OFFER AND ACCEPTANCE ea depends on the facts of the case. See the Case of Ramsgate Victoria Hotel Co. v. Montefiore (Page 30). 9. When acceptance is complete : Section 4 of the Contract Act lays down that 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; and as against the acceptor, when it comes to the knowledge of the proposer. : « Examples : (i) A proposes, by letter, to sell a hou: The communication of the proposal is complet receives the letter. fi (ii) B accepts ‘A's proposal .by a letter sent by post. The communication of the acceptance is complete—as against A, when tlie letter is posted, as against B, when the letter is teceived by A. ; : a _.- 10. Before Offer : Acceptance must be given before the offer. This ~ is the natural sequence. There cannot be acceptance before the offer is given from any person: See the case of Lalman v: Gauri Dutt. (Page 22) a in force, i.e., _ LL. The acceptance must be made while the offer is before the offer has been revoked or the offer has lapsed. How an offer is revoked is described below. (See page 30). COMMUNICATION OF OFFER AND ACCEPTANCE . Section 3 of the Contract Act states. as. follows. : The communication of proposals, the acceptance of proposals and the revocation of proposals and acceptance, 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. se to B at a certain price. E e when B How is an Offer to be Communicated? ‘An offer may be communicated to the offeree or offerees by word of mouth, by writing or by conduct. A written offer may be contained in , a-letter or a telegram. A circular or advertisement or a notice may be written in'such a language that it amounts to an offer. A tramway car and ‘|-a bus going along.a street and picking up passengers are examples of . offers by conduct. if - Section 4 states : “The communication of a proposal is complete, when it comes to the knowledge of the person to whom it is made.” How is an acceptance to be Communicated?. (See p. 24) Scanned with CamScannerLAW OF CONTRACT Offer and Acceptance by Post An offer may be made by post. An offer muy giso be acoogend By Post, if there is no other mode of acceptance specially presomibed By the proposer. When a propose! is made through the past She past offi= is by implication the agent of the proposer. Therefore 2 leaner of acceptance duly addressed and posted is sufficient acorptance even though the letter does not actually reach the proposer. (Notice to an agent.is considered to be notice to the principal). The lener mast, however, be correctly addressed. The letter must be actunlly posed. is not enough to give it to somebody to post. See example @) ia nee 9p. 27. Examples : () G applied for shares in 2 company. A letter of ailomaent ws «Posted but the letter did not reach G. Held there was 2 Hindiag, contract and G was 2 shareholder of the compeny. Household Fire Insurance Co v. Grant? (i) A registered envelope was tendered by the postman to the addressee, who refused to accept it. It is to be presumed that the addressee has the knowledge of the comtent thereof, Har Charen Singh v. Shiv Resi and Oskers? Offer and Acceptance through Telephone Offer and acceptance can be communicated through the tieshone. But there are certain mules regarding oral communication. lt has been held that the offer and acceptance must be andiile, Rear? and understood. It these conditions are satisfied end the other essential elements of contract exist, the parties are bound thrdugh 2 telephone coaversation. The High Court Judgment about this matter is quoted below. “Now, when the parties negotiate @ contract orally in the presence of each other or over telephone and one of them makes an otal offer to the other, itis plain that an oral acbeptance is expected and the ac ust ensure that his acceptance is audible, beard and understood by the ee T -Scveptance Th such 2 case must be by such wonds which have th p effect of communicating it.” Kanhaiwal v. Dinesinoar CrangraS Ta.an Enalish court it was held that a communication, cent s eles oc teleprinter machine inthe fice, is valid. A contre ee X-WAS NO excepti by ception to the general rule that acceptance ig pot SSS Scanned with CamScanner' OFFER AND ACCEPTANCE 2 complete until communicated. Entores’Ltd. v. Miles Far Eastern Corporation.' ficrophone : There was an auction sale of plots of land. ‘The terms, including certain restrictive conditions, were announced by a microphone. The Supreme Court held, “Microphones have not yet acquired notoriety as carriers of binding representations. Promises held out over loudspeakers are often Claptraps of politics.” Banwari Lal’. ‘Sukhdarshan Dayal.? . OPTIONS An option is a conditional contract to do something. Suppose that P the owner of a house, agrees in consideration ‘of Rs. 200, to give Q an option to buy the house within six months at @ certain price. This is acontract binding upon P to allow Q to purchase the house at the agreed price at any time within six months. A promise to keep an offer open to acceptance for a certain time is not binding on the proposer unless there is a'consideration separately given for that promise, as in the example given above. x 2 A i STANDING CONTRACT AND OPEN PROPOSALS * ” Contracts for the supply-of goods over a period of time are times so’ worded that the buyer has an option as regards the quantity to be purchased and the time of purchase. Such contracts are called. “Standing Contracts” or “Open Proposals”: * some Examples : i : P signed a tender addressed to the London County, Council, agreeing, on acceptance, to supply all the goods specified in the schedule, to the extent ordered. The tender was accepted but the L. C. C. did not order any. goods. Heid, the L. C. C. was not bound to,order any goods, but if it did so,. P.was bound y to deliver, the goods as and when ordered. Percival Ltd. v. “i « LOG?F 5: iat In such cases as above, a contract comes into existence when definite quantity, is ordered. Bengal Coal Co. v. Wadia.* ~ 2. (1973) ISCC 2941 (Supreme, Court) 4. (1900) 24 Bom 97 7 . (1955) 2 QB. 327. | 3. (1918) 87 L. J. K. B. 677 Scanned with CamScanner ~Revocation of an Offer. When does an Offer Lapse? An offer ‘comes to an end and is no longer open to acceptance i aj the following circumstances.— Sec 6. ve Under: 1. By notice If the offeror gives notice of revocation to the other Party, ie. expressly withdraws the offer and the offer comes to an end. An offer may be revoked any time before acceptance but not afterwards. Ona. an offer is accepted there is a binding contract. The acceptance of an. offer becomes binding on the offeror as soon as the acceptance is in course of communication to the offeror so as to-be out of the poy of the acceptor.|But any time before this happens the“offer may revoked. A proposal is:sent by X to Y and is accepted by Y by letter. The Proposal might have'been revoked ‘any time before the letter of acceptance was posted but it cannot be revoked‘after the letter is posted, The notice of revocation does not take effect until it-comes within the knowledge of the offeree. 7 | ae : 2. By lapse of time When the proposer prescribes a time:within which the proposal: must be accepted, the proposal lapses as soon as the time expires. . . After expiry of reasonable time. i If no time has been prescribed, the Proposal lapses after the expity of a reasonable time. What i circumstances of the case, § reasonable time will depend on the © 4 3 Scanned with CamScannerOFFER AND ACCEPTANCE pn. 4. By failure of a condition precedent . An offer lapses by the failure of the acceptor 10 fulfil a eh precedent to acceptance, where such a condition has been prescribe? aor Delhi to you for Rs. 50,000 P says to Q, “I will sell my house at : : Gf you are married.” The offer cannot be accepted until and unless Q is married. 5, By death or insanity An offer lapses by the death or insanity of the of his death or insanity comes to the knowledge of the acceptor proposer, if the fact’ *.|- before. *, acceptance. 6. Counter Offer When a counter offer is given, the original offer lapse. See the Case b of Hyde v. Wrench. (Page 24) 7. By refusal A proposal once refused is-dead and cannot be revived -by its eg 5 subsequent acceptance. ae ee Example : ‘ : A offers to sell his farm’ to B for Rs. 1,000. B replies offering” ~ to pay Rs..950. A refuses. Subsequently B writes accepting the original offer. There is.no contract because the original offer has lapsed. Revocation of Acceptance Section 5 of the Contract Act provides that an acceptance cn be revoked any time before the acceptance comes to the knowledge of the proposer but not afterwards. : VEO AAS Example : a aie P proposes, by a letter sent by. post, to sell-his house to’ Q. Q accepts the proposal:by a letter sent by post. @.may revoke his acceptance any time before the letter communicating it reaches P but not afterwards. Be eS The English law on this point is different. Under English law an acceptance is irrevocable once it is put-in Course, of communication to ow pea IPs i Scanned with CamScanner2 _* | Law'oF CONTRACT “ the offeror. Thus in the above exaitiple Q could not have Tevoked acceptance once he had posted the letter of acceptance, , Communication of Revocation 7 ? a : According to-Section 3 of.the Act, the revocation of a proposal gy: an acceptance is déemed to be made by any act or omission of the p by which he intends to communicate.such revocation, or which has the effect of communicating it. ae 4 ‘According to Section 4 of the..Act, the communication of revocation is complete— eee : as against the’person who makes it, wher 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; : : + oem as against the person to whom it is made,..when it comes to his knowledge. a 8 Examples?“ (i) P makes a proposal to Q. Q sends‘a letter. of acceptance. Subsequently Q revokes his acceptance by telegram. Q's revocation is complete, as against Q when the telegrani is _ despatched and as against P when it reaches him. q (ii) A. revokes his Proposal by telegram. The revocation is ‘complete as against A when the telegram is despatched. It is " complete as against B when B receives it. B revokes his. _ acceptance by telegram. 'B’s Tevocation is Complete as ‘against vBswhen the telegram is ‘despatch i hen : reaches. him. : ee es andeatiegsingt A = EXERCISES 1.) When ic an affar nani. en Scanned with CamScanner