Proposal or Offer

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
Ex: When ‘A’ says to “B”, Will you purchase my
house at Hyderabad, for 10lakhs.
 Expression of willingness

To do something Not to do something

with a view to obtain consent of

other party
The person making the proposal is called the
“Promisor”

The person accepting the proposal is called the

“Promisee”

Offeror: The person who made an offer

Offeree: To whom the offer is made

 Offer

Express Offer Implied Offer

Written Oral Conduct

1. Offer must intended to create a legal relationship
Balfour Vs Balfour
2. The terms of the offer must be certain or at least
capable of being made certain.
3. Offer must be communicated.
4. Must be made with a view to obtaining the assent.
5. Offer should not contain a term the non compliance of
which may be assumed to amount to acceptance.
6. A statement of price is not an offer.
1. Offer must intended to create a legal relationship.
Balfour Vs Balfour
2. The terms of the offer must be certain or at least capable of being
made certain.
➢ In order to infer the existence of an agreement, the first task is to
prove the presence of a definite offer made by the offeror.
➢ The offeror must have completed his share in the formation of
the agreement, leaving to the offeree the option of acceptance or
refusal.
➢ The offeror must have declared his readiness to undertake an
obligation.
➢ A vague or loose promise cannot be considered to be an offer
capable of being acceptance.
➢ Ex: A says to B, ‘I will give you something if marry C.’
This is not a valid offer by A as the thing to be given by him is
not certain or definite.
2. The terms of the offer must be certain or at least capable of
being made certain.
A offered to take a house on lease for three years at $285 per
annum, if the house was “put into through repair and
drawing room handsomely decorated according to the
present style.”
Held the offer was too vague to result in a contract
relationship.
Taylor Vs Partington 1855 (44)ER 1130
3. Offer must be communicated.
➢ It is an accepted principle that an offer, to be effective, must be
communicated to the offeree.
➢ The general rule is that, there can be no acceptance in ignorance
of offer.
➢ Ex: Where A writes a letter to B offering to sell his house for
rupees one lakh, but never posts this letter and keeps it in his
pocket. He is said to have made no offer which B could accept.

Lalman Shukla Vs Gouri Datta (1913)11 All L.J489

Defendant’s nephew absconded from home. He sent his servant in
search of the boy. When the servant had left, the defendant by
handbills offered to pay Rs.501 to anybody discovering the boy.
The servant came to know of this offer only where he had already
traced the missing child.
He however, brought an action to recover the reward. But his action
failed.
In order to constitute a contract, there must be an acceptance of an
offer and there can be no acceptance unless there is knowledge of
the offer.
4. Must be made with a view to obtaining the assent.
A valid offer is that it must be made by the promisor /offeror
with a view to obtaining the assent of the offeree, to the act
or abstinence, constituting the offer.
It implies that a mere statement of intention made in the course
of conversation will not constitute a binding promise even
though acted upon by the party in whim it was made.

5. Offer should not contain a term the non compliance of

which may be assumed to amount to acceptance.
6. A statement of price is not an offer
A statement of fact made merely to supply information cannot be
treated as an offer resulting into an agreement though accepted.
Harvey Vs Facey 1893 AC552
A leading authority on the point. A telegraphed to B “will you sell us
Bumper Hall pen? Telegraph lowest price.
B replied by telegraph “Lowest price for Bumper Hall Pen 900
pounds”
A telegraphed “ we agree to buy Bumper Hall Pen for 900 pounds
asked by you”
Holding that there was no contract between the parties. The judicial
committee of the Privy Council explained that the first telegram of
A had asked two questions, i.e., 1) as to the willingness of B to sell
the land and 2) as to the lowest price and that the telegraph was
addressed to the second question only. B, in stating the lowest price
for the land, was not making an offer, but was merely supplying
information. The third telegraph set out above was in fat, an offer
by A .
Invitation to offer
 Invitation to offer
➢ An offer should be distinguished from an invitation to receive
offers.
 An invitation to offer is an action inviting other parties to make
an offer to form a contract.
➢ Ex: When a man advertises that he has got a stock of books to
sell, or houses to let, there is no offer to be bound by any
contract. Such advertisements are offers to negotiate, offers to
receive offers.
➢ Where a party, without expressing his final willingness, proposes
certain terms on which he is willing to negotiate, he does not
make an offer, but only invited the other party to make an offer
on those terms.
Harvey Vs Facey 1893 AC552 case, Privy council has
explained the distinction between offer and invitation to offer.

❑ Quotations, Catalogue etc.,

❑ Auction cases

❑ Tender cases

❑ Railway cases

❑ Self service shops are the examples of Invitation to offer.

 Adikanda Biswal V Bhubaneshwar Development
authority, AIR2006 Ori36
A Development Authority made an announcement for making an
allotment of plots on first come first served basis on payment of
full consideration. An application in response to this made with
full consideration was held to be an offer and, therefore, there
could be no concluded contract till the offer was accepted.

Harries V Nickerson (1872)LR8QB286

➢ A banker’s catalogue of charges is also not an offer.
➢ A railway time table is in the same category.
➢ An auctioneer’s announcement that specific goods will be sold
by auction on a certain day is not an offer hold the auction and he
will not be liable to persons travelling up to the place if he
changes his mind and does not hold the auction.
 Pharmaceutical Society of Great Britain V Boots Cash Chemists
(southern) Ltd. (1953)1 QB401
Court held that “it would be wrong to say that the shopkeeper is making an
offer to sell every article in the shop to any person who might come in
and that person can insist on buying any article by saying “I accept
your offer”.
In most book shops customers are invited to go in and pick up books and
look at them even if they do not actually buy them. There is no
contract by the shopkeeper to sell until the customer has taken the
book to the shopkeeper or his assistant and said: “I want to buy this
book” and the shopkeeper says “Yes”.
That would not prevent the shopkeeper, seeing the book picked up. Saying
“I am sorry I cannot let you have that book, it is the only copy I have
got and I have already promised it to another customer”.
Mere fact that a customer picks up a bottle of medicine from the shelves in
this case does not amount to an acceptance of an offer to sell. It is an
offer by the customer to buy, and there is no sale effected until the
buyer’s offer to buy is accepted by the acceptance of the price.
Kinds of Offer
➢ Express offer
➢ Implied offer
➢ Specific offer
➢ General offer
Carlill Vs Carbolic Smoke Ball Co
(1893) 1 QB 256
➢ Cross offer
Tinn Vs Hoff Mann (1873) 291LT
➢ Counter offer
Hyde Vs Wrench (1840) 3 Beav 334
➢ Standing offer
Express offer: is an offer made by words, oral or written.
Ex: A says to B, sitting across a table, “I offer to sell my watch
for Rs1000”, or
➢ A writes a letter to B, offering to sell his watch for Rs.1000,
the offer made by A is an express offer.
Implied offer: An offer which is inferred from the
circumstances or the conduct of the parties is known as an
implied offer.
Ex:A transport company runs buses on a particular route. The
company is said to make implied offer to carry intending
passengers over the route at scheduled fares. A passengers
who boards the bus undertakes to pay the fare to his
destination even though he makes no express promise to do
so.
Implied offer:
A fire broke out in the defendant’s farm. He believed that he
was entitled to the free services of Upton Fire Brigade and,
therefore, summoned it. The Brigade put out the fire. It then
turned out that the defendant’s farm was not within the free
service zone of the Upton, which, therefore, claimed
compensation for the services.
Court held that: The truth of the matter is that the defendant
wanted the services of Upton, he asked for the services of
Upton and Upton, in response to that request, provided the
services . Hence the services were rendered on an implied
promise to pay for them.
Upton Rural District Council V Powell (1942)1All E.R.220
Specific offer: is an offer addressed to one or more specific
persons. It is made to
 an ascertained person or
 to a class or group of persons.
An offer made to a person or to a set of persons can be accepted
only by that person or persons. None else can accept the offer.
General Offer: is an offer addressed to the public at large and
not to any particular individual.
The most common example of general offer is found is offers of
reward made by public advertisements for the procuring of
some information, the restoration of lost article and the like.
General Offer:
The defendants advertised their product “ Carbolic Smoke Ball”, a
preventive remedy against influenza. In the advertisement they
offered to pay a sum of 100 pounds as reward to anyone who
contacted influenza, cold or any disease caused by taking cod, after
having used the Smoke Ball three times a day for two weeks, in
accordance with the printed directions. They also stated that a sum
of 1000 pounds had been deposited with the Alliance Bank, to
show their sincerity in the matter. The plaintiff, relying on the
advertisement, purchased a Smoke Ball from a chemist, used the
same in accordance with the directions of the defendants, but still
caught influenza. She sued the defendants to claim the reward of
100 pounds advertised by them. It was held that this being a
general offer addressed to all the world had ripened into a contract
with the plaintiff by her act of performance of the required
conditions and thus accepting the offer. She was therefore, entitled
to claim the reward .
Carlill V Carbolic Smoke Ball Co,(1893)1 QB256
Cross Offer: Simultaneous offers, each being made in ignorance
of the other.
A wrote to B indicating his willingness to sell 800 tons of iron
at 69pounds per ton. On the same day, B also wrote to A
offering to buy 800 tons of iron at the same rate of 69 pounds
per ton. The two letters crossed each other in post. B brought
an action against A for the supply of iron contending that a
valid contract had been created between the two parties.
Rejecting the contention, it was held that there were only two
cross offer and the offer of neither of the parties having been
accepted by the other, there was no contract which could be
enforced.
Tinn V Hoffmann (1873)291 T271
Counter Offer: It is a varied or conditional acceptance of the
offer.
Case: An offer was made by A to B for the sale of a farm for
1000 pounds. B rejected this offer and said that he will pay
only 950 pounds to which A did not agree. Thereupon, B said
that he was willing to pay 1000 pounds to which also A did
not agree. B sued A and contended that there was a contract
by which A was bound. It was held that B had once rejected
A’s offer by his counter offer to pay 950 pounds and this made
the original offer to lapse, and therefore, no contract had
resulted in this case.
Hyde V Wrench (1840)3 Beav.334
Standing Offer or Open offer : is an offer allowed to remain
open for acceptance for a definite period of time or until the
occurrence of some specified event.
Ex: An offer to supply 1000 bags of wheat during 1 St January to
31st December, in accordance with the orders which may be
placed from time to time.