OFFER AND ACCEPTANCE

Formation of Agreement required two steps ,

making of a proposal by one person and acceptance
of this proposal by other.
Agreement= Offer + their acceptance
The Proposal or Offer
Sec. 2 (a) define an offer in these words:
When one person signifies to another
his willingness to do or to abstain from doing anything,
with a view to obtaining the assent (acceptance) of that
other to such act or abstinence, he is said to make a
proposal
e.g. R tells S : I am ready to sell my machine for
Rs.9000,are you ready to buy.
This is clear offer from R to S.

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Requirements for Valid Offer

1.Offer must be express or implied
2.Offer must intend to create legal relation
3.Offer must be certain and not vague in meaning
4.Offer may be specific or General
5. Offer must be communicated
6.Offer must be distinguished from invitation to offer
7.An Offer should not contain a term forcing an action on
Offeree

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TYPES OF OFFER
Express offer
Implied offer
Specific offer
General offer
Cross offer
Counter offer
Standing offer

What is difference between Invitation to Offer and General

Offer?
Invitation to Offer: Aims at taking the customer to the
advertiser to start negotiation.
General Offer: Aims at leading the offeree (to whom offer
made) to the performance of specified condition which
would amount to acceptance of offer.

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The Acceptance
Sec. 2 (b) When a person to whom the proposal is made , signifies
his assent thereto, the proposal is said to be acceptance.
A proposal , when accepted become a promise.
Requirements for Valid Acceptance:
1.By a proper person2.Within proper time
3.Must be absolute and unqualified(total and without condition)
4.Must be Communicated
5.Must be given in a proper Mode.
6.Accepatnce must succeed the offer
7. Offer once rejected can not be accepted
5

Communication of Offer, Acceptance and

Revocation
1.Communication of Offer

An offer is said to have been made when it

comes to knowledge of the other person for
whom it was intended.

2.Communication of Acceptance

For Acceptance two steps required: (i)

Offeree transmits his acceptance and (ii)
Message reaches the Offeror.
Brogden Vs Metropolitan railways Co.
i. Communication of acceptance from offeree is
binding upon the Offeror as soon as the latter of
acceptance is posted so as to be beyond the
Offerees control.
ii. Communication of acceptance from offeree is
binding upon the offeree himself only when it
comes to the knowledge of the Offeror.

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e.g. Mr. X sends a letter of offer to Y on August 5 which may reach Y

on August 10. Y post his latter of acceptance on August 15 which
may comes to knowledge of X on August 20.
Offer said to be made on = August 10
Offer said to be accepted for Y on = August 15
Offer said to be accepted for X on = August 20
Position of time gap between August 15 to August 20 = This time is
available for Y to withdraw his acceptance.
3.Communication for Revocation
Sec 5 provide rule about revocation of offer and acceptance. It
states:
A proposal may be revoked at any time before the communication of
its acceptance is complete from acceptor as against the proposer,
but not afterward.
An acceptance may be revoked at any time before the
communication of the acceptance is complete as against the
acceptor ,but not afterward.

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 Loss of letter of Acceptance in the Postal transit

Acceptance is complete as against Offeror as soon

as the letter of acceptance is posted. The contract
is completed even if the latter of acceptance lost in
the post.
But it is important that the latter of acceptance is
correctly addressed, sufficiently stamped and
posted.

Contract over telephone or telex or oral

communication

The offeree must make sure that his acceptance is

properly received i.e. heard and understood by the
Offeror.

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When does an offer come to an end?

An offer come to end by Two Revocation or lapse and
Rejection of Offer.
A. Revocation or lapse or Withdrawal of Offer (Sec.6)
1.By communication of notice of revocation by Offeror
before its acceptance is completed against him
2. By lapse of time
3. By non-fulfillment of condition by offeree
4.By death of Offeror
5. If counter offer is made
6.If Offer is not accepted according to prescribed mode
7.If law is change
B. Rejection of Offer by Offeree
1. Express Rejection i.e. by words written or spoken
2.Implied rejection
-when offeree make counter offer
-When offeree make conditional acceptance
-Not following prescribed time