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Offer and Acceptance

The document outlines the principles of offer and acceptance in contract law, detailing the rules for a valid offer, including express and implied offers, the necessity for legal consequences, and the importance of clear terms. It also discusses the requirements for valid acceptance, emphasizing that it must be communicated and made by the intended offeree. Additionally, the document covers the communication of offers, acceptances, and revocations, highlighting the timing and methods of communication.

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11 views25 pages

Offer and Acceptance

The document outlines the principles of offer and acceptance in contract law, detailing the rules for a valid offer, including express and implied offers, the necessity for legal consequences, and the importance of clear terms. It also discusses the requirements for valid acceptance, emphasizing that it must be communicated and made by the intended offeree. Additionally, the document covers the communication of offers, acceptances, and revocations, highlighting the timing and methods of communication.

Uploaded by

nidhi.jain
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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OFFER AND

ACCEPTANCE
OFFER
 When one party signifies his willingness
to do something or not to do something
with a view to obtain the assent of the
other.
 Expression of willingness
Rules of a valid offer
1. An offer may be express or implied-
An offer may be made either by words
or by conduct. An offer which is
expressed by words, spoken or written,
is called an ‘express offer’ and the one
which is inferred from the conduct of a
person or the circumstances of the case
is called an ‘implied offer’.
2. An offer must contemplate to give rise to
legal consequences and be capable of
creating legal relationship-
If the offer does not intend to give rise to
legal consequences, it is not a valid offer in
the eyes of law.
Even in the case of business agreement if
the parties agree that the breach of the
agreement would not confer on either of the
parties a right to enforce the agreement in
the court of law, there is no contract.
3. The terms of the offer must be certain
and not loose or vague.
If the terms of the offer are not definite
and certain, it does not amount to a
lawful offer.
“Unless all the material terms of the
contract are agreed, there is no binding
obligation.”
4. An invitation to offer is not an offer-
 An offer must be distinguished from an ‘invitation to receive

offer’.
 In the case of an ‘invitation to receive offer’ the person

sending out the invitation does not make an offer but only
invites the other party to make an offer.
 His object is merely to circulate information that he is

willing to deal with anybody who, on such information, is


willing to open negotiations with him. Such invitations for
offer are therefore not offer in the eyes of law and do not
become agreements by their acceptance.
Eg: An advertisement for sale of goods by auction does not
amount to an offer to hold such sale. It merely invites
offers.
5.Specific Vs General offer –
An offer is said to be “specific” when it is
made to a definite person or persons.
Such an offer can be accepted person or
persons to whom it is made.
Carlill vs Carbolic Smoke ball co.
6. Communication to the offeree-
 An offer is effective only when it is communicated

to the offeree. Until the offer is made known to


the offeree, there can be no acceptance and no
contract.
Lalman shukla Vs Gauri datt
Communication of special terms.
If the acceptor or the promisee had no knowledge
of special terms, before or at the time of contract,
they are not binding upon the acceptor.
Handerson Vs Stevenson
7. An offer should not contain any term
the non compliance of which would
amount to acceptance
 An offeror cannot say that if acceptance

is not communicated up to a certain


date, the offer would be presumed to
have been accepted. If the offeree does
not reply, there is no contract, because
no obligation to reply can be imposed on
him, on the grounds of justice.
8. An offer can have terms and
conditions-
 An offeror may attach any terms and
conditions to the offer he makes. He may
even prescribe the ode of acceptance.
The offeree will have to accept all the
terms of the offer. There is no contract,
unless all the terms of the offer are
compiled with and accepted in the mode
prescribed.
9.Two Identical offers do not make a
contract (Cross offers)
 When two parties make identical offers
to each other, in ignorance of each
other’s offer, the offers are ‘cross-offers’.
‘Cross- offers’ do not constitute
acceptance of one’s offer be the other
and as such there is no completed
agreement.
Lapse and Revocation of
offer
An offer will lapse-
 After stipulated or reasonable time

 If acceptance is not made in the prescribed

mode and in case no mode is prescribed , in


some usual reasonable manner
 After rejection

 By Death or Insanity of offeror or the offeree

before the acceptance


 By revocation of offer

 Subsequent illegality or destruction of subject

matter
ACCEPTANCE
 A proposal when accepted becomes a
promise.
 When the person to whom the proposal
has been made signifies his assent
thereto, the proposal is said to be
accepted.
Rules of Valid Acceptance
1.Acceptance must be given only by the
person to whom offer is made-
An offer can be accepted only by the
person or persons to whom it is made
and with whom it imports an intention
to contract; it cannot be accepted by
another person without the consent of
the offeror.
Boulton Vs Jones
2. It should be Absolute and unqualified
In order to be legally effective it must be
an absolute and unqualified acceptance
of all the terms of the offer. Even the
slightest deviation from the terms of the
offer makes the acceptance invalid. In
effect a deviation acceptance is
regarded as a counter offer in law.
 3. Acceptance must be expressed in some usual and
reasonable manner, unless the proposal prescribes the
manner in which it is to be accepted.
If the offeror prescribes no mode acceptance, the
acceptance must be communicated according to some
usual and reasonable mode. The usual modes of
communication are by words spoken or written or by
post or telegram, it is called an express acceptance.
When acceptance is given by conduct, it is called an
implied or tacit acceptance.
Mental acceptance ineffectual.
Mental acceptance or quiet assent not evidenced by
words or conduct does not amount to a valid acceptance.
 4. Acceptance must be communicated
by the acceptor.
For an acceptance to be valid, it must
not only be made by the offeree but
must also be communicated by, or with
the authority of, the offeree (or acceptor)
to the offeror.
Powell vs Lee
 5. Acceptance must be given within a
reasonable time and before the offer
lapses and/or is revoked.
To be legally effective acceptance must
be given within the specified time limit,
if any, and if no time is stipulated,
acceptance must be given within a
reasonable time because an offer cannot
be kept open indefinitely.
 6. Acceptance must succeed the offer.
Acceptance must be given after
receiving the offer. It should not precede
the offer.
Eg. In a company shares were allotted to
a person who had not applied for them.
Subsequently he applied for shares
being unaware of the previous allotment.
It was held that the allotment of shares
previous to the application was invalid.
 7. Rejected offers can be accepted only,
if renewed.
Offer once rejected cannot be accepted
again unless a fresh offer is made.
COMMUNICATION OF OFFER AND
ACCEPTANCE

 Communication of offer:
The communication of offer is complete
when it comes to the knowledge of the
person to whom it is made ,i.e., the
letter containing the offer reaches the
offeree
 Communication of acceptance:

1. As against the Proposer- Acceptance is


complete when the letter is put in a
course of transmission to him, so as to
be out of the power of the acceptor.
2. As against the acceptor- Acceptance is complete
when the letter of acceptance is received by the
proposer
 Communication of Revocation:

The communication of a revocation is complete (a)


as against the person who makes it, when it is put
into a course of transmission to the person to whom
it is made, so as to be out of power of the person
revoking it ,i.e., when the letter of revocation is
posted , and against the person to whom it is
made , when it comes to his knowledge ,i.e., when
the letter of revocation is received by him.
 Revocation of offer can be made anytime before the
communication of acceptance is completed as
against the offeror
 Revocation of acceptance can be made anytime
before the communication of acceptance is
complete as against the acceptor.
 If both letter of revocation and letter of acceptance
reach on the same time, then whichever is opened
first shall be binding
 In a telephonic contract, since communication of
offer and acceptance happens immediately, hence
no question of revocation arises.
Thank you

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