2. Offer - Definition
• An offer is a
– Proposal by one party to another to enter into a
legally binding agreement with him.
• A person is said to have made a proposal,
when he “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”. (Sec. 2 (a))
3. How an offer is made?
• Express offer
• Implied offer
• Specific offer
• General offer
4. What constitutes an offer?
• Offer must show an obvious intention on the
part of the offerer .
• Offerer must make the offer with a view to
obtaining the assent of the offeree
• Offer must be definite
• It must be communicated ot the offeree
5. Legal Rules as to Offer
• Offer must be such as in law is capable of being
accepted and giving rise to legal relationship
• Terms of offer must be definite, unambiguous
and certain and not loose and vague
• An offer may be distinguish from
– A declaration of intention and an announcement
– An invitation to make an offer or do business
• Newspaper advertisements are not offers
• A recognized exception to this is a general offer of reward to
the public
6. Legal Rules as to Offer
• Offer must be communicated
• Offer must be made with a veiw to obtaining
the assent
• Offer should not contain a term the non-compliance
of which may be assumed to
amount to acceptance
• A statement of price is not an offer
7. Other aspects of Offer
• Tenders is an offer (in response to an
invitation to offer) is an offer and may be
either
– Definite Offer
– Standing Offer
• Special terms in a contract
• Cross offers
8. Acceptance - Definition
• Acceptance is the act of assenting by the
offeree to an offer
• When the offeree signifies his assent to the
offeror, the offer is said to be accepted. An
offer when accepted becomes a promise
• Acceptance may be
– Express
– Implied
9. Who can accept?
• Acceptance of particular offer
• Acceptance of general offer
10. Legal Rules as to Acceptance
• It must be absolute and unqualified
• It must be communicated to the offeror
• It must be according to the mode prescribed
or usual and reasonable mode
• It must be given within a reasonable time
• It cannot precede an offer
• It must show an intention on the part of the
acceptor to fulfill terms of the promise
11. Legal Rules as to Acceptance
• It must be given by the party or parties to
whom the offer is made
• It must be given before the offer lapses or
before the offer is withdrawn
• It cannot be implied from silence
12. Other aspects of Acceptance
• Acceptance subject to contract
– Offeree accepts an offer
• “subject to contract”
• “subject to formal contract”
• “subject to contract to be approved by solicitors”
• Agreement to agree in future
– It is absurd to say that a man enters into an
agreement till the terms of agreement are settled
14. When is Communication Complete?
• Communication of Offer
– It is complete when it comes to the knowledge of
the person to whom it is made.
• Communication of Acceptance
– As against the proposer when it is put into a
course of transmission to him
– As against the acceptor when it comes to the
knowledge of the proposer
15. When is Communication Complete?
• Communication of revocation
– Revocation means “taking back”, “recalling” or
“withdrawal”
– It may be revocation of offer or acceptance
– Ag against the person who makes it, when it is
put into a course of transmission to the person to
whom it is made
– As against the person to whom it is made, when it
comes to his knowledge
16. Time for revocation of offer and
acceptance
• Time for revocation of proposal / offer
– It may be revoked at an time before the
communication of its acceptance is complete as
against the proposer, but not afterwards
• Time of revocation of acceptance
– It may be revoked at any time before the
communication of the acceptance is complete as
against the acceptor, but not afterwards.
17. When does an offer come to an end?
• An offer may come to an end by
– Revocation or lapse of offer
– Rejection of offer
18. Revocation or Lapse of Offer
• By communication of notice of revocation by the
offeror at any time before its acceptance is complete as
against him
• By lapse of time
• By non-fulfillment by the offeree of a condition
precedent to acceptance
• By death on insanity of the offeror
• If a counter-offer is made to it
• If an offer is not accepted according to the prescribed
or usual mode
• If the law is changed
19. Revocation by Rejection of Offer
• Express rejection
– By words written or spoken, and effective only
when notice of rejection reaches the offeror
• Implied rejection
– Where the offeree makes a counter offer
– Where the offeree gives a conditional acceptance
