Offer / Proposal: Definition,

Communication, Revocation, General/

Specific Offer

Prepared by: Shraddha Singh

Asst. Professor
Prepared for: B.A LL.B (1st Semester)
 PROPOSAL / OFFER

► A proposal and its acceptance is the universally acknowledged process for the making of
an agreement.
► Sec. 2(a) defines “proposal” as follows: “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.”
► In the view of the above definition, a proposal has two essential parts:
1. Expression of the offeror’s willingness to do or to abstain from doing something.
2. Proposal is made with a view to obtaining the asset of the offeree to the proposed act or
abstinence.
 ESSENTIALS OF A VALID OFFER

Two Persons
► 2 competent persons

Signifies Lalman Shukla v. Gauri Dutt

OFFER

Willingness Harvey v. Facey

 TYPES of OFFERS

• Meaning: Offer made to a particular offer

Particular or specific • Implication: only that person can accept, no body else can
accept.
• Meaning: offer made to public at large
• Implication: Anyone who comes forward and performs the conditions
General or Public can accept it.
• Carlill v. Carbolic Smoke ball Co.

• Meaning: offer against offer.

Counter offer • Implication: counter offer destroys the original offer.

• Meaning: Both offers cross each other.

Cross offer • Implication: As there are only offers from both sides, so there is no contract.
• Tinn v. Hoffman

• Meaning: Offer continues for a period of time within which it

Standing or Continuing can be accepted.
Offer • Implication: Offer can be revoked until it is accepted
 COMMUNICATION OF PROPOSAL

Section 3 recognises the modes of communication and Section 4 prescribes as to when

communication is complete.
Section 3. Communication, acceptance and revocation of proposals.—The communication
of proposals, the acceptance of proposals, and the revocation of proposals and acceptances,
respectively, are deemed to be made by any act or omission of the party proposing, accepting
or revoking by which he intends to communicate such proposal, acceptance or revocation, or
which has the effect of communicating it.
Communication can be of three things:
1. Proposal
2. Acceptance of proposal
3. Revocation of the proposal or acceptance
 ACCEPTANCE

► Section 2(b) states that: “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.”
► A proposal, when accepted, results in an agreement.
► The person making the proposal does not become bound thereby until its acceptance. As soon as
his proposal is accepted that is known as promise, whereby both the parties become bound.
“Acceptance is to an offer what a lighted match is to a train of gun-powder.”
ESSENTIALS OF A VALID ACCEPTANCE
1. Only that person can accept to whom the offer is made.
2. Acceptance must be given to that offer only.
Mirror rule
3. Acceptor and offeror must be competent.
4. Communication of the acceptance.
The acceptance must be communicated by the offeree or his authorised agent.
Powell v. Lee

Acceptance must be communicated to the offeror or any person duly authorised by him for this purpose.
Felthouse v. Bindley

Mental acceptance is not sufficient to create a valid contract.

Brogden v. Metropolitian Railway Co.

Acceptance may be express or Implied.

5. Acceptance must be absolute and unqualified.
6. Acceptance must be given in accordance with manner prescribed by the offeror.
Eliason v. Hens Law
 PLACE AND TIME OF CONCLUSION OF
CONTRACT

SECTION 4. Communication when complete.—The communication of a proposal is

complete when it comes to the knowledge of the person to whom it is made.
The communication of an acceptance is complete,—
as against the proposer, when it is put in a course of transmission to him, so
as to be out of the power of the acceptor;
as against the acceptor, when it comes to the knowledge of the proposer.
The communication of a revocation is complete,—
as against the person who makes it, when it is put into a course of
transmission to the person to whom it is made, so as to be out of the power
of the person who makes it;
as against the person to whom it is made, when it comes to his knowledge.
A B Rule:
A B
OFFEROR ACCEPTOR

At Allahabad At Bombay
Communication of acceptance is complete:
Against A in B (Bombay)
Against B in A (Allahabad)

► Instantaneous Communication: Contract is concluded at the place of offeror. [parties inter

presents]
► Face to face
► Via. electronic means
► Via. Telephone
► Postal Communication: Place of acceptor is the place of contract. It is called “Postal Rule”.
[Parties inter absentes]
 REVOCATION
SECTION 5: Revocation of proposals and acceptances.—
o “A proposal may be revoked at any time before the communication of its
acceptance is complete as against the proposer, but not afterwards.
o An acceptance may be revoked at any time before the communication of the
acceptance is complete as against the acceptor, but not afterwards.”

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After acceptance is given, there can be no revocation of offer as after acceptance it
becomes promise.
Revocation of acceptance is effective in two situations:-
1. Reaches before acceptance.
2. Reaches simultaneously.
After the offer has been accepted it becomes a promise and if other conditions are satisfied it
becomes a valid contract, and now there can be no revocation of acceptance as it becomes
binding on both the parties.

Difference between English and Indian Law:

According to English Law, there can be no revocation of acceptance once offer has been
accepted.
In India, Acceptance is revocable. An acceptor may cancel his acceptance by a speedier
mode of communication.
 SECTION 6. Revocation how made.—
A proposal is revoked—
(1) by the communication of notice of revocation by the proposer to the other party;
English Law v. Indian law on who can send the notice; Dickinson v. Dodds
(1) by the lapse of the time prescribed in such proposal for its acceptance, or, if no time is so
prescribed, by the lapse of a reasonable time, without communication of the acceptance;
(2) by the failure of the acceptor to fulfil a condition precedent to acceptance; or
(3) by the death or insanity of the proposer, if the fact of his death or insanity comes to the
knowledge of the acceptor before acceptance.

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