ESSENTIAL OF VALID OFFER

The following are the essential elements of a Valid Offer:

1. It must be capable of creating legal relations: The offerer must intend the creation of
legal relations. He must intend that if his offer is accepted a legally binding agreement shall
result. Social or domestic agreement does not express a legal relation.
For example: ‘A’ accepts an invitation to dine at B’s place on a certain date but fails to turn
up on the appointed date, ‘A’ cannot be sued for breach of a contract, because it was the
social arrangement and parties do not intend legal relation.

The leading case on this point is BALFOUR V.S BALFOUR

2. It must be certain, definite and not vague: No contract can come into existence if the
terms of the offer are vague or loose and indefinite. Both the parties should be clear about the
legal consequences arising out of a contract. A vague offer does not convey what it exactly
means.
For example: The leading case on this point is TAYLOR V.S PORTINGTON (1855)
‘A’ agreed to take B’s house on rent for three years at the rent of £ 85 per annum provided
the house was put into thorough repair and the drawing rooms were decorated “according to
present style”
It is a vague term, because the term “present style” may mean one thing to ‘A’ and another to
‘B’. Hence the agreement was void on the ground that the terms of the offer were vague and
uncertain.

3. It must be communicated to the offeree: There can be no offer by a person himself. It

must always be communicated to the offeree. Offer must be communicated to offeree, if there
is no communication there is no acceptance in the contract.
For example: The leading case on this point is LALMAN SHUKLA V.S GAURI DUTT
(1913)
‘D’ sent his servant ‘P’ to trace his missing nephew, ‘D’ in the meantime announced a reward
for providing information about the missing boy. P, in ignorance of the announcement, traced
the boy and informed ‘D’. ‘P’ later on came to know of the reward and he claimed it. His
claim was dismissed on the ground that he was ignorant of the offer. It was further held that it
was the duty of the servant to search for the boy.

4. Offer must be made with a view to obtaining the assent of the other party: An offer
must be distinguished from mere expression of intention.
For example: The leading case on this point is HARRIS V.S NICKERSON (1873)
‘N’ advertised in the newspaper to affect the sale of his goods on a particular day at a
particular place. ‘H’ travelled a long distance to bid for the things. On arrival, he found that
the sale was cancelled. He sued ‘N’ for breach of contract. It was held that advertisement was
merely an expression of an intention and not an offer which could be accepted by travelling
to the place of intended sale.
5. An offer may be conditional: An offer can be made subject to a condition. If the offer
contains certain conditions and the proposer has done what was reasonably sufficient to give
the acceptor notice of the conditions, the person accepting the offer is presumed to have
accepted it, with the conditions so attached.
For example: The leading case on this point is THOMSON V.S L.M & S. RAILWAY
(1930)
‘T’, who could not read, took an excursion ticket on the railway. On the front of the ticket
was printed ‘for condition see back’. One of the conditions was that the railway company
would not be liable for personal injuries to a passenger. ‘T’ was injured by a railway accident.
Held ‘T’ was bound by the conditions and could not recover any damages.

6. Offer should not contain a term the non-compliance of which would amount to
acceptance: One cannot say while making the offer that if the offer is not accepted before a
certain date, it will be presumed to have been accepted.
For example: ‘A’ writes to ‘B’, “I offer to sell my house for Rs 4, 00,000. If I do not receive
a reply by next Monday, I shall assume that you have accepted the offer. There will be no
contract if ‘B’ does not reply.

7. Lapse of an offer: An offer lapses in the following four cases:

i) If either offerer or offeree dies before acceptance.
ii) If it is not accepted within a specified time or reasonable time.
iii) If a counteroffer is made the original offer lapses.
iv) An offer can also lapse by revocation.

8. An invitation to offer is not an offer: An offer must be distinguished from an invitation

to offer. In the case of an “invitation to offer” the aim is merely to circulate information of
readiness to negotiate business with anybody who on such information comes to the person
sending it. Such an invitation is not offered in the eyes of law and do not become promises on
acceptance.
For example: The display of goods in a shop with price tags attached is an invitation to offer.
Similarly, advertisement for sale or auction of goods notice for tender, a statement in the
railway time table regarding the departure of certain train at a certain time etc are not an offer
but only an invitation to offer.