciding factor is
not what the parties had in mind, but what a reasonable man would think, in that
circumstances, their intention to be.
• Principal is useful only in systems which lack the test of consideration to enable them
to determine the boundaries of contract.
6. Offer should not include the term non-compliance of
which would amount to acceptance:

Offer cannot impose burden of refusal


• Felthouse vs Bindley (1863) 7 LT 835
• Cotton Corpn. of India Ltd. Vs Bombay Dyeing & Mfg Co. Ltd. (2006) 5
Bom CR105 (Bom)

7. Offer may be conditional and unconditional


Types of offers

Negati Standi
Expres Genera Offer ng
ve Expres
s Offer l Offer and offer /
offer sion of Cross Counte
and and Invitati Contin
& Interes Offers r Offer
Implie Specifi on to uing
Positiv t (Eol)
d Offer c Offer Treat offer
e offer
General offer
• Carlill vs Carbolic Smoke Ball Co., (1893) 1 QB 256

• Har bhajan lal vs Har charan lal, AIR 1925 All 539
INVITATION TO OFFER
• Offer to receive offers.
• The distinction is - accepting an offer creates a binding contract while
"accepting" an invitation to treat is actually making an offer.
• Harvey vs Facey, (1893) AC 552.
• Pharmaceutical Society of Great Britain V. Boots Cash Chemists
(Southern) Ltd. [1953] 2 WLR 427
• Cross offer:

• Counter offer

• Standing offer /Continuing offer:


Revocation of proposal
• Sec- 5
Offer can be withdrawn/revoked anytime before it is accepted by the offeree and not
after his acceptance.

Sec – 4 (postal rule)


• Revocation must actually be communicated.
• the Communication of revocation of offer completes :
• against offeror --- when revocation letter is posted / dispatched.
• against offeree – when letter is received by offeree.
Modes of revocation
• By notice
• By lapse of time
• Non fulfilment of conditions
• By death or insanity of offeror
Class Room Exercise (CRE - 1)
1. A wrote a letter, offering to buy B’s property for Rs. 6 lacs. To which B replied
‘won’t accept less then 10 lacs.’ A informed his acceptance to B but B sold it to
another on higher price. Can A sue B ?

2. A sees a rare book displayed in a shop. It is labelled-First edition Rs 15/-. A


entersthe shop and puts Rs15 on the counter and asks for the book. The book
seller does not agree tosell saying that the real price of the book is Rs 50/- and it
had been marked as Rs 15/- bymistake. If the book seller bound to sell the book
for Rs 15/-?
3. A fire broke out in the defendant’s farm. He called Upton fire brigade, which
he indented to be free. Brigade put out the fire. It then turned out that defendant’s
farm was not within free zone of Upton, therefore, claimed compensation for
services.

4. Write the type of offer of following offers:


a. A catalogue of goods for sales
b. The mere quotation of term by trader
c. A request for a loan
d. Advertisement for sale or auction of goods
e. Bids in an auction sale
f. Advertisement for tenders
e. Free distribution of articles
5. Principle: A proposal (offer) should be made with an intention that after its
valid acceptance, a legally binding promise or agreement will be created. The
intention of the parties is to be ascertained from the terms of the agreement and the
surrounding circumstances under which such an agreement is entered.
• Facts: One morning while having breakfast, the teacher, says to `x’ (teacher’s
student) in a casual manner, ‘I’ll give you a car, if you get through the AIEEE
exam.
Which of the following answers are CORRECT?
A - The statement of teacher did not result in any enforceable
agreement.
B - The statement of teacher made a statement that resulted in
an enforceable agreement.
C - The statement of teacher made a statement that resulted in
a valid proposal.
D - The statement of teacher made a statement that resulted in
an enforceable promise.

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