Business Law

Offer and acceptance

Week # 3
Lecture no.5 & 6
Ms. Ayesha Zaman Khan
Overview
 Offer
 Types of Offer
 Essentials of a valid offer
 Modes of Cancellation of proposal
 Acceptance
 Essentials of acceptance
 Revocation
Offer
 Proposal is the starting point of a contract.
When one wants to enter into a contract, he
makes someone proposal to another. The
proposal and offer are the same in the meaning
of law and has been defined under section 2(a)
of The Contract Act 1872 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.”
The definition of Proposal reveals the
following three points:
 1) It is an expression of willingness to do or
not to do something.
 2) The Proposal is always made by one

person to another person. It means there are

at least two parties in a proposal.
 3) The proposal is always made to obtain the

consent of the person to whom it is made.

 Example: A offers to sell his horse to B for Rs.

30,000. It is a proposal made by A to B and B

has a right to accept or reject the proposal.
Types of Offer
 The proposal or offer may be classified into
the following two types:
 1). Expressed proposal 2). Implied proposal
 Expressed offer
 When the proposal is made clear in words

spoken or written, it is called an expressed

proposal or expressed offer.
 Illustration: A states by spoken words to B

that he wants to sell his bicycle for Rs.8000.

It will be an expressed offer.
Con..
 Expressed offer is further divided into two
classes:
 (a) Specific Offer (b) General Offer
 2).Implied Offer
 When the proposal is not made in words

spoken or written but is conveyed by the

conduct or behavior of the proposer
(offerer),it is called an implied offer.
 It can further be divided into two classes
 (a) Specific Offer (b) General Offer
Illustration
 It is an implied as well as specific offer from
the owner of a bus going from Multan to
Bahawalpur that they are willing to carry only
those persons who want to go to Bahawalpur
and purchase the ticket of the bus.
Rules or Essentials of a valid offer
 Clear in terms (Taylor vs Portington 1855)
 Lawful object
 Message of proposal (Unread Conditions)
 Intention of Proposer
 Legal Relationship( Balfour vs Balfour 1919)
 Mode of proposal
 Possibility of acceptance
 Nature of offer ( Declaration of Intention)
 Communication of proposal
Cont..
 Proposal distinguished from invitation
 Silence of offeree is not acceptance
 Revocation of proposal possible
Modes of Cancellation of Proposal
 According to Section 6 of The Contract Act,
The proposal may come to an end by the
following ways:
 By Notice
 By the Lapse of stipulated time
 By the Lapse of Reasonable Time
 By the failure of the accepter to meet

condition
 By the Death or Insanity of the Proposer
Cont..
 Rejection by Offeree
 By destruction of subject matter
 When proposal becomes illegal
 By crossed offer
Acceptance
 According to The Contract Act , “ When the
person to whom proposal is made signifies
his assent thereto, the proposal is said to be
accepted . A proposal when accepted
becomes a promise.”
 From the above definition we find that

acceptance of proposal means the assent of

the proposee in the same sense as required
by the proposer in the offer.
Legal Rules/Essentials of a valid
Acceptance
 The following are the legal rules ( essentials) of a
valid acceptance :
 Acceptance must be by the offeree
 Acceptance must be absolute and
unqualified/unconditional.
 Acceptance must be in prescribed manner
 Acceptance must be communicated to the offerer
Cont..

 Acceptance must be given within a

reasonable time
 Acceptance may be expressed or implied
 Acceptance must follow the offer
Revocation of Acceptance
 According to the section of the contract Act,
an acceptance may be revoked at any time
before its communication is complete as
against the acceptor and not afterwards.
 Communication of Revocation of Acceptance
 (a) As against the Acceptor
 (b) As against the Proposer