OFFER AND

ACCEPTANCE
 NEWS
Acceptance Of A Conditional Offer With A
Further Condition Does Not Result In A
Concluded Contract: Supreme Court

When the acceptor puts in a new condition while accepting

the contract already signed by the proposer, the contract is
not complete until the proposer
 Learning Outcomes
• Cognize the legalities involved in creation
of a valid offer and acceptance
• Categorizing and Illustrating how offer and
acceptance can communicate and how it
can be revoked.
 MEANING OF OFFER

Acc. To section 2(a)

“ when one person signifies to another his willingness to do

anything, with a view to obtaining assent of that other to
such act, he is said to make a proposal(offer)”
For instance;

A, with a view to obtain assent of B, says to him, “will you

purchase my motorcycle for Rs.10000”

In this case, A is making an offer to B

And A is doing so with a view to obtain B’s assent to

purchase motorcycle.
 Invitation to offer

To the public to make an offer to buy the goods at

the marked the prices.

Example:
Display of goods by a shopkeeper in his window, with
prices marked on them, is not an offer but merely an
invitation to offer.
 Types Of Offer

• General & specific offer

• Express & implied offer
• Positive &negative offer
• Cross offer
• Counter Offer
General & Specific Offer
• General offer made • Specific offer made
to the whole world at to some specific
large person
• General offer can be • Specific offer can be
accepted by any accepted only by
person having notice person to whom it
of the offer by doing was made
what is required
under the offer
 I want reward

Carbolic smoke ball

Company advertisement

Carlill vs Carbolic smoke ball company,(1983)IQB256

 Decided Case :
• Carbolic smoke ball company advertised in the newspaper
that whosever would take smoke balls ,manufactured by
it ,according to the printed instructions would not contract
influenza. The company offered a reward of $100 to
anyone who contracted influenza after taking its smoke
balls according to the printed instructions .It was added that
$1000 was deposited with alliance bank to show the
sincerity of the company. one Mrs.Carlill used the smoke
balls according to the directions given but contracted
influenza. It was held that the offer was general one ,and
Mrs.Carlill had accepted it by acting according to the
advertisement and therefore the company could not get
away from responsibility by saying that it was a mere puff.
She was entitled to get reward.
 Harbhajan lal vs. Harcharan lal
• In this case a young boy had run away from his
father’s house. the father issued a pamphlet
stating ,anybody who finds trace the boy and
bring him home will get Rs500.Harbajan Lal who
knew of the reward, found out the boy at a
Railway station Dharamshala ,and took to the
police station. It was held that the handbill was a
general offer and therefore he was entitled to the
reward. I HAVE
FOUND THE
BOY

Shweta Verma, Research Scholar 12

Express offer
When an offer is
expressed by words
spoken or written it is
termed as an express
offer.
Implied offer
Implied offer means
an offer made by
conduct.

When one person

allows the other to
perform certain acts.
For instance,
A bid at an auction is an implied offer to buy.
Similarly consuming eatables at a self
service restaurant, both create implied
promise to pay for the benefits enjoyed.
 Positive & Negative Offer

• A person may express his willingness to

do something or to abstain from doing
something e.g it may be an offer to
construct a wall to provide privacy or not to
construct a wall so that free passage of
light and air may not be obstructed.
Cross Offer
 Cross Offer

• Two offer similar in all respects, made by

one party to the other ,in ignorance of
each other’s offer, are termed as cross
offers. they shall not constitute acceptance
of one’s offer by the other.
 Example : Cross Offer
TINN v/s HOFFMANN
A offers by a letter to sell his car to B for Rs 15000. B
at the same time offers by a letter to buy A’s car for
Rs 15000. The two letters cross each other in the
post.
Is there a contract between A and B?

No cross offer do not form any contract.

Counter Offer
When a person makes a
counteroffer, he or she is
rejecting the previous
offer and rendering it
void. Because the original
offer is now void, the
person who made that
offer is no longer legally
responsible for honoring
it.
 Example -

Let's say you are selling a vehicle. A

buyer arrives and offers you $10,000 for
the car. In an attempt to get a higher price,
you counteroffer, asking for $11,000. If the
buyer declines, you cannot force them to
buy the car at $10,000, even though they
have already offered at that price.
 Legal rules : Valid offer
1. An offer may be express or implied

2. It should give rise to legal consequences and be capable

of creating legal relations

3. The term of the offer must be certain, definite and not

loose or vague

4. An offer may be distinguished from:

- a declaration of intention and an announcement
- an invitation to make an offer or do business
5. Offer must be communicated.

6. Offer must be made with a view to obtaining the assent.

7. An offer should not contain a term the non compliance of which

would amount to acceptance.

8. Two identical cross offers do not make a contract.

9. A statement of price is not an offer.

10. The objective of offer should be legal one.

11. It must be made to another person.

Example –
A sees an article marked ‘price rupees
twenty’ in B’s shop. He offers B Rs20 for
the article. B refuses to sell saying the
article is not for sale.

Can A force B to sell the article at Rs.20?

• Held A cannot force B to sell him the
article at Rs20. Marking of price of an
article amounts to an invitation to offer and
not an offer .
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.”

Types:
(i) Express Acceptance
(ii) Implied Acceptance
e.g. Highest bid, niece staying at aunt’s house
 Legal Rules : Acceptance

(i) It must be absolute.

(ii) It must be communicated by the acceptor to the offeror.
(iii) It must be given only by the person to whom the offer
is made.
(iv) It must be according to the mode prescribed or usual
and reasonable mode.
(v) It must be given within a reasonable time.
(vi) Acceptance must succeed the offer.
(vii)It must be given before the offer lapses and /or
revoked.
(viii)It cannot be implied from the silence.
 Case:

Mr. C and Mr.D signed an agreement for the purchase

of a house by Mr. D “subject to a proper contract” to be
prepared by C’s lawyer.
A document was prepared by the C’s lawyer and
approved by D’s lawyer but D refused to sign the
document.
Is the contract made?
 Communication of offer and acceptance

Communication of offer(sec 4):

The communication of the offer complete when it comes
to the knowledge of the person to whom it is made.

Question:
A sends a proposal in the mail to B and the mail is lost.
Is the offer communicated and complete?
Communication of acceptance (sec 4):

Communication of acceptance is complete :

- As against the proposer when it is put in course of

transmission to him so as to be out of the power of the
acceptor to withdraw same.

- As against the acceptor when it comes to the

knowledge of the proposer i.e., when letter of
acceptance is received by the proposer.
Communication of revocation (sec 4):

Communication of revocation is complete :

- As against the person who makes it, when it is put in

the 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.
 Examples

(i) A sends a letter to B to sell his house for

Rs.50,000. The letter is posted on July 10
and reaches B on July 12.
(ii) B posts acceptance on July 13 and letter
reaches A on July 15…
(iii) Letter to sell house is sent on May 15. It
reaches B on May 19. On May 18, A revokes
his letter which reaches B on May 20.
 When does an offer comes to an end?
Modes of revocation:
(i) By communication of notice of revocation by the
offeror at any time before its acceptance is
complete against him.

(ii) By lapse of time if it is not accepted within the

prescribed time.

(iii) By non-fulfillment by the offeree of a condition

precedent to acceptance.
(iv) An offer lapses by the death or the insanity
of the offeror or the offeree before
acceptance

(v) If a counter offer is made.

(vi)An offer lapses by not being accepted in the

mode prescribed.

(vii) An offer lapses by rejection.

 Example
• A proposes by a letter sent by post to sell his
laptop to B. the letter is posted on the 1st of the
month. B accept the proposal by a letter sent by
post on the 4th. The letter reaches A on 6th
• A may revoke his offer at any time before B post
his letter of acceptance i.e 4th but not
afterwards.
• B may revoke his acceptance at any time before
the letter of acceptance reaches A i.e 6th but not
afterwards
 MCQ’s
• Under Sec 2(b) if the person to whom the
proposal is made signifies his assent the
proposal is said to be
a) Accepted
b) Agreed
c) Conditionally agreed
d) None of the above
 MCQ’s
A revokes his proposal to B by telegram.
The revocation is complete as against A
a) When the telegram is dispatched
b) When B received the telegram
c) When B confirms
d) When A receives confirmation from B
 MCQ’s
• An offer can be revoked by
a) A notice
b) Death
c) Counter offer
d) All of the above
 MCQ’s
• Communication of revocation against the
offeror will be complete when
a) Such revocation transmitted by the
offeror
b) When offeree receive such revocation
c) When offeree comes to the knowledge of
the revocation
d) None of the above