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offer
INDIAN CONTRACT ACT, 1872 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;
Essential elements
• It must be made by one person to another
person. In other words, there can be no proposal
by a person to himself
• It must be an expression of readiness or
willingness to do( i.e. a positive act) or to abstain
from doing something( i.e. a negative act)
• It must be made with a view to obtain the the
consent of that other person to proposed act or
abstinence.
Acceptance
• Sec 2(b) When the person to whom the
proposal is made signifies his assent thereto,
the proposal is said to be accepted. A
proposal, when accepted, becomes a promise;
• (c) The person making the proposal is called
the "promisor", and the person accepting the
proposal is called the "promisee";
• Promisor=Offeror , Proposer
Promisee= offeree ,acceptor
• An offer may, either be an express offer or
implied offer
• Express offer is one which is made by works
spoken or written.
• Implied offer is one which is made otherwise
than in words. It is inferred from the conduct
of the person. Example boarding a bus
• when a person gets into motor bus or hires a
taxi-car going from one place to another.
• He undertakes to pay.
• Automatic machine which vends coffee.
• The offer must be certain or the terms capable
of being made certain
• Section 29 -
• Agreements, the meaning of which is not
certain, or capable of being made certain, are
void.
• (a) A agrees to sell to B "a hundred tons of oil". There is
nothing whatever to show what kind of oil was
intended. The agreement is void for uncertainty.
• (b) A agrees to sell to B one hundred tons of oil of a
specified description, known as an article of
commerce. There is no uncertainty here to make the
agreement void.
• (c) A, who is a dealer in coconut—oil only, agrees to
sell to B "one hundred tons of oil". The nature of A's
trade affords an indication of the meaning of the
words, and A has entered into a contract for the sale of
one hundred tons of coconut—oil.
• (d) A agrees to sell to B "all the grain in my
granary at Ramnagar". There is no uncertainty
here to make the agreement void.
• (e) A agrees to sell to B "one thousand mounds of
rice at a price to be fixed by C". As the price is
capable of being made certain, there is no
uncertainty here to make the agreement void.
• (f) A agrees to sell to B "my white horse for
rupees five hundred or rupees one thousand".
There is nothing to show which of the two prices
was to be given. The agreement is void.
LEROY v SOUTH COAST SECURITY(1991 N.L.380)
• A notice on private round land that
unauthorised or unlawfully parked vehicles
would be immobilized and a levy charged for
release –it is only a warning not an offer.
• Montreal gas co v Vasey (1900 A.C. 595)
• The plaintiff relied on a clause that if the
company were satisfied with him as a
customer the co would “favourably consider
an application for renewal of the contract”
• The court held that there was nothing in these
words to create a legal obligation.
General offer Sec 8
• Performance of the conditions of a proposal,
or the acceptance of any consideration for a
reciprocal promise which may be offered with
a proposal, is an acceptance of the proposal.
• General offer vs specific offer
• Specific offer • General offer
• When it is addressed to • When it is made to
a definite individual or unascertained
body of individuals individuals.
• Offer is made to • It is made to world at
individuals large
BOULTON v JONES
• X offers to buy a car from Y for Rs.2 Laks. This
offer is a specific offer which has been made
to a definite person Y. No person other than Y
can accept this offer.
HARBHAJAN LAL v HARCHARAN LAL
(AIR ALL 539)
• X advertised in the newspaper that he would
pay RS.5000 to anyone traces his missing boy.
• Y, who knew about the reward traced that boy
and sent a telegram to X that he had found his
son. It was held that X was entitled to receive
the amount of reward.
Fisher v.Bell
• The respondent in a showcase of his shop a
flick Knife with a marked prize. Whether it
amount an offer for sale. Court held “ the
knife is there inviting the people to buy and in
ordinary course for sale but t a special statute
overrides the general law since it is prohibited
weapon.”
CARLIL v CARBOLIC SMOKE BALL CO
LTD(1983,1 Q.B 256)
• The defendants advertised that they would
pay £ 100 to anyone who caught influenza
after using their smoke ball thrice daily for
two weeks. They stated that £ 1000 was
deposited in a bank to show their sincerity.
• Mrs. Carlil relaying on the advertisement,
used the smoke ball for the prescribed period.
Having caught influenza ,she sued for the
reward.
• The company was held liable. The declaration
was a true offer and not a mere
advertisement. The bank deposit shown the
intention. The offer was to anybody
performing the condition mentioned in
advertisement. The performance of the said is
the deemed acceptance of the offer.
• Chornton v. Shoe Lane parking Ltd. 1971 2QB
163
• A notice at entrance of the automatic car park
may be offer which can accepted by driving in.
• Offer • Invitation to offer
• Where a person shows his • Where a person invites
willingness to enter into a others to make an offer to
contract. him.
• An offer is made by a • The purpose of inviting an
person with the purpose offer is to receive offer.
of enforcing the contract.
• An offer if acted upon • An invitation to offer , if
results in a contract acted upon results in offer
Invitation to Offer.
Offer is different from invitation to offer. Offer can
only be accepted. Window display in shop is only
an invitation of offer.
Pharmaceutical society v. Boot cash chemist 1953
1 QB 401
When a customer picks up an article in a self service
and takes it to a casher desk for payment, his
action is not acceptance to an offer to sell but an
offer buy which shopkeeper may or may not
accept.
Badriprasanth v. state of MP(AIR 1976)
41
The Indian Contract, 1872 & The Specific Relief Act, 1963 (Contd.)
COMMUNICATION IN LAW OF CONTRACT ( Contd.)
42
The Indian Contract, 1872 & The Specific Relief Act, 1963 (Contd.)
COMMUNICATION IN LAW OF CONTRACT ( Contd.)
Communication by Post – Rules – contd:
Rule 3: The rule of acceptance is complete as soon as it is posted is to be
applied even if the letter of acceptance is lost in transmission. –
HOUSEHOLD FIRE INSURANCE CO., v GRANT, 1879 Ex. D 216.
Rule 4: Communication to a wrong person or to a wrong address will not
bind the offeror. – KARAN SINGH v THE COLLECTOR,
CHATTARPUR, AIR 1980 M.P. 89.
Note: The above rules are followed in English Law to the true letter and
spirit since acceptance once posted cannot be withdrawn. However, these
rules are applicable in Indian Law also subject the manner in which
communication becomes complete as per Section 4 of ICA.
Acceptance by Telephone and Telex: Being instantaneous mode of
communications the principle regarding the place of conclusion of contract
gets modified.
Telex: ENTORES LTD. V MILES FAR EAST CORPORATION, 1955 2 Q.B.
327.
Telephone: BHAGHWAN DAS v GIRDHARILAL & CO., 1966 S.C. 543.
43
The Indian Contract, 1872 & The Specific Relief Act, 1963 (Contd.)
44
When an offer comes to an end?
• An offer must be accepted before it lapses
(comes to an end).
• An offer may come to an end in any of the
following:
• By revocation
• By lapse of time
• By death or insanity of the offeror or offeree
• By failure to accept condition precedent
• By counter offer
• By not accepting in the prescribed mode
• By rejection of offerby the offeree
• By subsequent illegality or destruction of
subject matter
By revocation