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Definition: When a person shows his willingness to do or not to do something to obtain the consent of other person, he is said to make a proposal or offer Example: A offers to sell his fan to B for Rs.1000. A makes an offer to B. ESSENTIALS OF a VALID OFFER: 1. It may be express or implied:An offer may be made either by words or by conduct. Express offer is made in words, spoken or written. Where the offer is made otherwise then in words is implied offer. Example: Asim says to Akram that he will sell his car to him for Rs. 5 lacs. It is an express offer. b) A railway coolie carries the luggage of B without asking to do so. B allows him to do so. It is an implied offer.

2. It must create legal relationship: There must be a legal relations b/w the parties; otherwise the contract is not valid, if offer is not valid. Example: An offer to sell his wealth to B for Rs.200 and B agrees. There is an agreement because the parties intend to create legal relations. 3. It must be definite and clear:The offer must be clear and definite because without it the offer is not valid. Example: A wants to sell his tractor to B, but A not mentions what kind of tractor, he want to sell. So, it is not a valid offer. 4. It is different from invitation to offer:An offer is different from an invitation to offer. An invitation to offer looks like offer but legally it is not offer. An invitation to offer is the person sending out the invitation to other to make an offer.

Example: Quotations, display of goods with prices, issues of prospectus by companies are example of invitation to offer. 5. Offer must be communicated to the offeror:The offer must be convey to offeror, because if offer is not communicated to offeree then it is not accepted and then not makes valid offer. Example: A losses a purse and he announced the prize of Rs. 500, who finds out it. B found the purse but was not aware about the prize and gives the purse to A. After that B know that A announced a prize of his purse, B claims the prize but he failed on the ground that he was totally unaware of the knowledge of prize. 6. Offer must not contain negative condition:The offers not have any negative condition. An offer cannot say that if acceptance is not communicated up to a certain date, the offer would be presumed to have been accepted. Example: A wrote to B sell his book adding that if he did not reply within 5 days, the offer

would be considered as accepted. There is no contract. 7. It may be specific or general:When an offer is made to a specific person or a group of persons, it is called specific offer. A general offer is one which is made to public in general. Example: A makes an offer to B to sell his house for Rs. 10 lacs, it is a specific offer. In this only B can accept this offer. B) A announces in a newspaper a reward of Rs.1000 for anyone who will return his lost radio. It is a general offer. 8. Offer may be subject to any terms and conditions:An offeror may attach any term and condition to offer, he makes and if the oferee does not fulfills the condition then offeror can reject the acceptance. Example: A asks V to send the reply of his offer by telegram but V replies by letter. Now A can reject the offer.

9. Object of offer-obtaining of assent:Object of an offer must be obtaining of assent. No valid offers can be made without this object.

Acceptance is the act of giving consent to the proposal Example: A offers to sell his car to B for Rs. 5 lacs. B agrees to purchase the car for Rs. 5 lacs. This is an acceptance. EESENTIALS OF VALID ACCEPTANCE: 1. It must be given by the offeree:When an offer is made to a particular group, it can be accepted by any member of that group. If the offer is made to a general public, it can be accepted by any member who has knowledge of the offer. An offer can be accepted only by the person to whom it is made. Example: Akram offered to sell his watch to Aslam. Asif, who was aware of the offer, said that he is ready to buy Akrams watch. There is no contract with Asif.

2. It must be absolute and unconditional:In an agreement the acceptance must be absolute and unconditional, if oferee imposes any condition in his acceptance; it is not a valid acceptance. Example: A offers to sell his horse to B for Rs.500, 000 and B replies that he can buy it for Rs. 400,000, there is no acceptance on part of B. 3. It must be in a prescribed manner:If the offeror imposed any particular manner in acceptance, then offeree must follow his manner. If there is no particular manner then acceptance should be made in a responsible manner. Example: A offers to B and ask to accept the offer by telegram. B sends his acceptance by post. It is not a valid acceptance. 4. It must be communicated to the offeror:The acceptance must be in clear form, who communicates to offeror by offeree. If the

offeree doesnt show that he has accepted the offer, no contract is formed. Example: A offers by letter to purchase B house. B expresses his intention to sell it but does not reply. B sells the house to C. A has no legal remedy against B. 5. It may be express or implied:When an acceptance is given by words, spoken or written, it is called express acceptance. When it is given by conduct or action it is called implied acceptance. Example: A wrote a letter to B to sell his cycle for Rs. 2,000. B accepted his offer and sent a letter of acceptance it is an express acceptance. 6. It must follow the offer:Acceptance must be given after receiving the offer. It should not come before the offer without an offer, no acceptance can be made. 7. It must be give within reasonable time:Acceptance must be given within the time specified by the offeror. If no time limit is

mentioned, the acceptance must be given within a reasonable time. Example: A offers to sell his car to B. B accepts the offer after six months. It is not an acceptance within a reasonable time. 8. Intention to full fill promise:Acceptance must show an intention on the part of the acceptor to fulfill terms of a promise. Where no such intention exists, the acceptance is invalid.