Proposal or offer: -
The term proposal is similar to the term offer.
The term proposal is the base of an agreement.
Section 2(a) defines “ When a 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”.
Section2(a) reveals 3 essential elements
(a)Expression of willingness to do or not to do
(b) Made to another person that is a person
cannot make offer to himself.
c) With the object of gaining the consent of
the other person to such act.
Kinds of Offer
(1) How an offer is made?
(2) To whom an offer is made?
1) How an offer is made: An offer may be
express or implied from the conduct of the
Kinds of Offer
Express Offer: It is one which is made by words
spoken or written such as letter telegram, telex,
fax messages, email or thru internet. Thus
where A offers to sell his pen to B for Rs. 20/-. It
is an express offer.
Implied offer: it is one which may be gathered
from the conduct of the party or the
circumstances of the case. Thus where a person
go to a doctor for treatment, his conduct implies
an offer that if the treatment is given, the offeror
will pay the usual charges.
(2) To whom an offer is made: An
offer may be maid to
a) A particular person
b) A particular group or body of persons
c) The public at large
a)Specific offer :An offer made to a definite
person and it is accepted only by the person to
whom it is made.
b)General offer :When an offer is addressed to
whole world. A general offer is accepted by any
The leading case on this point is
CARLILL V CARBOLIC SMOKE BALL CO.(1893)
In this case carbolic smoke ball Co. offered by advertisement
a reward of 100 pounds to any person who should contract
influenza after having used the smoke ball three times daily
for two weeks according to the printed direction. It also
added that 100 pounds were deposited in the bank showing
the sincerity in the promise. The plaintiff Mrs. Carlill used the
smoke ball according of the directions of the company but
contracted influenza . It was held that she could recover the
reward because the advertisement was not mere an
invitation to offer but an offer at large .Performance of
condition is sufficient acceptance without notification.
An Offer must be distinguished from
A mere statement of intention e.g. an announcement of
forthcoming auction sale. Thus a person who attends the advertised
place of auction could not sue for breach of the contract if the sale
An invitation to offer e.g. an advertisement in newspaper ,the
display of goods in shop window with prices marked upon them
A mere Communication of information in the course of
negotiations e.g. statement to the lower price made in answer to
an enquiry as to the lowest price for sale. A catalogue of goods for
sale e.g. a book sellers catalogue of books with price stated
A casual inquiry e.g. Do you intend to sell your computer ? Its not
A prospectus inviting the public to subscribe to the shares and
debentures of a company
Advertisement for the tenders
Essentials of a valid offer
Offer must be capable of creating legal
relationship: The offeror must intended the
creation of legal relations .He must intend that if
his offer is accepted , a legally binding
agreement shall result.
Offer must be certain definite and not vague:
No contract can come into existence if the terms
of the offer are vague or loose and indefinite
Both the parties should be clear about the legal
consequences arising out of contract (Taylor V
Taylor V Portington(1855)
A agreed to take B’s house on rent for three
years at the rent of 85 pounds per annum
provided the house was put into thorough repair
and the drawing room was decorated “according
to present style". It is vague term ,because the
term present style may mean one thing to A and
another to B. Hence the agreement was void on
the ground that the terms of the offer was vague
Offer must be communicated
There can be no offer by person to himself .It must always be
communicated to the offeree. If there is no communication of
an offer ,there is no acceptance resulting in the contract .Thus
if A writes a letter to B offering to sell his watch for Rs.200 But
never posts the letter and keeps it in his pocket ,it is not an
offer and B can never accept it .
Lalman Shukla V Gauri Dutt: D sent his servant P to trace
his missing nephew .D in the meantime announced a reward
for providing a information about the missing boy .P ,in
ignorance of the announcement traced the boy and informed
D.P later on came to know of the reward and he claimed it. His
claim was dismissed on the ground that he was ignorant of the
offer .It was further held that it was the duty of the servant to
search for the boy .
Offer must be made with a view to
obtaining the assent of the other party
An offer must be distinguished from mere
expression of intention .
Harris V Nickerson(1873)
N advertised in the newspaper to effect sale of goods
on particular day at particular place .he travelled a
long distance to bid for the things .On arrival he
found the sale was cancelled. He sued N for
breach of contract .It was held that adv. was
merely expression of intention and not an offer
which could be accepted by travelling to the place
of intended sale.
An offer may be conditional
An offer can be made subject to condition. In
that case it can be accepted subject to the
condition .A conditional offer lapse when
condition is not accept.
Example T,who could not read ,took an excursion ticket
on the railway .On the front of the ticket was mentioned
“for condition see back” One of the condition was that
the railway company would not be liable for personal
injuries to the passengers .T was injured by the railway
accident .Held T was bound by the conditions and could
not recover any damages.
Offer should not contain a term the non
compliance of which would amount to
Example: A writes to B,”I offer to sell my
house for Rs. 40000.If I do not receive a
reply by Monday next, I shall assume that
you have accepted the offer, "There will be
no contract if B does not reply .
Lapse of an offer
An offer lapse –
(a) If either offeror or offeree dies before acceptance .
(b) If it is not accepted within
I)the specified time or
II )A reasonable time, If not time is specified
(c) If the offeree does not make valid acceptance: For example
by sending a letter by mail when a reply by hand was
An offer can also lapse by revocation. A person who
makes an offer can withdraw it any time before
acceptance .An offer can be made for fixed period .the offer
will automatically expire if it has not been accepted till then.
An invitation to offer is not an offer
An offer must be distinguished from an
invitation to offer .In this case of an invitation
to offer the aim is merely to circulate
information of readiness to negotiate
business with anybody who on such
information comes to the person sending it.
Such invitations are not offers in the eyes of
law and do not become promises on
Standing or Open Offer: An offer for the
continuous supply of a certain article at a certain
rate over a definite period is called a standing
offer .Such offers though accepted do not give
rise to contract unless an actual order is placed .
Counter Offer. A counter offer is rejection of
original offer and making a new offer .this new
offer is counter offer.
Cross Offer. When two parties makes identical
offer to each other ,in ignorance of each other’s
offer ,such offers are known as cross offers.