Q1. Define offer and acceptance and when an offer and acceptance is deemed to complete?

Or Define proposal and distinguish between proposal and invitation to proposal.

Ans. :
Offer : It is explained by section 2 (a) ICA which states that one person signifies to another person ,his willingness to do or to abstain from doing
with a view to obtain assent of that other person to such act or abstinence, he is said to make a proposal. For example, Micky shows willingness to
Ticky that Micky is interested in selling his car for Rs. 50000/- to him. If Ticky accepts to purchase the car, the act of Micky amounts to proposal for
sale of car.
Chintu says to Pintu that you buy my house for Rs. 50000/- with a view to obtain Pintu’s assent to purchase the house. Chintu is said to have made
proposal to Pintu. The term proposal is equivalent to term offer in English. If a statement is made without any intention to obtain assent of other party
thereto, that cannot be termed as proposal.

Difference between proposal and invitation for a proposal:

A proposal or an offer is distinguished from invitation for a proposal. Some time the person may not offer to sell his goods but make some statement
or provide information with a view to invite others to make an offer on that view. For example, a book seller sends a catalogues indicating various
prices of books to a person. This catalogue is not an offer to sell the books but is an invitation to offer. If any person is interested in purchasing any
book may offer to buy. The bookseller may or may not accept the offer of buyer. If the offer to buy the books by the buyer is accepted by bookseller,
it becomes contract. The term invitation for proposal means that one person does an act with a view to obtain offer from other person. It always
precedes the offer; or in other words it comes before valid offer can be made. An invitation for proposal is always the first stage of the valid offer.
Inviting people for auction is an example of invitation to offer. For example, inviting persons to auction of shops or plots where person are interested
in buying shops or plots & makes the bid. At the fall of hammer, their bid is accepted.
Kinds of offer:-
(1) Cross offer
(2) Specific and general offer
(3) Standing open or continuing offer.
1. Cross Offer: When offer is made by two persons to each other containing similar terms of bargain cross each other in post. The offer is known as
cross offer. For example, X offers to sell his watch to Y by post and Y also makes the same offer from the other side by post. These kinds of offers
are called cross offers.

2. Specific and General Offer: When offer is made to particular person it is known as specific and when offer is made for public in general is
known as general offer.

3. Standing, Open and Continuing Offer: A offer which is allowed to remain open for acceptance for a period of time is called standing, open or
continuing offer. For example, A offers B to sell his car from Ist January to 31 st December, 2002. B has option to accept the offer from Ist Jan to 31st
December, 2002. This is known as the standing or open offer.

Essentials of an offer-
1.Offer must be capable of being accepted and giving rise to legal relationship. A social invitation even if it is accepted does not create legal
relation. An offer must be such that it would result in valid contract when it is accepted.

2. Terms of offer must be definite, unambiguous and certain. If the terms of offer are vague or indefinite, its acceptance cannot create any
contractual situation. For e.g. Micky says to Ticky that I will sell you a car and Micky owns three different cars. The offer is not definite and
unambiguous.

3. An offer may be distinguished from an invitation to make an offer.

4. Offer must be communicated: An offer when accepted results in contract. An offer can be accepted when it comes in knowledge of offeree. In
other words, offer has to be communicated to the offeree to get his acceptance. Communication of proposal is complete when it comes to knowledge
of person to whom it is made. For example In case of Lalman Vs Gori Dutt, the defendant's nephew absconded from house. The defendant's servant
was sent to search the missing boy. After the servant went to search the boy, the defendant issued a reward of Rs. 50/- to any one who would find out
the missing boy. The servant was ignorant of this offer but successfully search the boy. When he came to know about the reward that was announced
in his absence, he brought an action for reward. It was held that since the servant was ignorant of offer, it does not amount to acceptance of offer. So,
servant is not entitled to claim the reward.

5. Offer must be made with a view to obtain assent of the other party: The offer to do or not to do something must be made to obtain the assent of
other party and not merely to disclose the intention of oneself.

6. The offer should not contain the term non-compliance of which may be assumed to acceptance. For example, a man cannot say that if the
acceptance is not communicated within a fixed time, the offer would be considered as accepted. For eg: "A" writes to "B" that I will sell my horse to
you for Rs. 5000/- and if you don't reply, I shall assume you have accepted the offer.

Define Acceptance and essentials of acceptance?

Acceptance: A proposal or offer when accepted results in an agreement. According to section 2(b) when the person to whom proposal is made
signifies his assent, the proposal is said to be accepted. A proposal when accepted becomes a promise.
Acceptance may be:-
(a) express; or
(b) implied.
It is express when it is communicated by words spoken or written. When proposed or acceptance is made otherwise than in words or writing, the
promise is said to be implied; or in other words it is implied when it is to be gathered from surrounding circumstances or from conduct of the parties.

Essentials of acceptance:-
(i) It must be absolute, it must confirm with the offer: An acceptance in order to be binding must be absolute and unqualified in respect of all
terms of offer.

(ii) It must be communicated to offeror: To conclude a contract with the parties, the acceptance must be communicated to the offeror. Mere
determination on part of offeree to accept an offer when there is no external manifestation of the intention to do so, is not sufficient for example A
offers B to marry. B does not communicate her acceptance to marry A. This is not a valid acceptance.

(iii) It must be made in the mode prescribed: If the acceptance is not according to prescribed mode, the offeror may intimate to the offeree within a
reasonable time that acceptance is not in the mode prescribed and may insist that offer must be accepted in prescribed mode only. For example, A
makes an offer to B and say if you accept the offer reply by post. But B replies by phone. It will be valid acceptance unless A informs B that
acceptance is not in accordance to the mode prescribed.

(iv) Acceptance must be given within a reasonable time: If any time limit is specified, the acceptance must be given within that time. If no time
limit is specified, it must be given within a reasonable time.
(v)It cannot precede offer. If acceptance precedes an offer, it is not valid acceptance and does not result in a contract.

(vi)It must show an intention on part of acceptor to fulfill terms of promise. If no such intention is present, the acceptance is not valid.

(viii)It must be given by party or parties to whom the offer is made.

(ix)It must be given before the offer lapses or before offer is withdrawn.

(x) The acceptance of the offer cannot be implied from silence of offeree or his failure to answer. For example, X offers his car to Y for Rs.
10000/- and if X does not get reply from Y in seven days, X will assume that Y has accepted the proposal. It is not a valid contract.

Cases:-
1. The cardinal principle of an offer and acceptance is that an offer must be absolute without giving any room of doubt. It is well settled law that the
offer and acceptance must be based on three components—
(a) Certainty,
(b) commitment and
(c) communication.
If any one of three components is lacking either in the offer or in the acceptance there cannot be a valid contract; Kilburn Engineering Ltd. V. Oil
and Natural Gas Corporation Ltd. AIR 2000 Bom 405.

2. An acceptance with a variation is no acceptance; it is simply a counter proposal which must be accepted by the original promisor before a contract
is made; Haji Mohd. Haji Jiva V. E. Spinner, (1900) 24 Bom 510.

What is contract? What are essentials of contract?

According to section 2(h) of the ICA 1872, contract is defined as an agreement which is enforceable by law. A contract is an agreement, the object of
which is to create a legal obligation. Contracts essentially consist of two elements:
1. An agreement
2. Its enforceability by law
Agreement: An agreement is defined as every promise and every set of promises forming consideration for each other. A promise is defined as when
the person to whom the proposal is made signifies his assent there to, the proposal is said to be accepted. A proposal when accepted becomes a
promise or in other words, promise means an accepted proposal. This promise from the two parties to one another is known as an agreement.

An agreement to become a contract, must give rise to legal obligation or duty. The term obligation means a legal tie which imposes upon a definite
person the necessity of doing or abstaining from doing, a definite act. An agreement may relate to social or legal matters. An agreement which gives
rise to social obligation is not a contract. It must give rise to legal obligation to become a contract. For Example, A agrees to sell his car to B for Rs.
10,000/-, the agreement gives rise to an obligation on part of A to deliver the car to B whereas B under legal obligation has to pay Rs. 10,000/- to A .
This agreement is a contract.

ESSENTIALS OF VALID CONTRACT : ACC to Sec 10 of Indian Contract Act 1872, All agreements are contracts if they are made by free
consent of parties, competent to contract for a lawful consideration and with a law full object and are not expressly declared to the void. In order to
become a contract, an agreement must have following essential elements:

1. Offer and Acceptance: There must be 2 parties to an agreement i.e. one party making the offer and acceptance by the other party. The terms of
the offer must be definite and clear and the acceptance of offer must be absolute and unconditional. The acceptance must also according to the mode
prescribed and must be communicated to the offeror.

2. Intention to create a legal relationship: When two parties enter into an agreement, their intention must be to create a legal relationship between
them. If there is no intention to create legal relationship, there is no contract between them. An agreement which gives rise to social obligation is not
a contract eg A invites B to a dinner party and B accepts invitation, it is a social agreement. A social agreement is not an enforceable in the court of
law. So, it can be rightly said that every contract is an agreement but every agreement is not contract.

3. Lawful Consideration: An agreement to be enforceable by law or a valid contract must be supported by lawful consideration. The term
consideration means something in return of a promise. A valid contract must be supported by lawful consideration. An agreement, which is not
supported by lawful consideration, is not a contract at all. Consideration need not to be necessarily in cash or kind.

4. Capacity to contract: The parties to the contract must be competent for entering into a valid contract. Every person is competent to contract if, he
is of the age of majority, is of sound mind and is not disqualified from contracting by any law to which he is subject. Minors, lunatics or persons of
unsound mind are parties in competent to contract; or in other words contract with minor, lunatic, or persons of unsound mind is void ab-inito.

5. Free and Genuine Consent: A valid contract must be supported by free and genuine consent to the parties of agreement. The consent of parties
are said to be free if it is not caused by coercion, under influence, fraud, misrepresentation etc.

6. Lawful Object: The object of agreement or valid contract is lawful or in other words object must not be (1) Illegal (2) Immoral (3) Opposed its
public policy.

7. Agreements not declared voids: The agreement must not have been expressly declared void by any law enforced in the country. For example,
Restraint of trade etc.

8. Certainly and possibility of performance: The agreement must be certain and not vague or indefinite. If it is vague or it is not possible to
perform, it cannot be enforced. For example, A agrees with B to put life into B’s dead wife, the agreement is void because of its impossibility of
performance.

9. Legal formalities: A contract may be made by words spoken or written. As regard the legal effects, there is no difference between contract in
writing and a contract made by word of mouth. It is, however, in the interest of parties that contract should be in writing. In some cases, the document
in which contract is incorporated is to be stamped. In some other cases, a contract besides being a written has to be registered
 What is contract? What are essentials of contract?
According to section 2(h) of the ICA 1872, contract is defined as an agreement which is enforceable by law. A contract is an agreement, the object of
which is to create a legal obligation. Contracts essentially consist of two elements:
1. An agreement
2. Its enforceability by law
Agreement: An agreement is defined as every promise and every set of promises forming consideration for each other. A promise is defined as when
the person to whom the proposal is made signifies his assent there to, the proposal is said to be accepted. A proposal when accepted becomes a
promise or in other words, promise means an accepted proposal. This promise from the two parties to one another is known as an agreement.

An agreement to become a contract, must give rise to legal obligation or duty. The term obligation means a legal tie which imposes upon a definite
person the necessity of doing or abstaining from doing, a definite act. An agreement may relate to social or legal matters. An agreement which gives
rise to social obligation is not a contract. It must give rise to legal obligation to become a contract. For Example, A agrees to sell his car to B for Rs.
10,000/-, the agreement gives rise to an obligation on part of A to deliver the car to B whereas B under legal obligation has to pay Rs. 10,000/- to A .
This agreement is a contract.

ESSENTIALS OF VALID CONTRACT : ACC to Sec 10 of Indian Contract Act 1872, All agreements are contracts if they are made by free
consent of parties, competent to contract for a lawful consideration and with a law full object and are not expressly declared to the void. In order to
become a contract, an agreement must have following essential elements:

1. Offer and Acceptance: There must be 2 parties to an agreement i.e. one party making the offer and acceptance by the other party. The terms of
the offer must be definite and clear and the acceptance of offer must be absolute and unconditional. The acceptance must also according to the mode
prescribed and must be communicated to the offeror.

2. Intention to create a legal relationship: When two parties enter into an agreement, their intention must be to create a legal relationship between
them. If there is no intention to create legal relationship, there is no contract between them. An agreement which gives rise to social obligation is not
a contract eg A invites B to a dinner party and B accepts invitation, it is a social agreement. A social agreement is not an enforceable in the court of
law. So, it can be rightly said that every contract is an agreement but every agreement is not contract.

3. Lawful Consideration: An agreement to be enforceable by law or a valid contract must be supported by lawful consideration. The term
consideration means something in return of a promise. A valid contract must be supported by lawful consideration. An agreement, which is not
supported by lawful consideration, is not a contract at all. Consideration need not to be necessarily in cash or kind.

4. Capacity to contract: The parties to the contract must be competent for entering into a valid contract. Every person is competent to contract if, he
is of the age of majority, is of sound mind and is not disqualified from contracting by any law to which he is subject. Minors, lunatics or persons of
unsound mind are parties in competent to contract; or in other words contract with minor, lunatic, or persons of unsound mind is void ab-inito.

5. Free and Genuine Consent: A valid contract must be supported by free and genuine consent to the parties of agreement. The consent of parties
are said to be free if it is not caused by coercion, under influence, fraud, misrepresentation etc.

6. Lawful Object: The object of agreement or valid contract is lawful or in other words object must not be (1) Illegal (2) Immoral (3) Opposed its
public policy.

7. Agreements not declared voids: The agreement must not have been expressly declared void by any law enforced in the country. For example,
Restraint of trade etc.

8. Certainly and possibility of performance: The agreement must be certain and not vague or indefinite. If it is vague or it is not possible to
perform, it cannot be enforced. For example, A agrees with B to put life into B’s dead wife, the agreement is void because of its impossibility of
performance.

9. Legal formalities: A contract may be made by words spoken or written. As regard the legal effects, there is no difference between contract in
writing and a contract made by word of mouth. It is, however, in the interest of parties that contract should be in writing. In some cases, the document
in which contract is incorporated is to be stamped. In some other cases, a contract besides being a written has to be registered

Q. What do you mean by the contract? How it differ from agreement? What are the essentials of valid contract?
Ans.