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ACKNOWLEDGEMENT
This project couldn’t have been possible without the unflinching support
and help by Professor Kanan Divetia.
Index
Introduction of Topic
- Offer
Under the Contract Act, Section 2(a), an individual has made an offer when
implying the readiness to do or not do a specific action that will mutually
benefit the other party involved in the agreement. An offer must be made
with the intention to become legally binding upon acceptance. A contract
becomes binding when the offer has been unconditionally accepted.
1) The offeror, which is the individual making the offer to the other (also
called proposer)
2) The offeree, which is the individual having the offer made to them
(also called proposee).
Under section 2(c) of the Contract Act, an offeree becomes the acceptor
when accepting the proposal made by the offeror.1
- Agreement
The Indian Contract Act 1872 defines acceptance in Section 2 (b) as “When
the person to whom the proposal has been made signifies his assent
thereto, the offer is said to be accepted. Thus, the proposal when accepted
becomes a promise.”
So as the definition states, when the offeree to whom the proposal is made,
unconditionally accepts the offer it will amount to acceptance. After such an
offer is accepted the offer becomes a promise.
1
https://www.upcounsel.com/what-is-a-valid-offer-in-contract-law
Example - A offers to buy B’s car for rupees two lacs and B accepts such an
offer. Now, this has become a promise.
- Consideration
Example - Shubham agrees to sell his car to Raju for Rs 50,00,000. Raju’s
payment serves as consideration for Shubham’s promise to sell the car to
him. Shubham’s consideration is his promise to sell him the car.
- Contract
An agreement between two or more parties creating obligations that is
enforceable or otherwise recognizable at law. A contract is an agreement
enforceable by law. Contracts are promises that the law will enforce. The
law provides remedies if a promise is breached or recognizes the
2
https://www.toppr.com/guides/business-laws/indian-contract-act-1872-part-i/acceptance/
3
https://legaldictionary.net/consideration/
performance of a promise as a duty. Contracts arise when a duty does or
may come into existence, because of a promise made by one of the parties.
To be legally binding as a contract, a promise must be exchanged for
adequate consideration. Adequate consideration is a benefit or detriment
which a party receives which reasonably and fairly induces them to make
the promise/contract. For example, promises that are purely gifts are not
considered enforceable because the personal satisfaction the grantor of the
promise may receive from the act of giving is normally not considered
adequate consideration. Certain promises that are not considered contracts
may, in limited circumstances, be enforced if one party has relied to his
detriment on the assurances of the other party. A contract means an
agreement which is enforceable by law. An agreement consists of reciprocal
promises between the two parties. In case of contract, both the parties are
legally bound by the promise made by him. A contract to perform a promise
could arise in these ways: by agreement and contract, standard form
contracts, and promissory estoppel.4
- Performance of contract
The term ‘Performance of contract’ means that both, the promisor, and the
promisee have fulfilled their respective obligations, which the contract
placed upon them.
4
https://www.lawctopus.com/academike/contracts-and-quasi-contracts/
Promises bind the representatives of the promisor in case of the death of
the latter before performance, unless a contrary intention appears in the
contract.
1) It must be unconditional.
2) It must be made at a proper time and place, and under such
circumstances that the person to whom it is made may have a
reasonable opportunity of ascertaining that the person by whom it is
made is able and willing there and then to do the whole of what he is
bound by his promise to do.
3) If the offer is an offer to deliver anything to the promisee, the
promisee must have reasonable opportunity of seeing that the thing
5
https://accountlearning.com/performance-of-contract-meaning-types-of-performance/
offered is the thing which the promisor is bound by his promise to
deliver.
An offer to one of several joint promisees has the same legal consequences
as an offer to all of them.
It has been held by the High Court of Calcutta that a creditor is not bound
to accept a sum smaller than he is entitled to and therefore the tender of
such a sum does not stop interest running on it.
A so-called tender of less than the debtor admits to be due is not a tender
at all, but an offer of payment on account, which the creditor may accept
or not, and risks nothing, in point of law, by not accepting, though it is
often, in point of fact, unwise not to take what one can get. He may take
the debtor’s offered payment without prejudice to his claim, such as it may
be, to a further balance or a n y other right. The debtor is entitled to a
receipt for what he pays, but not to a release. A tender will be vitiated by
the addition of any terms which amount to requiring the creditor to accept
the sum offered in full satisfaction, or to admit in any other way that no
more is due.
Offer must be unconditional
A tender of debt before the due date is not a valid tender and will not
prevent interest from running on the loan.
Reasonable opportunity
A tender of goods must be so made that the person to whom the goods are
offered has a reasonable time to ascertain that the goods offered are goods
of the quality contracted for. A tender made at such a later hour of the
appointed day that the buyer has no time to inspect them is not good.
Tender of money
Legal tender must be in the current coin of the country. A creditor is not
bound to accept a cheque because it is a conditional payment; but if a
cheque is tendered and received and the creditor or his agent objects only
to the amount, or makes no no immediate objection at all, he cannot
afterwards object to the nature of the tender. Downright refusal by the
creditor to accept payment at all precludes any subsequent objection to the
form of the tender.
Reported in : AIR1960AP178
..... : (air 1915 pc 83) has succinctly dealt with the position of equity and law in dealing
with section 55 of the indian contract actas follows: 'the law applicable to the point is contained
in section 55 of the indian contract act, 1872, which provides that - 'when a party to
a contract promises to do a certain thing at or before a specified time, or certain things at or before
..... specified times, and fails to do any such thing at or before the specified time, the contract, or
so ..... it is therefore not open to the defendant to question the imperative nature of the operation
of section 39 of the contract act in the circumstances of this case. 12. from the foregoing it
follows that having regard to the application of sections 39 and 55 of the indian contract act, we
are firmly of the opinion that the refusal of the defendant to perform his part ..... . plainly therefore
even if nothing further had happened in this case, still we are firmly of the opinion that the plaintiff
could have availed himself of the rights available under section 59 of the indian contract act, as
in this case clearly there has been a refusal on the part of the defendant to perform his part of the
.....
2) Aug 01, 1973 (HC)
Govindlal Bhikulal Maheshwari and ors. Vs. Firm Thakurdas Bhallabhadas
...
Court : Mumbai
..... . before we go to the authority on which reliance has been placed, it would be proper to refer
to the provisions of sections 38and 45 of the indian contract act. according to the learned
counsel for the defendant no.1, section 38 of the contract act clearly indicated that where there
are several joint promises would be sufficient to discharge the promisor from the liability under the
promise ..... amount due under the chithi and he was in law entitled to give a valid discharge to the
defendant no. 1. the learned counsel relied on the provisions of section 38 of
the indian contract act and the full bench decision of the madras high court in annapurnamma v.
akkayya ilr(1913) mad 544 in which it was held, white, c.j., dissenting, that one ..... talbot, j., put
the principle thus: the debtee's discharge of one joint and several debtor is a discharge of all'.
under the indian contract act, however, the position is entirely different as would be seen
from section 44 of that act, which provides that where two or more persons have made a joint
promise, a release of one of such joint promises by promisee ..... which was to be performed.
now, section 38 is in the following wards :'where a promisor has made an offer of performance to
the .....
..... be still in the control of the appellant, should be handed over to the respondent as part of the
payment which he has to make.' 7. section 38, contract act, 1872, provides that offer of
performance must be uncondi- tional. clearly, the offer made on 29th of october 1949, was not
unconditional to be effective. if ..... appellate authority has come to the conclusion that the deposit
made on 29th october 1949, did not satisfy the requirements of the proviso to section 13 (2) (i) of
the act. 6. in -- 'narain das v. abinash chandar',air 1922 pc 347, lord buckmaster said: 'the tender
was accompanied by a condition ..... section 13 (2) (i) of the act. section 13 (2) (i) of
the act reads:'a landlord who seeks to evict his tenant shall apply to the controller for a direction
in that behalf. ..... 2. briefly summarized the facts of the case are these. on 11th august 1949,
khushi ram landlord applied under section 13, punjab urban rent restriction act, 1949, hereinafter
referred to as the act, for the eviction of jiwana mal tenant on the ground of non-payment of rent.
that application was rejected by ..... 19th november, 1949. 3. from the order passed by the rent
controller on 19th november 1949, the landlord appealed under section 15 of the act. 4. in the
appellate proceedings the point that arose for decision was whether the tenant had complied with
the requirements of the proviso to .....6
6
https://www.legalcrystal.com/cases/search/name:indian-contract-act-1872-section-38
Literature Review
Conclusion
In the end, I will conclude by saying that this project will help you
understand the concept of Section 38 of Indian Contract Act. I have tried
to cite other sections and acts as well which have some part of the given
the topic in order to expand one’s understanding of it. I have done the
literature review on an article as well which is closely related to Section 38
as I could not find any article directly relating to the topic I was looking for.
Bibliography
3. The Indian Contract Act by Sir Dinshaw Fardunji Mulla, 15th Edition