Title CONTRACT ACT ✅

SALIENT FEATURES OF CONTRACT ACT OFFER PROPOSAL/OFFER Section 2 (a) defines the proposal /offer as • When one person signifies to another • his willingness to do or • to abstain from doing anything • . with a view to obtain the assent of other Such act or abstinence is said to make a proposal. #Signifies-to speak #Abstain to stop #assent -approval #abstinence-practice of stopping from indulging in something Analysis of definition: For a valid offer the party must express the willingness to do or not to do something. However mere expression of willingness does not constitute an offer. For instance where A tells B that he desires to marry by the end of 2013 it does not constitute an offer. But to constitute a valid offer it must be made to obtain the assent (acceptance) of the other. Thus in the above example,' A' further adds, "will you marry me" it will be an offer as this statement is made with a view to obtain the acceptance of B. Where A tells B "Not to sell your house to C as I want to buy it now in this case Mr. A is abstaining Mr. B from selling the house to C with a view to get the acceptance of B so that Mr. B may sell his house to A". Thus the offer may be (a) by doing an act (b) by abstaining from doing an act. Doing an act may be by words or by conduct. Examples:- a). A proposes by; letter to sell a house to B for INR 50 lakhs. (BY WORDS) b). The bus standing at the bus stand with the gates open is an offer by conduct that anyone who wants to travel can sit and enjoy the journey. (BY CONDUCT) Types of offer/Classification of offer: General offer - it is an offer made to public in general and any one can accept it. Indian contract act points out that the performance of the conditions of a proposal is an acceptance of the proposal. Please remember that anyone can perform the conditions of proposal and so anyone can accept it. For example, I offer to sell my car for Rs.50,000/ and any one who wants to buy my Car shall give me Rs.50,000 and take the car.
Specific offer: Specific offer is made to a specific person & can be accepted by identified person only. For example I offer to sell my car for Rs.50,000/ to a school teacher. Here any one cannot buy my car only a school teacher can buy my car. Cross offers: when two parties exchange identical offers but in ignorance of each other's offer such offers are called cross offers. For instance: Mr. A mail to Mr. B for selling his car at INR 1 lakhs. At the same time Mr. B also mailed to Mr. A to purchase the car of Mr. A for the same amount. Neither Mr. B received the mail of Mr. A nor did Mr. B receive the mail of Mr. A before sending their respective letters (Known as ignorance). Now this will be considered as cross offer. The court will not construe one as offer and the other offer as its acceptance. Counter offer: when the person to whom the offer is made makes the qualified (conditional) acceptance of the offer he is said to have made a counter offer. The counter offer so made in rejection of the original offer. For instance: Mr. A offers to buy the car of Mr. B at INR 1 lakhs. However Mr. B said that he will sell it at INR 1.5 lakhs. Now in this case the statement made by B will be considered as counter offer i.e. the rejection of original offer of Mr. A. Standing, open and continuing offer: An offer which is allowed to remain open for acceptance over a period of time is known as a standing offer, open offer or continuing offer. Tender for supply of goods is a kind of standing offer. Rules as to offer: a) The offer must be capable of creating legal relation - A social invitation even if it is accepted does not create legal relations. Offer should be such when it is accepted should result in a contract which is binding on both the parties. For instance: Mr. Ram invited Mr. Shyam for celebrating the birthday of Mr. Ram. Now this cannot be considered as offer by Mr. Ram as it is only a social invitation. Even if Mr. Shyam accepted the invitation it is not binding upon Mr. Ram. b) The offer must be certain, definite and not vague-if the terms of an offer are vague or indefinite and the person to whom it is made does not know what he has to accept, and then this cannot be termed as offer. For Instance: A Offers to sell B 1000 tons of oil. There is nothing to show what kind of oil is intended. The offer is not capable of being accepted for reason of uncertainty. But if the offer contains a term which can make the offer clear then offer shall not be deemed to be vague. For example A is a dealer in Coconut oil and he offers to sell 1000 tons of oil. It shall constitute a valid offer since the nature of A's trade provides an indication about the oil he is intending to sell. c) The offer may be expressed or implied: Expressed offer can be of two types: a) oral offer (by words of mouth) b) written offer (in writing). Implied offer means offer by doing an act. The bus standing at the bus stand with the gates open is an offer by conduct that anyone who wants to travel can sit and enjoy the journey. (BY CONDUCT) d) The offer must be distinguished from an invitation to offer. • In order to ascertain whether a particular statement amounts to an offer or an invitation to offer the test would be intention with such statement is made. • The person who makes the statement intends to be bound by it as soon as it is accepted by the other than it is offer. • Where the person intends some further acts to be done before he becomes bound by it then it is an invitation to offer.
• For instances: a) Prospectus issued by the college is an invitation to offer as the college wants that student should first fill the details contained therein and deposit the same (known as offer by student), thereafter college will take the decision whether the student will get the admission or not. b) Goods displayed in the showroom with price tag attached is an invitation to offer not offer as the shopkeeper wants from the customer to approach him and to give him an offer that he wants to buy it. e) The offer should not contain a term the non compliances of which will amount to acceptance. If the offer contains a condition that if an acceptance is not communicated by a certain time offer shall be deemed to be accepting, non communication of acceptance by a particular time cannot be taken as acceptance. For example I asked my friend that I want to sell my house to you for 1 crore and if you did not reply within one hour , it will be deemed that you have accepted my proposal. f) Special terms of an offer shall be brought into the notice of other party: - . Where special terms are included in the offer they must be dully brought into the notice of other partly at the time when the proposal is made. If this is not done and the contract is entered into, the other partly will not be bound by specific term. These special terms should be so presented that a reasonable man may become aware of them before he enters into a contract. Certain condition is attached to transaction like purchase of a ticket for a journey or deposit of luggage in a clock room. Where ever on the face of the ticket the words for condition "see back" are printed, then the person whom the ticket issued is presumed to be aware of them and he is bound by them. The fact that he did not read them or could not read the does not alter the position. Con For instance: A deposited the bag in waiting room of railway station. On the face of the ticket issued to him was written "SEE BACK" one of the conditions limited the liability of the company for loss up to 10 kg. Bag was lost A claimed 24 kg as its value. It was held A was bound by the conditions written on the back of the ticket. He hasn't read them doesn't entitle him for 24 kg. But if "SEE BACK" was not written he can claim 24 kg. ACCEPTANCE (A) Meaning - as per section 2 (b) the person to whom the offer is made signifies his assent, the proposal is said to be accepted. A proposal when accepted becomes a promise as per [section 2 (b)]. For example I offer to sell my car to my friend for Rs.50,000/ and he said OK means he accepted my offer . The rules regarding acceptance are as follows: - a) Acceptance must be absolute and unqualified - As per section 7 an acceptance to be valid should be absolute and unqualified. One should accept what is offered to him. Qualified acceptance is no acceptance rather it is counter offer. For instance-A offer to sell cow to B who replies that he would buy it only if he gave It only if it. This is not acceptance because it is qualified. the calf along with b) Acceptance must be to an offer: An acceptance should be response to an offer. One cannot accept d be resp what is not offered to him X cannot accept to buy Y's car without the offer being made by Y. In the case of Lalman Shukla vs. Gauri Duitt: • Master sent his servant to trace his missing nephew. • The Master did not hear anything about the missing nephew for some days. • Ultimately he announced a reward for anyone who may find his missing nephew.
• The servant without the knowledge of this announcement found out the boy. • Subsequently on becoming aware of the reward he claimed the reward. Servant was not entitled to it. * First of all there should be offer only then it can be accepted *S, when traced A's son → He was unaware about offer. → & if he was not aware about offer, how he can accept. c) Acceptance must be made in the mode prescribed - Normally acceptance must be in the usual and reasonable manner but if the mode of acceptance is prescribed in the proposal it shall be accepted in the manner prescribed. Let us suppose I made an offer to sell my car for Rs.50,000 and any one interested can E mail me, only those who sent E mail me , theirs acceptance is valid. d) Acceptance must be given within the time specified: Acceptance must be given within the time specified but, if no time is specified - acceptance must be given within reasonable time or before the offer lapses. What is reasonable time? It depends on the facts and circumstances of each case. Let us suppose I made an offer to sell my car for Rs.50,000 within 7 Days, it means the offer is valid for 7 days only. And if no time period is mentioned it should be within reasonable time. e) Mere silence is no acceptance-the offer cannot be made as to constitute the silence as the acceptance. Case law: Felt house Vs. Bindley • A wrote to B offered to purchase his horse at 35 pounds. • He stated further that if I hear nothing I shall consider the horse as mine. • No reply was ever sent by B. on the other hand B instructed his auctioneer “C” not to sell the horse as it was already sold to A.