Sudhansu Sir Unit-I Disha College

OFFER AND ACCEPTANCE Chapter-2

Q. what do you mean by Offer? What are the rules regarding
offer?
Ans. In every agreement there must be a definite offer by one person to another and it is unqualified
acceptance by the person to whom the offer is made. An offer is a proposal by one party for another to
enter into a legally binding agreement with him. The person making the offer is known as the offeror
or promisor. The person to whom it is made is called the offeree or promisee. When the offeree
accepts the offer, he is called the offer acceptor [Section 2(c)]
An offer may be made by words spoken a written. This is known as an express offer. An offer
may also be implied from the conduct of the parties or the circumstances of the case. This is known as
an implied offer.
When an offer is made to a definite person, it is called a specific offer. It can be accepted only
by the person to when it is made. When an offer is made to the world at large it is called a general
offer.
When an offer is made to do something, it is called a positive offer. If an offer is made not to
do something, it is known as a negative offer.
Legal Rules as to Offer
i. Offer may be express or implied: An offer may be express or may be
implied. An express offer is made by words spoken or written. An implied
offer is not made by words spoken or written. It is implied from the conduct
of the parties or from the circumstances.
ii. Offer may be specific or general: A specific offer is one which is made to a
particular person or group of persons. It can be accepted by the personal to
whom it has been made, no one else can accept such an offer. A general offer
is made to the world at large. Therefore, it can be accepted by any person.
iii. Offer must give to legal obligation: A social invitation even if it is
accepted does not create legal relation because it is not so intended. An offer
must be such as would result in a valid contract when it is accepted.
iv.Terms of offer must be definite and certain: An offer must not be
ambiguous, uncertain and vague or indefinite if it is so, it is acceptance
cannot create any contractual relationship. There must be clarity regarding all
the terms of that offer.
v. An offer may be distinguished from A declaration of intention: A declaration by a person that
he intends to do something, gives no right of action to another, such a declaration only means that
an offer will be made or invited in future and not that an offer is made now for e.g., advertisement
or an auction sale.
vi. An offer may be distinguished from An invitation to an offer: Display of goods by the
shopkeeper in his window, with prices marked on them is not an offer but merely an invitation to
the public to make an offer to buy the goods at the marked prices. For Example: quantities
catalogues, advertisement in a newspaper for sale of an article or circulars do not constitute an
offer they are instead an invitation to the public to make an offer.
vii.Offer must be communicated: According to Section 4, “the communication of a proposal is
complete when it comes to the knowledge of the person, to whom it is made’. An offer cannot be
accepted unless it has been brought to the knowledge of the person to when it is made. This
principle was relied in following case.
Sudhansu Sir Unit-I Disha College
Lalman V/s Gouri Dutt, 1913 (11-ALJ489)
A’s nephew absconded from home, he sent his servant in search of the boy. Subsequently ‘A’
published advertisement offering to pay Rs. 500 to anybody communicating the where about of the
boy, the servant traced the boy in ignorance of this announcement. Subsequently when he comes to
know of the reward, he claimed it. Held, he is not entitled to the reward, because in order to
constitute an offer there must be its acceptance and there can be no acceptance unless there is
knowledge of the offer.
viii. Offer must be made with a view to obtaining the assent: The offer to do or not to do
something must be made with a view to obtaining the assents of the other party to who the offer
has been addressed and not merely with a view to disclosing the intention of making an offer.
ix. Offer should not contain a term, the non compliance which would amount to acceptance: A
man cannot say that if acceptance is not communicated by a certain time, the offer would be
considered as accepted. For e.g. A right to B ‘I will sale you my horse for Rs. 50,000 and if you do
not reply, I shall assume you have accepted the offer.”
x. A statement of price is not an offer: A mere statement of price is not an offer to sale
When an offer does come to an end?
An offer may come to an end by revocation by or laps or rejection.
Revocation or laps of offer:
Sec-6 deals with various modes of revocation of offer. According to it , an offer is revocated
i. By communication of notice of revocation by the offeror at any time before its acceptance
is complete as against him {Section 6(1)}
ii. By laps of time: If a time is prescribed for acceptance, the offer gets revocated by non
acceptance within that time. If no time has been fixed, the offer lapses by expiry of a reasonable
time [Section 6(2)]
iii. By failure to fulfill a condition precedent to acceptance [Section 6(3)]: If offeree is failed to
fulfill the condition made by offeror before it is acceptance, the offer stands revoked Example:
‘A’ makes an offer to sale a definite article with a condition to pay Rs. 1,000 as advance on or
before 5-9-09. if none pay Rs. 1,000 on or before the date then the offer is revoked.
iv. By death or insanity of the offeror: Death of the offeror puts an end to the offer provided the
fact if his death or insanity comes to offeree’s notice before acceptance. If he accepts the offer
in ignorance of death of offeror the acceptance is valid as against the heirs of offeror [Section
6(4)
v. By counter offer: Where an offer is accepted with same modification in the terms of the offer
or with some other condition net forming part of the offer, such qualified acceptance amounts
to a counter offer.
vi. If an offer is not accepted according to the made prescribed: if the offeree accepted the
offer in un-prescribed mode the offeree may revoke the offer. If there is no mode is prescribed
by the offeror, offeree may accept the offer in any usual mode.
vii.If the law is changed: an offer comes to an end if the law is changed so as to the make the
contract contemplated by the offer illegal or incapable of performance.

Q. what do you mean by acceptance? What are the legal rules of

acceptance?
Ans. A contract emerges from the acceptance of an offer. Acceptance is the art of assenting by the
offeree to an offer. In other words when the, offeree signifies his assent to the offeror, the offer is said
to be accepted. An offer when accepted becomes an promise.
Acceptance may be express or implied. It is express when it is communicated by words
spoken or written. It is implied when it is to be gathered from the surrounding circumstances or the
conduct of the party.
Sudhansu Sir Unit-I Disha College
Who can accept?
When an offer is made to a particular person it can be accepted by offeree only. If it is
accepted by any other person, there is no valid acceptance. When an offer is made to world at large,
any person to whom the offer is made can accept it.
Legal rules as to Acceptance
The acceptance of an offer is the very essence of a contract to be legally effective it must satisfy
the following conditions:
i. It must be absolute and unqualified: An acceptance must be absolute and unqualified [Section-
7{1)]. In respect of all terms of the offer, whether material or immaterial, major or minor. If the
parties are not ad idem on all matters concerning the offer and acceptance there is no contract.
ii. It must be communicated to the offeror: the acceptance of an offer must be communicated to the
offeror. A mere resolve or mental determination on the part of the offeree to accept an offer is not
sufficient. In order to result in a contract the acceptance must be a matter of fact.
iii. It must be according to the mode prescribed or usual and reasonable mode: if the acceptance is
not according to the mode prescribed. The offeror may intimate to offeree within a reasonable time
that the acceptance is not according to the made prescribed and may insist that the offer must be
accepted in the prescribed mode only. When no mode is prescribed offeree can accept in any
reasonable mode.
iv. It 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 must show an intention on the part of the acceptor to fulfill terms of the promise: if the no
such intention is present the acceptance is not valid. The intention must be good.
vi. If must be given by parties or party to whom the offer is made: The offer must be accepted by
the specified person to whom the offer is made in case of a specific offer and anybody n case of a
general offer.
vii. It must be given before the offer laps or before the offer is withdrawn. ‘It is summer offer,
diwalli offer etc.’
viii. It cannot be implied from silence: Silence does not result in nay acceptance. It must be
communicated by word spoken or conduct of the parties. The acceptance of an offer cannot be
implied from the silence of the offeree or his failure to answer, unless the offeree has by his previous
conduct indicated that his silence means that he accepts.