Final term course

1-Offer
2-Revocation of offer
3-Acceptance of offer

Offer or proposal

Section 2(a) defines a proposal as, “when one person siginfies to another his/her 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 isset to make a proposal”.

Essentials of a valid offer

It May be expressed or implied

An offer may be made by word or by conduct, an offer which ismade by words spoken or written is
called an express offer. Theimplied offer appears from the action, conduct of parties, courseof dealings
or circumstances of the case.

It Must create legal relations

The offer must be made to create legal relations other wise therewill be no agreement. In Business
transactions there is apresumption that the parties intend to create legal relations.

It Must be Definite & clear

if the terms of an offer are not definite and clear, it can not be called a valid offer. If such offer is
accepted, it does not create a binding contract.

It is different from invitation to offer

In an invitation to offer,the person making the invitation does not make an offer but only invites the
other party to make an offer.

It May be specific or General

• A specific offer can be accepted only by the person or persons to whom It is made. A general offer is
one which is made to public in general and it may be accepted by anyperson who fulfills the conditions
mentioned the conditions in it.

IT Must be communicated to the offeree

If an offer is not communicated to the offeree it can not beaccepted. An acceptance of offer, in
ignorance of it is not a validacceptance and does not create any legal obligations. Thus anoffer which is
not communicated is not a valid offer.
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It Should not contain negative condition

An offer cannot say that if acceptance is not communicated up to certain date , the offer would be
presumed to havebeen accepted.

IT may be subject to Any condition

An offeror may include any condition in his offer. There is no contract, unless all the conditions of the
offer are accepted.

It Must Not contain cross offers

When two parties make similar offers to each others inignorance of each others offer, such offers are
calledcross offer. The acceptance of cross offer does notresult in complete agreement.

2-Revocation of offer
Revocation of offer is the withdrawal of an offer by the offeror so that it can no longer be accepted.
Revocation takes effect as soon as it is known to the offeree. An offeror may revoke an offer before it
has been accepted, but the revocation must be communicated to the offeree.

Notice of Revocation

An offer can be revoked by sending a notice of revocation to theother party.

Lapse of Time

• When the offer is kept open until a specific time, it terminates if it is not accepted by that time. If the
offer does not specify the time, it terminates after the laps of a reasonable time.

Failure to fulfill condition

An offer is revoked if the offeree fails to fulfill the conditionsmentioned in it.

Death or Insanity of offeror

An offer is revoked by the death or insanity of the offeror. If the fact ofhis death or insanity comes to the
knowledge of the acceptor beforeacceptance. If the offeree does not know that the offeror has died
orbecome insane and gives his acceptance, it is valid acceptance.

Revocation of offer by Offeree

If the offeree rejects the offer and communicate the rejection to offeror, the offer shall terminate even
though the period for which theoffer was kept open may not have yet expired.
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Counter offer by the offeree

When the offer is accepted with some changes in the terms of offer such acceptance is called counter
offer. An offer is terminated bymaking the counter offer. A party making a counter offer can notaccept
the original offer.

Death or Insainty of the offeree

An offer can be accepted only by the offeree. It can not be accepted byits legal representatives on his/
her death. If the offeree dies orbecomes insane before the acceptance the offer terminates.

Subsequent illegality

An offer lapses if it becomes illegal before its acceptance.An offer may also terminate when it becomes
illegal due tochange in law before acceptance.

Destruction of subject Matter

An offer lapses if the subject matter of the offer destroys before its acceptance by the other party.

Acceptance of Offer
Sec 2 (b) defines Acceptance as, “ when the person towhom the proposal is made signifies his/ her
assentthereto, the proposal is said to be accepted. A proposalwhen accepted becomes a promise.”

Essentials of a valid acceptance

It Must be given by the offeree

An offer can be accepted only by the person to whom it is made. It cannot be accepted by another
person with out the consent of offerer. If the offeris made to a particular group it can be accepted by
any member of that group.If the offer is made to general public it can be accepted by any person
whohas the knowledge of the offer.

It Must be absolute and unconditional

If the offeree imposes any condition in his/her acceptance it is not a validacceptance but a counter offer.
As result of counter offer there will be nocontract until the counter offer is accepted by the original
offerer.

It Must be in prescribed Manner

If the offerer has prescribed any particular manner ofacceptacne, it must be given according to that
particular manner. If no particular manner is prescribed in the offer then acceptance should be made in
a reasonable manner.

It Must be communicated to the offerer

The acceptance must be communicated to the offerer in a clear manner by the offeree or his agent.
Mere expression of intension to accept an offer is not a valid acceptance.
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IT May express or implied

When an acceptance is given by words spoken or written,it is called express acceptance when it is given
by conduct or action is called implied acceptance.

It Must Follow the offer

Acceptance must be given after receiving the offer. Itshould not come before the offer. If someone
performsany act in ignorance of the proposal there will be nocontract because without an offer no
acceptance can bemade.

IT Must be given with in reasonable time

For an valid acceptance it must be given within the timespecified by the offeror. If no time limit is
mentioned theacceptance must be given with in reasonable time. Reasonabletime depends upon the
circumstance of each case.

Communication of Offer

Sec 4 explains ,“ The communication of a proposal is complete when itcomes to the knowledge of the
person to whom it is made.”

Communication of Acceptance

The communication of an acceptance is complete:

a)As against the proposer, when it is put in course of transmission to

him/her, so as to be out of power of the acceptor

b)As against the acceptor when it comes to the knowledge of

proposersec (4)

Communication of revocation

The communication of revocation is complete:

a) As against the person who makes it,when it is put in course of transmission to the person to whom itis
made, so as to be out of the power of a person who makes it.

b) As Against the person to whom it is madeWhen it comes to his/her knowledge. Sec (4)
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