Offer and Acceptance PPV aaa ome ‘Communication of Offer, Acceptance and + offer Revocation Legal Rules as t0 ae © Contracts over Telephone or Telex or Oray 4 Special Terms in a Co Communication «# Accepiance When does an Offer come to an End? @ Who can Accept? # Questions—Objective, Test, Practical Acceptance 6 Legal Rules a8 0 OFFER tion of every agreement, there must be a definite offer by one person to another ang ince ‘ ; on volfied ‘acceptance by the person to whom the offer is made. An offer is a proposal by its ung ne party to another to enter into legally binding a ee ae | ates is = to have made a proposal when he “signifies to another his willingness to do or to abst 7 ‘om doing anything, wth a view to obtaining the assent of that other to such - or abstinence” [Sec. 2@). For example, A says to B, “Will you purchase my car for 50,000?” A, in this case, is making an offer to B as he signifies to B his willingness to sell his car for 50,000 with a view to obtaining B's assent to purchase the car. ‘The person making the offer is known as the offeror, proposer, Or promisor and the person to whom itis made is called the offeree or proposee. When the offeree accepts the offer, he is called the acceptor or promisee [Sec. 2 (c)]. How an Offer is Made? ‘An offer may be mi be made by express words, spoken or written. This is known as an express offer. For example, when A ‘ nA says to B, “Will you purchase my house at Meerut for 750,000?” or When 4 advertises in @ newspaper offer : Ting %50 to anyone who returns his lost dog, there is an expres offer Scanned with CamScanneraE ee fferand Accel ptance 19 : of the case- the ccumsaess ora for a certain Fare wikie v. London vehing machin ‘An offer may also be implied from the conduct ofthe parties © This . Known as an implied offer. Thus, when s route, there is an implied offer by the transport company oe bus [) The acceptance ofthe offer is complete as soon as a passenB ees a weighil Passenger Transport Board, (1947) | All. E.R. 258, C-A:} Likewise is installed on a railway platform ora public place, there is an im machine. Anyone by putting the required coin in the slot of the weit this offer. Where time for which a ship was chartered expired but WE Tt cy shipowner and remained in use by the other party, there was an IMP ec 357), [Bharat Petroleum Corp. Lid. Great Eastern Shipping Co. Lids ALR. ( a ; ce} When an offer is made toa definite person, i is called a specifi offer- Itgan be nore by the person to whom it is made. to continue nly When an offer is made to the world at large, itis called a general offer. Example: + Acompany advertised in several newspapers that a reward of £ 100 would be given to any Lace who contracted influenza after using the smoke balls of the company according to its Pri directions. One Af Carll wed the smoke balls according tothe directions of the company but contracted influenza, Fld, she could recover the amount as by using the smoke balls she had accepted the offer. A general offer is converted into a contract as soon as somebody comes forward and performs the conditions of te offer [Carlillv. Carbolic Smoke Ball Co., (1893)). Where an offer is made to the world at large, any person or persons with notice of the offer may accept the offer. When the offer is accepted by a particular person, there is a contract between the offerer and that particular person. If a large number of persons accept the offer, there are as many contracts as the number of persons accepting the offer. Where a reward has been offered for giving a specific piece of information, e.g. information about the thief of a certain property, or finding of a specific thing, acceptance can be made only by the first person who gives the information [Lancaster v. Walsh, (1838) 4 M. & W. 16]. What Constitutes an Offer? Not every proposal made by an offerer is legally regarded as an offer. The tests to determine whether or not an offer has actually been made are as follows: 1. The offer must show an obvious intention on the part of the offerer to be bound by it, ie, the offer must signify to the offeree his willingness to do or to abstain from doing something, Thus, if A jokingly offers B 10 for his typewriter and B, knowing that 4 is not serious, says. “I accept”, 4’s proposal does not constitute an offer. 2. The offerer must make the offer with a view to obtaining the assent of the offeree to such act or abstinence. 3. The offer must be definite. 4. It must be communicated to the offeree. These points have been discussed at appropriate places. Scanned with CamScanneri Act: G 1. bg swat vy al elles 1 Re Rules as Mer muse ps” Otter = nul ving ris. pattionship, 4 sto! 88 in law ig ted 00 SOOT I tg cause jg jf SOcial inv Capable of being aceePteY jot create legal roigg Bal Contract pS Mt SO intendacy wom even if it is accepted. GCF, as would result in q yt 2 Te thenitis acct An off, therefore, st O° * ” — led: loose aa nd not 1o0se and ya, the terms ofanam be defin mbiguous andl 667 canno Actua lationship." OMe are vague or indefinite. its 96° Examples: gs per annum if the house wag reo years aE 20) "ecorated according to the ThandsomneY contractual relation (Teo, fo rest (©) 4 offered to take a house on lease For th PUt into thorough repair and drawing FOO" Present style.” Held, the offer was 100 VaBe ¥ Portington, (1855) All E.R. 128} ‘The offer is not defini, sfferent ars : @) A says to B, “Il sell you neat.” Aowns Hee oe 15 a week “50 IONg as I can will an 2 . d to pay ved apart because of break. manage it". Held, although the [ legally ‘on not to create Ie, up of their marriage, could enter into @ ICT eg aq intent a ment discretionary terms of the arrangeme™ 95) relations [Gould v, Gould. (1970) 1 Orting a vague term, the agreement ig « : ao But if the agreement contains a machine not void on the ground of its being vague . should Example: P an agreement that the company s| ry subject to «es from time to time. Am F sold apiece of land to a motor compan 1 agreed by the parties fr pease ry buy all their petrol from F at a price never agreed ant mpany i ice was iE dispute was to be submitted t0 arbitration, ee Wa Merrol of reasonable quality a c ro) refused to buy. Held, there was a binding i itration [Foley v. Classi ‘mnable price to be determined in case of dispute by arbitration [Foley ssique a reas Coaches Ltd., (1934) 2 K.B. 1]. 3. An offer may be distinguished from: ‘on a (1) Adeclaration of intention and an announcement: A declaration by a person at he intends to do something gives no right of action to another. Such a declaration only ‘means that an offer will be made or invited in future and not that an offer is made now. An advertisement for a concert or an auction sale does not amount to an offer to hold such concert or auction sale [Executive Engineer. Sundargarh v. Mohan Prasad Sahu, AIR. (1990) Ori. 26]. Examples: (@ An auctioneer advertised in a newspaper that a sale of office furniture would ee held. A broker came from a distant place to attend that auction, but all the fr iy withdrawn, The broker thereupon sued the auctioneer for his loss ee binding roses en es of intention to do a thing did not tract with tl i not recover [Harriss Wien ‘ose who acted upon it, so that the broker could ‘on, (1873) LR. 8Q.B. 286]. Scanned with CamScannernn MM rece 7m Offer and Acceptance | 7 we a share his daughter would hat ca lave that ne ee tention [Re Ficus atement of int her wrote to his would be s he left. Held, it was merely @ ‘on by a Beauty Parlour oF 2 an announcement of a beauty competi ari oF scholarship examination by some College is not an offer (Rooke ¥ (1895) 1 Ch, 480}. " y of goods by a shopkeeper ) An invitari i fation to make an offer or do business: Display K ake ‘no i tothe his window, with prices marked on them, is not an offer but merely an invitalion ced prices. Likewise, quotations, jars sent to ate ‘to make an offer to buy the goods at the mark ‘alogues, advertisements in a newspaper for sale o ciation to the Potential customers do not constitute an offer. They are instead an invitation {0 1 Public to make an offer. A person, in ease the prices of the goods are marked, can force the seller to sell the goods at those prices. He can, at the most, ask the seller to sell the goods to him, in which ease he would be making an offer to the seller and it is up to the seller to accept it or not. fan article, or circul: Example: Goods are sold in a shop under the ‘self service’ system. Customers select goods in the shop and take them to the cashier for payment. The contract, in this case, 1S made, not when a customer selects the goods, but when the cashier accepts the offer to buy and receives the price [Pharmaceutical Society of Great Britain v. Boots Cash Chemists, (1953) 1 Q.B. 401]. Newspaper advertisements are not offers. 4 recognised exception to this is a general offer of reward to the public. Thus, when A advertises in a newspaper that he would pay 100 to anyone who finds and returns her lost dog, the offer is addressed to the first person who by performing the required act with knowledge of the offer of reward, creates an agreement. A Development Authority gave an advertisement of allotment of plots on first come first served basis on payment of full consideration. An application with full consideration was held to be only an offer which could be rejected. [Adikanda Biswal v. Bhubaneshwar Development Authority, A.LR. (2006) Ori. 36]. 4. Offer must be communicated. An offer, to be complete, must be communicated to the person to whom it is made. Unless an offer is communicated to the offeree by the offerer or by his duly authorised agent, there can be no acceptance of it. An acceptance of an offer, in ignorance of the offer, is no acceptance and does not confer any right on the acceptor. Examples: (a) S offered a reward to anyone who returned his lost dog. F brought the dog to S without having heard of the offer. Held, F was not entitled to the reward [Fitch v. Snedaker, (1868) 38 N.Y. 288]. (b) S sent his servant, L, to trace his missing nephew. He then announced that anybody who traced his nephew would be entitled to a certain reward. L traced the boy in ignorance of this announcement. Subsequently when he came to know of the reward, he claimed it. Held, he was not entitled to the reward [Lalmanj v. Gauri Dutt, (1913) 11 All. L.J. 489]. Scanned with CamScannermalta WW of Contract: General Principles go oF not 10 do sain er to dnety aedressed . ee be made with a view to obtaining the asses Tne Oe ggsumed i ee : as 0 ng must be made with a view to obtaining q he aie ay Pe gmmunicated pic? 290! Cpere A writes and not merely with a view to disclosing the intention 1" oC is ples ime ou have 6. Offer should not contain a term the non-com cee? Af as igation to o amount to acceptance. Thus, ama" cannot SY cceP ott ae Page and he by acertain time, the offer would be com Ty is Moffer Mee amount to ¢ oT pors' ree Tne burden of toB, "Lill sell you my horse for 2% accepted the offer,” there is 10 contract | o speak. However, if B is #0 possessio” 2 item a ed.as an offer Cf con ‘continues to use the horse thereateh Pe. te ifthe terms of # acceptance on his patt © refusal on the offere® ic 1. Artstrauent at price omer cos 552) to sll [Harvey ® Face» (1893) Example: Three telegrams Wore pen? es ou.” Harvey «@ ener aa a by a vvrowest pice wr BUT Fae (6) “Lowest EE Or yper Hall 0 rarvey ey. “We arse 0 OY to Facey) cg vee 7 et, tere vas sonctuded com pacey sell, in we 7 (1893) 4.¢. 592) e wilinge ve his owest PFC Tt Ie is. There COM ea ‘The frst telegram” 3 yo question wwe Po we Wer had DESM a Harvey's Jast telegram supplied mere i tion sorraat only ibe bad accePl Tenders n an invitation tof?) ian offer and may be ei 1 ‘Atender (in response ( oe 1, a definite offer 10 SUPP ds or services; 2, astanding offer 1. Tender as a definite offer, When tenders are invited for the suppl: or services, each tender submitted is an offer. The party inviting ten tender he chooses and thus bring about a binding contract. Example: A invites tenders A for the supply of 1,00.000 bricks. X, ¥, and Z submit the tenders. A : tee cepts. 1's tender. There is a binding contract between 4 and X. sy specified B00 ly of specified goods ders may accept any 2. Tender as a sta fer. Whi au inding offer. over a certain period, a ee Where goods or services are requil iu c required rtai i 2 fa liens Sea which is a ae offer The lance of ne ae ffect that as and when the goods or service: are equired, an order ed with the person who submitted tender and 4 mea date ee each tii isti i : lime a distinct contract is made. Scanned with CamScannerCoffer and Acceptance ! B Example; A rail; require over Y company invi a Year, Is PAny invited tenders for certain iron articles which it might ai ae *_§ tender wa 7 time under the at N88 Acepted fe vailay compl er the oege 8 8€C2pled. He supplied goods to the ral J is he ders given by n order given during the latter, He refused to execute an of iS ani of the Tency of t tender [Great Ne ndet: Held, 1” could not refuse to supply goods within t ‘orthern Rail v. Witham (1873) L.R. 9 CP. 16)- Where an Y Speci notice ofthe offeneg oS HE 10 be included i ese must be duly brought to the he offer in a contract, th is subsequently emia; cyt time when the proposal is made. Fit is not done and ifthe contact Presented in such iM®s the offeree will not be bound by them, Also, these terms should be into.a contract, MMF that a reasonable man can become aware of them before he enters Examples. (@) A hot . clas lic in a bedroom, exempting the proprietor fom libilty fr lass oF only when th excrete was ot effective asitcame tothe knowledge ofthe elt Court Lid., (19. 49) np os or a room had already been entered into [Olley v. Marlboroug! 6 . 2 i Company accepts goods of G for being carried without any conditions. damaged or oat S028 8 eteular to the consignors limiting its Liability for the goods : ost in transit. G is not bound by this condition since it is not communicated to ulm prior to the date of contract Te are attached to transactions like purchase ofa ticket fora joumey or deposit back ae it @ cloak room. Wherever on the face of a ticket the words “For conditions see * are printed, the person concerned is as a matter of law held to be bound by the conditions Subject to which the ticket i issued whether he takes care lo read them or not. The fact that he did not or could not read does not alter the legal position. Examples: (@) P deposited a bag in the cloak room of a railway station. On the face of the ticket, issued to him, was written “See back”. One of the printed conditions limited the liability of the company for loss of a package to £10. The bag was lost and P claimed £24.50 as its value. Held, P was bound by the conditions on the back of the ticket even if he had not read them [Parker v. S.E. Rail. Co., (1877) 2 CPD. 416]. (6) P agreed to purchase a machine and signed a contract to that effect. The contract contained several clauses in small print which P did not read. Held, P was bound by those clauses [L Estrange Graucob Lid., (1934) 2 KB. 394] (0) 7, a lady who could not read, took a ticket from a railway company. On the face of the ticket was written “For conditions see back”. One of the conditions absolved the railway company from liability for personal injuries to passengers, T'was injured by a railway accident. Held, she was bound by the conditions and could not recover damages [Thompson v LM, & S. Rail Co., (1930) | KB. 41). If conditions are printed on the back of a ticket, but there are no words at all on the face of it to draw the attention of the person concemed to those conditions, he is not bound by them. Scanned with CamScannerr t 241 Law of Contenet era Tinton a " ryt in he neh | ONCE if the conditions ate contai ‘ney % Person ‘Shormally not suppased to cont Teeviving the voucher ned in a voucher oF of the €° ain the conditions ¢ or receipt, = of cael other's offer, the fe offer a8 the offer ang ct (Tin ¥. Hoffmann, Cross Offers When two parties make identical offers 10 each of offers are cross offers. In euch 9 case. Court * the other as the acceptance and a& (1873) 27.271) IF ot Cjaed cote prance get of assenting by the ¢ the Ae! lings toe of his willingness to he ACCE| eptance of oa train of gunpowder. A ccontimet emerges from the aecePiane A aigectation 1 atch i810 0 son the offere offerec to an offer. nother words tS ua ENE = Tis MEANS TT thecomes je“toanol done. er when ACCC] es hound by the terme of the offer. His #29" eg, or UNITE 9 offer when ACER Tt predvecs something which cannot PE RST accepted“ not give legal right to the signifies his assent to the offer. the offer is S410 a mrsing ad red Dev. Auth, v, sta tat doe’ For attorment OF TS ¢ [Sec. 2 (B)}. An application fF 1 fajyarashira a promise [See. 2 (/)] «issued. (Me n. 104). Jetter of allotment is i Rg, 2010) Bom nicated by words, spoken be gathered from the applicant unless: rea mA Maharashira St. Human Rights Commissio™™ "gig Acceptance may be express OF implied. Wis ep rie W ‘or written or by doing some required i surrounding circumstances oF the conduc ommut hen it is to f the parti el triking tl ae host bidder. The auctioncer accepts the offer by striking the ct sis the highest bidder. (a) Atan auction sale, Sis the : eplance. hammeron the table, This isan implied aeceP say on her aie i the niece Stayed 1) A.widow promised fo bestow some immovable prop’ dence tll er death, Held, the (Uhr at he residence. The niece stayed with her at at Aa doapgat \ A. Rao, (1 Mad. 509]. niece was entitled to the property [J Rao v. ) Mad. 509). “Acceptance of an offer requires more than a tacit (implied) formation of intention 2 accept To give evidence of that intention, there must be some’ overt (apparent) act, or words spoken or \written must be used. A mere intention to accept unaccompanied by any external act will not be sufficient, Acceptance means in general communicated acceptance (Anson). 1. Who can Accept? Ce 7 particular offer. When an offer is made to a particular person, it can be accepted Ee ie it is accepted by any other person, there is no valid acceptance. The rule of law ear that if you propose to make a contract wit : itute himse a pose io make a contract with cl, B cannot substitute himself for A without Example: Boulton bou ight a hosepipe business from ved a debt, placed a 8s from Brock| tt lied sn order vi Brockichurst orthoses Jarcon Sr whom Brocklehurst even though the order was not Supply of certain goods. Boulton supplied be addressed to him, Jones tefused to pay Boulton for Scanned with CamScannerOffer and Acceptance I! 25 intended to set off his debt ‘was not within the power Jones, (1857) sc he, by ent : t Brockichurst ty tering into a contract with Brocklehurst, i of Boulton to step in eld, the offer was made to Brocklehurst and it 2H.and N, sgqy "M4 #eeet and, therefore, there was no contract [Boulton ¥ Under a quasi SntFact, Boulton can, however, recover the goods from Jones. ks eral offer. When an offer i .erson to the an offer is made to the world al large, any P ‘made can accept it (Carll! . Carbolic Smoke Ball Co., (1893) | QB. 256]. 2. Legal Ri ules as to Acceptance : ‘ance : satisfy the Bienes offer is the very essence of a contract. To be leg: 1. Hemust pee tition: ¢ in order to pape and unqualified, i,, it must conform with the offer. An acceptance, of the offer, wh inding, must be absolute and unqualified (Sec. 7 (1)] in respect of all terms on all matters eet Material or immaterial, major or minor. [Fhe partes are not cad idem ‘oncernin, t. oe ig the offer and acceptance, there is no contrac! (@ 4 ) i an offer to B to purchase a house with possession from 25th July. The offer Was owed by an acceptance suggesting possession from Ist August Held, there oe Ro concluded contract [Routledge v. Grant, (1828) 4 Bing. 653]. Offered to sell a piece of land to N at £ 280. N accepted and enclosed £ 80 with a Promise to pay the balance by monthly instalments of £ 50 each. Held, there was no contract between M and N, as the acceptance was not unqualified [Neale v. Merret, (1930) W.N. 189). (C)_N offered to buy J's horse if warranted quiet in harness. J agreed to the price and warranted the horse quiet in double hamess. Held, there was no acceptance [Jordan | ¥. Norton, (1838) 4M. & W. 155] (d@) A says to B, “I offer to sell my car for %50,000.” B replies, “I will purchase it for 745,000.” This is no acceptance and amounts to a counter-offer. 2. It must be communicated to the offeror. To conclude a contract between the parties, the acceptance must be communicated in some perceptible form. A mere resolve or mental determination on the part of the offeree to accept an offer, when there is no external manifestation of the intention to do so, is not sufficient [Bhagwan Dass Kedia v. Girdhari Lal, A.LR. (1966) S.C. 543]. In order to result in a contract, the acceptance must be a “matter of fact”. Acceptance of whom the offer ig ally effective, it must Examples: (a) A tells B that he intends to marry C, but tells C nothing of his intention. There is no contract, even if C is willing to marry A. (6) F offered to buy his nephew’s horse for £ 30 saying: “If ] hear no more about it I shall consider the horse is mine at £ 30.” The nephew did not write to F at all, but he told his auctioneer who was selling his horses not to sell that particular horse because it had been sold to his uncle. The auctioneer inadvertently sold the horse. Held, F had no right of action against the auctioneer as the horse had not been sold to F, his offer of £ 30 not having been accepted [Felthouse v. Bindley, (1862) 11 C.B. N.S.) 869]. e 4 Scanned with CamScanner© 26 |! Law of Contract : General Principles coal was sent ting to the supply of coal w ont (the ag (0) A draft agreement relat The manager We the wets ei acceptance. THe manag Ma op may ampan A ending to send ee Met® drawer apt he dain he toe ae up. By Some OVETSEN the gay, solicitor for a formal con here was no contract [Brogden 1, Mere tment a remained in the oe oe In some cases the offerer may disper Rail Co., (1877) 2.4 the perfc wi bs sf acceptance. It happens ee 7 oo of cena the commana ream required sti done ( 8). ot Sd conditions takes DIR Tis Co. (1893) QB. 256, ‘lee Carlilt y. Carbolic Smoke aie diceiee and cmmcre) re itay e company accord d ee Seale offer by doing the required act and she a it amounted to accep claim the reward. de prescribed or usual and reasonable mogs 3. It must be according (0 - n the mode prescribed, o some usual and reasons the acceptance is not accor a rived) the offerer may intimate t0 the offer win © mode (where no mode is a is not according to the mode prescribed ang = ae aa i accepted in the prescribed mode only. If he does not oe eee to have accepted the acceptance [Sec. 7 (2)), inform the offre, os oi makes an offer to B and says: “If you accept the offer, reply by wira » cample: B sends the reply by post. It will be a valid azceptance unless A informs B that the acceptance is not according to the mode prescribed. _ 4. It must be given within a reasonable time. If any dl : speci the acceptance must be given within that time. If no time limit is specified, it must be given within a reasonable time. Exanple:On jne 8, M offered to tke shares in R company. He received a letter of acceptance on November 23. He refused to take the shares, Held, Mwas entitled to refuse as hs offer had lapsed as the reasonable period during which it could be accepted had elapsed (Ramsgare Vietoria Hotel Co. v. Montefiore, (1886) LR. 1 Ex. 109), 5. It cannot precede an offer. If the acceptance precedes an offer, it is not a valid acceptance and does not result in a contract. Example: In a company, shares were alloted to a Person who had not applied for them, Subsequently when he applied for shares, he was unaware of the previous allotment. The allotment of shares previous to the application is invalid, Scanned with CamScannerofferand Accepianee | 2” Examples: hall .n days. sha (0 A wrote to 2, offer you my ear for ¢50,000. I don't heat from You! ate assume that you accept." B didnot reply at all, Tere is no contrac Harvey \. Facey, Chapter. "ev wt Facey, (1893) App, Cas. $52 discussed earlier in this ze Soe Ac cl ie ance Biven by a person other than the offeree of by @PEFSOM NT unguthorised sere teeeplance is ineffective in aw, Likewise information receive Person is ineffective [Powel v: Lee, (1908) 24 T.L.R. 606]- ed to Acceptance Subject to Contract a Where an offeree accepts an offer “subject to contract” or “subject to formal comme Subject to contract to be approved by solicitors the matter remains in the negotiniiY and the parties do not intend to be bound until a formal contrac is prepared and — ¥ = Example: Cand D signed an agreement forthe purchase of a house by D “subject 10.8 POP contact” to be prepared by C's solicitors, A document was prepared by its sOUCKOe approved by D's solicitors, but D refused to sign the document. Held, there was no contra the agreement was only conditional [Chillingworth v. Esche, (1924) 1 Ch. 971. Agreement to Agree in Future If the parties have not agreed upon the terms of their contract but have made an agreement 10 agree in future, there is no contract. Lord Wensleydale observed that “an agreement to be finally settled must comprise al the terms which the partes intend to introduce into the agreement. An agreement to enter into an agreement upon terms to be afterwards settled between the parties is a contradiction in terms. It is absurd to say that a man enters into an agreement till the —_ of agreement are settled; until those terms are settled, he is at liberty to retire from the bargain [Ridgeway v. Wharton, (1857) 6 H.L.C. 238). Examples: (a) An actress was engaged by a theatrical company for a certain perfect. One of the terms of the agreement was that if the play was shown in London, she would be. engaged at a salary to be mutually agreed upon. Held, there was no contract [Loftus v. Roberts, (1902) 18 TLR. 532]. (b) Montreal Gas Co. v. Vasey, (1900) A.C. 595, discussed in the preceding Chapter. (c) Foley v. Classique, Coaches Ltd., (1934) 2 K.B. 1, discussed earlier in this Chapter. COMMUNICATION OF OFFER, ACCEPTANCE AND REVOCATION An offer, its acceptance and their revocation (withdrawal) to be completed must be communicated. When the contracting parties are face to face and negotiate in person, a contract comes into existence the moment the offeree gives his absolute and unqualified acceptance to the proposal made by the offerer. When the parties are at a distance and the offer and acceptance and their revocation are made through post, i.e., by letter or telegram, the rules contained in Secs. 3 to 5 apply. These rules are as follows: Scanned with CamScannerBil Law of. ‘Contract : General Principles “vely are deemed to Mode of Communication (Sec. 3) o amt mans on cat” Tink O cetance oF Fevocation, ani ovoetecer cco ods spoken or The communicati septance and 1B BF ofl te an offe Communication of offer, its acceptance sin t of ch? ica" ic place is an offer, mi . ade by any (a) act. or (b) omission, of the PAY ging : aay must however have the effect of communis be © publ Switching off the vation 1 ; In other words, offer, acceptance or revoetlO™ hing nae a0 it wel written, or by conduct. Thus, installation of a weet? putting of a coin in the slot of the machine IS machine amounts to revocation of the offer. cer is complete when it ofan off sec, 4 omplete Oni ¢ letter is posted on When is Communication C : ion ototer (see 4 P20 ayy ii8 cet Knovedge ofthe ET yee to setter, 16 08 12th July. Bie i che 5 acceptance is ses, by a letter gives I of an is Bon 2th: ge when B ee er unica fier is cOmPr rg 2). ™ be out of th ‘The communication of OFT cae, 4, : A acceptance ( Communication of complete— + the proposer whe? eptor; en it comes Communica comes to the Example: A propos’ 1th July. It reaches a cours it is put int post instant. The letter t 0 : etter seat P fate, as against, when f ce is COMP Ts by A, ie, on 15th, by above case, DY fie ace i Gae the lette! : ee mia i waking back—recalling the eter is posted, £2 0 13th a ea seeking Communication ition (Sec: aa - offer oF vreceptance: or “withdrawal”. Tt may ‘evocation is complete— / is put into @ cou! uo makes it when itis Pu feos re erate person wo maKES re, 50 as to be out of en it comes to his knowledge. as agains power of the acc knowl as against the acceptor Example: y post o7 13th irse of | transmission tO the person to it; as against the person as against the whom iti ma to whom itis made, wh Examples; : (a) A proposes, by a leter, to sell a house to B at certain price. The letter is posted on 15th ‘May. Itreaches B on 19th May. A revokes his offer by telegram on 18th May, The telegram wn is complete as against A when the telegram is reaches B on 20th May. The revocatiot dispatched, ie., on 18th, It is complete as against B when he receives it, ie., on 20th. (6) Toffered, by a letter of October I, to sell goods to B in New York. B received the offer on 1th and immediately telegraphed his — of S| ta his acceptance. On 18th, T wrote a letter revoking his reached B.A contract was eee iho ae ih oes wes Ot ao tes unt Van Tienho Ictober when B accepted en 5 CRD. 34. Lindley observed in tiscare, "A cage ob cine , “A state of mind not Scanned with CamScannere 1 29 otter and Acceptance |! nce (Sec. 5) atany time before Time for Revocation of Offer and Aceep ad be revol oes: ‘Tine for revacation of proposal (See. 5, 1). proposal ay Per but not afterwards the communication aig accepance is complete as against IREPTOP AT ovo at any Time for revocation of acceptance s against the acceptor, But ua time before the communication of th hs afterwards, is posted on the : 7 ‘The letter is pos' 9 sell his house to B. ae “The letter reaches Example: A proposes by a letter sent by post 10 " woxes by a letters Me nt Ist of the month. B accepts the proposal by a letter sent by Post Aon the 6th, iter of acceptance, i.e.» 4th, but not 1 any time before B posts his la A may revoke his offer aerwards, B may revoke ie., 6th but « before the letter of acceptance reaches A, /-e-, ‘eptance at any communication of acceptance is But in Indian Law revocation of communication. Revocation of acceptance is not possible in English Law a: complete as against both the offerer as well as the acceptor. acceptance is possible between the time gap by a speedier means o} Loss of Letter or Acceptance in Postal Transit ¢ letter of acceptance is posted. The tray or is lost through an accident in iptance is correctly d and sufficiently Sec. 4 even if Acceptance is complete as against the offerer as soon as th contract is complete even if the letter of acceptance gocs as! the post, But in order to bind the offerer, it is important that the letter of acce addressed, sufficiently stamped and posted. If it is not correctly addresse stamped, the communication of acceptance is not complete within the meaning of itis posted, Lord Cottenham L.C,, in delivering the judgment in the House of Lords in Dunlop v. Higgins, (1849) | H.L.C. 381 enunciated the principle in the following words: “If the letter of acceptance is posted in due time, the acceptor is not responsible for any casualties in the post office .... If the party accepting the offer puts his letter into post on the correct day, has he not done everything he was bound to do? How can he be responsible for that over which he has no control?” 1. Contracts over Telephone or Telex or Oral Communication Modern business is mostly done through telephone or telex. A contract by telephone or telex has the same effect as an oral agreement entered into between the parties when they are face to face. But the offeree must make sure that his acceptance is properly received, i.e., heard and understood by the offerer [Kanhaiyalal v. Dineshwara Chandra, A.L.R. (1959) M.P. 234]. Example: A makes an offer to B across a river or a courtyard. B shouts back accepting A’s offer, but A does not hear B’s reply as it was drowned by an aircraft flying overhead. There is no contract at that moment. If B wishes to make a contract, he must wait till the aircraft is gone and then shout back his acceptance so that A can hear what B says. Until A hears B’s reply, there is no contract, An example given in Entores v, Miles Far East Corporation, (1955) 2 All E.R. 493 is enlightening in this connection: Scanned with CamScanner301) Law of Contract: General Principles 1c. SUPPOSC FOr insta, 9 ephon i es Now take 4 y tclepnen apy. the line goes «°° ne ake a case where two people make a contact ris inement. The = thar a offer to aman by telephone. a i the mo conta will KNOW that the ten My at I do not hear his words of acceptance: Tere 4, Bul IN, “Something 0 signi yn ‘ay not know the precise moment when te Fe FT aya RA fore, get ChFOURh again em conversation was abruptly broken off, because peor qnusts ay of the conversation. If he wishes to make # contrac! court in Bhagwandas Ke Ihe wishes to make sure that I heard.” spy tne sure” iH a vas encore — The principle of the Entores cas bit en 4 543 Girdharilal, A.LR. (1966) $C. 5 eptance cceP! 4 on of Offer and A tion of offer is complete, whe, Summary of Communication a coil ion oer). : ' ach othe Orr is ie . ies ar in presence of 209 1 ho ea : mu then com © When parties are ata distane ven offere en / 12S hen he nea 7 cation of acceptance iS Complete i muni 1 in case of phone/telex eptance is complete © When parties are in presen uts the letter in course of offerer hears it. mee then commu! distance, When parties are at 2 ie u offerer ves it = in case of letter, the oe rer rece oe transmission and 25 re earaieceived bY offerer ir xX, sin case of phone/telex, | (communication is instantaneous) aun = 1? 2. When does an Offer come fo an End? at “An offer may come to an end by revocation OF lapse, or rejection. eee Revocation or lapse of offer. Sec. 6 deals with various modes of revocation © : 8 re toiit, an offer is revoked— : / 1. By communication of notice. of revocation by the offerer at any time before its acceptance is complete as against him [Sec. 6 (1)]- Example: At an auction sale, A makes the highest bid for B’s goods. He withdraws the bid before the fall of the hammer. The offer has been revoked before its acceptance. 2. By lapse of time if it is not accepted within the prescribed time. If however, no time is prescribed, it lapses by the expiry of a reasonable time [Sec. 6 (2)]. Examples: (@) Ramsgate Victoria Hotel Co. i fens Metre Co Monoteflore, (1866) L.R. | Ex. 109, discussed earlier Scanned with CamScanneree 13 Offer and Acceptance sec. 6 (3)}: 3. By non-fulfiment by the offeree of a conlion precedent (0 aecePrare, paebes Example: S,a seller, agrees to sell certain goods subject (0 the cone OTT Ae the offer bays the agreed price before a eetain date IB fils © PAY ea stands revoked, iy the 4 By death or insanity of the offerer, provided the offeree comes en of the Acceptance (Sec. 6 (4)]. If he accepts an offer in ignorance of the deal olferer, the aeceptance is valid. Im addition to the above cases dealt with in Sec. 6, an offer is also revoked. ALR Goel Electric Stores, ification in the terms ffer, such qualified ted, a contract 5. Ifa counter-offer is made to it (U.P. State Electricity Board v. (1977) All, 494, 497}: Where an offer is accepted with some mo of the offer or with some other condition not forming part of the o Acceptance amounts to a counter-offer. When a counter proposal is accep’ arises in terms of the counter proposal notin terms of the original proposal Examples: S y the offer. (@)_ IF offered to sell a farm to H for £1,000. H offered £950. W seat Se Subsequently, /7 offered to purchase the farm for £ 1,000. Held, ther as H by offering £950 had Bi the original offer. The counter-offer to a proposal amounts to its rejection [Hyde v. Wrench, (1840) 3 Beav. 334]. (8) Anofferee agreed to accept halfthe quantity of goods offered by the offerer on the same terms and conditions as would have applied to the full contract Held, there was no contract as there was a counter-offer tothe offer [Zinn v. Hoffman, (1873) 29 L.T. 71). 6. Provisional acceptance: An acceptance is sometimes made subject to a final approval 7 Provisional acceptance of this kind does not bind either party until the final approval is given. Both the offerer or the acceptor can withdraw their offer/acceptance before final acceptance. Therefore, in cases of tenders and auctions, offer/acceptance can be withdrawn before final acceptance. 7. If an offer is not accepted according to the prescribed or usual mode, provided the offerer gives notice to the offeree within a reasonable time that the acceptance is not according to the prescribed or usual mode. If the offeror keeps quiet, he is deemed to have accepted the acceptance [Sec. 7 (2)]. 8. If the law is changed: An offer comes to an end if the law is changed so as to make the contract contemplated by the offer illegal or incapable of performance. An offer can, however, be revoked subject to the following rules: (a) Itcan be revoked at any time before its acceptance is complete as against the offerer. (6) Revocation takes effect only when it is communicated to the offeree. (c) If the offerer has agreed to keep his offer open for a certain period, he can revoke it before the expiration of that period only— (i) if the offer has in the meantime not been accepted, or (ii) if there is no consideration for keeping the offer open. Rejection of offer. An offeree may reject the offer. Once he does that, he cannot subsequently accept it. Rejection of the offer may be expressed or implied, Express rejection: The offeree may reject the offer expressly, ie. by words written or spoken. Express rejection is effective only when notice of rejection reaches the offerer. Scanned with CamScannerEe —— 32 II Law of Contract : General Principles peav- 334); or 7 7 a ; (1840 © “Jjscussed earlier Nortel implied by law Implied rejection: Rej fer [Hyde v wrene!> ion of the offer (a) where tI offeree makes a counter- [yordan © (8) where the offeree gives a condition: in this Chap EEE EE EEE eee eee Scanned with CamScanner