For an agreement

There has to be a clear by one person and,

and definite offer

Its unconditional acceptance by the person to whom the offer is made.

An offer is a proposal by one party to another to enter in to a legally binding agreement with him. Person making offer offeror, proposer promisor To whom it is made offeree, promisee, acceptor.

Section 2 (a) When one 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, he is said to make a proposal  Expression must be to another person ( at least 2 person are required )  Expression must be made to get the assent of another.

Offer may be express (spoken or written words) or implied. (inferred from conduct)

Offer may be general and specific ( Carlill v. Carbolic Smoke Ball Co.(1893)contracting influenza) Where an offer is made to the world at large, any person with notice of the offer may accept the offer. And when the offer is accepted, there is a contract between the two.

Carlill v C. Smokeball Co. (1893) In this case the carbolic smoke ball co. issued an advt. in which the co. offered to pay 100 pound to any person who contact influenza, after having used their smoke balls three times daily for two weeks. Acc. to the printed directions Mrs. Carlill on the faith of advertisement bought & used the balls acc. to the directions, but she subsequently suffered from influenza. She sued the co. for the promised reward . The company was held liable.

Intention of offeror to be part of it His willingness or act of abstaining Definite Communicated to the offeree

An offer must be made with the intention to create legal relation offer for social activities is not a valid offer.

The terms of the offer must be certain and not loose & vague An agreement to agree in future is not a contract. Eg. Diff cars, house on lease with renovation BUT already mentioned- cant refuse (Foley v. Classique Coaches)

2. It should be distinguished from:a. Declaration of intention and announcementOnly means offer will be made in future and not now. An advertisement for an auction sale does not even bind the auctioneer to hold the auction ( Bidders have no right to sue ) Harris v Nickerson or father in law, beauty comp, scholarship. b. An invitation to make an offer is not an offerQuotations , prices on display goods (not an offer but a invitation to the public to make an offer to buy the goods at the marked prices))

An offer must be communicated to the offeree Until the offer is made known to the offeree, there can be no acceptance & no contract. Example : A, without knowing that a reward has been offered for the arrest of a particular criminal, catches the criminal & gives the information to the superintendent of police. A, cannot recover the reward as he cannot be said to have accepted the offer when he was not at all aware of it. Lalman v Gauri Dutt

A statement of price is not a offer ( Harvey v. Facey.(1893) Harvey: Will you sell us your Bumper Hall pen? Telegraph lowest cash price. Facey: lowest price for Bumper Hall pen 900 pound Harvey: We agree to buy, Bumper Hall pen for the sum of 300 pound asked by you.

Offer must be made with the view to obtaining the assent (not merely with a view to disclosing the intention of making an offer) Offer should not contain a term the non compliance of which may be assumed to amount to acceptance. ( A writes to B, I will sell you my horse for Rs. 5000 and if you do not reply, I shall assume you have accepted the offer)

If the acceptor or the promisee had no knowledge of special terms, before or at the time of the contract, they are not binding upon the acceptor. But should be bought in NOTICE. Eg Hotel Conditions P deposited his bag at the cloak room at a railway station & received a ticket containing on its face the words see back. On the back of the ticket there was a condition that, the co. would not be responsible for any package exceeding the value of 10 pound unless extra charge was paid.

A notice to the same effect was hung up in the cloak room. Ps bag was lost & he claimed the actual value of the lost bag 24 pound. P admitted knowledge of the printed matter on the ticket, but denied having read it. It was held that, even though he had not read the exemption clause, he was bound by it, as defendants had done what was reasonably sufficient to give him notice of its existence & therefore P was entitled to recover only 10 pound.

Where special terms are printed in a language which the acceptor does not understand it is his duty to ask for the translation the terms before he accepts the offer

When two parties make identical offers to each other in ignorance of each others offer

Tender as a definite offer- goods & services Tender as a standing offer (continuing offer)

Section 2 (b) When the person to whom the proposal is made signifies his assent thereto, the proposal is said to be accepted. Express acceptance spoken or written Implied acceptance by doing any act for which a reward has been declared (in an auction, by striking the hammer)

 

Acceptance of particular offer by particular person (Boulton v Jones) Acceptance of general offer by anyone who has accepted that offer (Carlill v. Carbolic Smoke ball co.)

Acceptance must be absolute & unqualified .( not conditional, consensus ad idem ) Acceptance must be communicated (Felthouse v. Bindley- nephew, horse, 1862) Acceptance must be expressed in some usual or reasonable manner, unless the proposal prescribes the manner in which it is to be accepted- if not informed, deemed to be accept the acceptance contd.

If the mode is prescribed follow it Acceptance must be communicated within a reasonable time & before offer lapses or is revoked. It can not precede the offer. It must show an intention on the part of the acceptor to fulfill terms of the promise. It must be given by the offeree to whon offer is made. It must be given before the offer lapses or before the offer is withdrawn. It can not be implied from silence.

Communication of offer is complete when it comes to the knowledge of the party to whom it is made. (Section 4 para 1) Communication of acceptance is complete as against the proposer when it is put into a course of transmission to him, so as to be out of the power of the acceptor; as against the acceptor when it comes to the knowledge of the proposer. (Section 4 para 2)

Communication of revocation is complete : as against the person who makes it, when it is put into a course of transmission to the person to whom it is made, so as to be out of the power of the person who makes it; as against the person to whom it is made, when it comes to his knowledge. (Section 4 para 3)

Time for Revocation of Proposal (Sec. 5 para 1):

A proposal can be revoked at any time before the communication of its acceptance is complete as against the proposer, but not afterwards.

Time for Revocation of Acceptance:

An acceptance can be revoked at any time before the communication of the acceptance is complete as against the acceptor, but not afterwards. Example: A proposes by a letter sent by a post to sell his house to B. The letter is posted on the 1st of the month. B accepts the offer by a letter sent on the 4th. The letter reaches A on 6th. A may revoke his offer at any time before B posts his letter of acceptance, i.e., 4th but not afterwards. B may revoke his acceptance at any time before the letter reaches A, i.e., 6th, but not afterwards.

By communication of notice of revocation by offeror at any time before its acceptance is complete as against him. By lapse of time if not accepted within prescribed time. By non fulfilment by the offeree of a condition precedent to acceptance. By death of the offeror provided the offeree comes to know of it before acceptance. If a counter offer is made to it. If an offer is not accepted according to the prescribed or usual mode. If the law is changed.

 1. 2.

Expressed Rejection Implied Rejection: When a counter offer is made. When acceptance is conditional.