OFFERS AND ACCEPTANCE

INDIAN CONTRACT ACT

 According to section 2 (h) of the Indian Contract

Act, 1872 “An agreement enforceable by law is
a contract
REQUIREMENTS OF A LEGALLY ENFORCEABLE CONTRACT

 Offer and acceptance: Contract must have an offeror

and an offeree.
 Genuine assent: agreement by both parties.
 Legality: terms of contract should be of a legal
nature.
 Consideration: its, what is exchanged for promise.
 Capacity: must have legal ability to contract.
 Proper form: certain agreements must be in writing.
OFFER & ACCEPTANCE
Firsty, there must be an offer and its acceptance. Such
offer and acceptance should create legal obligations
between parties. This should result in a moral duty on
the person who promises or offers to do something.
Similarly this should also give a right to the promise to
claim its fulfillment. Such duties and rights should be
legal and not merely moral.
 OFFER + ACCEPTANCE = AGREEMENT

 Offer – A promise to do (or not do) something

provided the offeree does (or does not do)
something in return.
 Acceptance – Act or promise in response to an
offer
 ELEMENTS OF THE OFFER
 Two Parties - There must be two parties
 Communication - The offer must be communicated to the
offeree. If it is never communicated to the offeree, it cannot be
accepted and no valid contract comes in to existence.
 Willingness - The offer must show willingness of the offeror.
 Intention of obtaining assent - offer must be made with a view
to obtaining the assent of the offeree.
 Offer may be positive or negative - The offer may involve doing
something or doing nothing- section 2 (o). The offer to do
something is a positive offer or not to do something is a
negative offer.
LEGAL RULES AS TO OFFER
1) The ‘offer’ must be with intent to create a legal relationship.
2) The offer must be certain and definite
3) The offer must be express or implied
4) The offer must be distinguished from an invitation to offer.
5) The offer must be either specific or general.
6) The offer must be communicated to the person to whom it is
made. Otherwise the offeree cannot accept the offer.
7) The offer must be made with a view to obtaining the consent
of the offeree.
8) An offer can be conditional but there should be no term in the
offer that noncompliance would amount to acceptance.
CLASSIFICATION OF OFFER
1. Expressed - offer made by using words spoken or written
2. Implied - offer which could be understood by a conduct of parties,
e.g. a Bus company carrying the passenger.
3. General - an offer made to public at large with or without any time
limit. E.g. a person advertise for his missing boy.
4. Specific - an offer is made to a particular and specified person, e.g.
one to ne offers of purchase of goods by company.
5. Cross - As per Section2(b), when a person to whom proposal (offer) is
made signifies his assent, the proposal is said to be accepted.
6. Continuous Offer & Counter offer
INVITATION TO OFFER

 Display of goods by a shopkeeper in his

window, with prices marked on them , is not an
offer to buy the goods at the marked prices.
 ‘A’ sees an article marked price rupees twenty in B’s shop, He
offers B, Rs 20 for the article . B refuses to sell saying the
article is not for sale.
 Here A can not force B to sell him the article at Rs 20. Marking
of price of an article amounts to an invitation to offer and not
an offer.
LAPSE & REVOCATION OF OFFER
1) Time stated in the offer
2) Reasonable length of time
3) Rejection by the offeree.
4) Revocation by the offeror
5) Counteroffer
6) Death or insanity of either the offeror or offeree
7) Illegality or Destruction of the specific subject matter
ACCEPTANCE

 A proposal when the person to whom the

proposal is made signifies his assent thereto
the proposal is said to be accepted.
ACCEPTANCE & LEGAL RULE OF THE
ACCEPTENCE
 Be made by the person(s) to whom offer is made
 Acceptance must be absolute and unqualified
(unconditional)
 The acceptance must match the offer
 Acceptance must be communicated to the offeror:
 Acceptance must succeed the offer
 Rejected offers can be accepted only, if renewed
THANK
YOU