Jai Narayan vyas university

Jodhpur
Faculty of law

SESSION = 2019-20
SUBJECT = LAW OF CONTRACT 1
TOPIC = PROPOSAL OR OFFER

SUBMITTED BY SUBMITTED TO
DILIP KUMAR JANI KHUSBU CHOUDHARY
BA LLB 3RD SEM MAM’M

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 ACKNOWLDGMENT
I have taken lots of efforts in this assignment. However it
would not have been possible without the kind support of Ms
khusbu choudhary mam’m. I would like to express my sincere
thanks to her.
I m highly indebted to jai Narayan vyas university for this
guidance and constant supervision as well as for providing
necessary information regarding this assignment.
I would like to express my gratitude towards my family and
friends for their kind cooperation and encouragement which
helped me in completing my assingnment.
My thanks also goes to those people who directly or indirectly
helped me in completing my project report.

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 INDEX
CONTENT PAGE NO.

Introduction 4

Meaning and definition of proposal 4–5

Essential of offer 5–9

When offer comes to an end 9 – 11

Bibliography 12

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INTRODUCTION

PROPOSAL – SECTION 2(A)

While discussing the essential elements of the valid contract we observed the
first step in making the valid contract there must be the lawful offer by one
party and a lawful acceptance from the other side

Example – where A offers to sell a wrist watch to B Rs 200 and Baccepts the
offer, a contract comes into being provided other essential elements are
satisfied.

MEANING OF PROPOSAL OR OFFER

The word proposal and offer are synonymous and are used interchangeably.
When one person signifies to another his willingness to do or to abstain from
doing anything with view to obtain the assent of that other for such act or
abstinence, he is said to make a proposal

The definition reveals the following three essentials of proposal.

1 it must be an expression of the willingness to de or to abstain from doing

somthing

2 the expression of willingness to do or to abstain from doing something must

be to another person. There can be no proposal by a person to himself.

3 the expression of willingness to do or to abstain from doing something must

be made with a view to obtaining the assent of the other person to such a act or
abstinence.

Note – the person making the ‘proposal’ or the ‘offer’ is called the ‘offeror’, the
person to whom the offer is made is called the ‘offeree’, and the person
accepting the offer is called ‘acceptor’

An offer is an expression of willingness to contract on certain terms made with

the intention that it shall become binding as soon as it is accepted by the person
to whom it is addressed the ‘offree’

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ESSENTIAL OF VALID OFFER

1 an offer may be express or implied

2 an offer must contemplate to give rise to the legal consequences and be

capable of creating legal relation’

3 the terms of offer must be certain, definite that is not the loose or vague.

4 an invitation to make an offer is not the valid offer

5an offer may be specific or general

6 an offer must be communicated to the offeree

7 an offer should not contain a term the nonconformity of which would amount
to acceptance

8 an offer must be made subject to any terms and conditions

9 two identical cross-offers do not make a contract

10 the answer to question is not the valid offer

11 the terms and condition of the offer must not be misrepresented to offeree

Now we will discuss all the essential one by one in detail and these are as
follows

1 An Offer May Be ‘Express’ or ‘Implied’

An offer may be made either by words or by conduct. A offer that is expressed

by words, written or spoken is called the express offer. One which is inferred
from the conduct of the person or the circumstances of the case is called the
implied contract.

Example –

1 mintu says ti Naveen that he will sell hus cycle to him for rs 1000. Thus it is
an express offer

2 the rajasthan transport corporation runs buses on the different routs to carry
passengers at the scheduled fares. This is an implied offer.

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2 An Offer Must Contemplate To Given Rise To Legal Consequences And
Be Capable Of Creating Legal Relation

If the offer does not intend to give rise to legal consequences, it is not a
valid offer in the eye of law.

NOTE:- In social agreement or domestic arrangements the presumption is that

the parties do not intend legal consequences to follow the breach of agreement.
But in the case of agreements regulating business transactions the presumption
is just the other way. In business agreements it is presumed that parties intend
legal consequences to follow.

Illustration:-

(i) an offer to a friend to dine at the offeror’s place, or

(ii) An offer to one’s wife to show her a movie is not a valid offer because such
agreements cannot give rise to a binding agreement, even though it is accepted
and there is consideration.

3. The Terms Of The Offer Must Be Certain, Definite i.e. Not Loose Or
Vague:

If the terms of the offer are not definite and certain, it does not amount to a
lawful offer. Thus, unless all the material terms of the contract are agreed there
is no binding obligation. Thus, an agreement to agree in future is not a contract,
because the terms of agreement are uncertain as they are yet to be settled.

Illustration:-

(i) Anil purchased a horse from Yogita and promised to buy another, if the first
one proves lucky. Anil reused to buy the second horse. Y connot enforce the
agreement it being loose and vague.

NOTE:- If the terms of the offer are capable of being made certain, the offer is
not regarded as vague.

4. An Invitation To Make Offer Is Not An Offer:-

An offer must be distinguished from invitation to receive offer. In the case

of ‘invitation to receive offer’ the person sending out the invitation does not
make an offer but only invites the other party to make an offer/ his object is to
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merely circulate information that he is willing to deal with anybody who on
such information, is willing to open negotiations with him. Such invitations are
therefore not offers in the eye of law and do not become agreements by their
acceptance.

NOTE:- An invitation to offer aims at bringing the customer closer to the

advertiser to start negotiations.

Difference Between Invitation To Offer and Offer:-

MATTER INVITATION TO OFFER OFFER

MEANING The person sending out the When one party (the
invitation does not make an offer offeror) makes a definite
but only invites the other party to proposal to another party
make an (the offeree)
WILLNGNESS It expresses initial intention. It expresses final
willingness
EXAMPLE Issue of prospectus by the Application filled in by
company inviting applications prospective applicants to
the Company

Illustration:-

An advertisement for sale of goods by auction dose not amount to

an offer to hold such sale. It merely invites offers. Actual bids made at auction
are ‘offer’, each higher bid superseding the provious one, and when the hammer
galls on the highest bid, there is an acceptance and the conract becomes
complete.

NOTE:- A notice that goods will be sold by ‘tender’ does not amount to an
offer. Those who apply for tender by submitting their tenders make offers and it
is for the party inviting tenders to accept them or not.

5 An offer May Be Specific or General

An offer is said to be specific when it is made to the definite person or persons.

Such an offer can be accepted only by the person or persons to whom it is made.

On the other hand, an offer which is made to the world at large or public in
general and may be accepted by any person who fulfils the requisite conditions.

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CASE:- Carbolic Smoke Ball Corporation Ltd

The compony issued an advertisement in which the company offered to pay the
dollar 100 to any person who contracts influenza, after having used their smoke
balls three times daily for the weeks, according to the printed directions. Mrs.
Chill, on the faith of the advertisment bought and used the balls according to the
directions but neverthless subsiquently suffered from the influenza. She sued
the compony for the promise reward. The compony was held liable.

6 An Offer Must Be Communicated To The Offeree

An offer is effective only when it is communicated to the offeree. Until the offer
is made known to the offeree, there can be no offer and acceptance.

CASE:- Lalman Shukla V/S Gauri Dutt

In this case the defendents’s nephew absconded from the house. He sent his
servent, the plaintiff, in search of the boy. After the servent had left, the
defendant announced the reward of the rs 500 to anybody giving information of
the boy. Servent, before seeing the announcment, he traced the boy and
informed the defendant. Later on reading the norice of reward the servent
claimed it. His suit was dismissed on the ground that he could not accept the
offer, unless he had knowledge of it.

Offer must Communicte The Special Terms

1 if the accepter or the promosee had no knowledge of the special terms, befor
or at the time of contract, they are not binding on the accepter.

Case Law:- handerson V/S stevenson

2 if the acceptor or the promisee had no knowledge or may be presumed to hve

the knowledge of the special terms befor or at te time of the conract, because a
reasonably sufficient notice has been given him by the suitable words document
the terms are binding upon the acceptor whether he has read the terms or not.

Case Law:- Parker V/S South Eastern railway corporation

3 again where the terms are printed in a language that the accetor does not
understand, he can not set up this fact as a reason for not being bound by the
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terms, but his attention should be drawn to them by suitable words on the
document. It is accepters duty to ask for thetranslation of the terms stated in the
contract clause befor he acctually accepts the offer and if he does not ask, he
must suffer for the ifnorance.

7 An Offer Should Not Contain A Term That The Nonconformity of The

offer Would Amount to acceptance

An offeror cannot say that if acceptance were not communicated up to a certain

date the offer would be presumed to have been accepted. If the offeree does not
reply, there is no contract because no obligation to reply can be imposed on
him.

8 An Offer Can Be Made Subject To Any Terms And Conditions

As offeror must attach the terms and conditions to the offer he makes. He may
even prescribe the mode of the acceptance. The offeree will have to accept the
terms of the offer. There is no contract unless all the terms of the offer are
complied with and accepted in the model prescribed.

9 Two Identical Cross-offers Do Not Make A Cntract

When two parties make identical offer to each others, in ignorance of each
other’s offeror due to no knowledge of eavh other’s offer the offers are called
cross-offer. Cross-offer do not constitue acceptance of ones offer by the other
and as such there is no completed agreement.

10 The Answer To The Question Is Not An Offer

The terms of the offer should be clear so that there is no confusion whether it is
valid offer or an answer to a question. An answer to a question cannot be taken
as an offerer

11 The Terms And condition Of Offer Must Not Be Misrepresented To

Offeree

The offeree must be given and made understood all the terms and conditions
clearly without ambiguity and the terms must be legible.

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WHEN DOES THE OFFER COMES TO AN END

1 An offer lapsed by the stipulated or reasonable time.

2 An offer lapse by not being accepted in the mode prescribed

3 An offer lapesed by rejection

4 An offer lapses by the death of insanity of the offeror or the offeree befor
acceptance

5 An offer lapsed by revocation

6 An offer lapses by subsuquent illigality or destruction of subject matter

Now se will discuss all one by one and these are as follows

1 An Offer Lpses After Stipulated Or Reasonable Time

An offer lapses if the acceptance is not communicated within the time

prescribed in the offer, or if time is prescribed, within a reasonable time.

The reasonable time depend on the fact or the circumstances of the contract

2 An Offer Lpses By Not Being Accepted In The Mode Prescribed Or If No

Mode Is Prescribed In Some Usual And Reasonable Manner

If the offeree does not accept the offer of according to the mode prescribed, the
offer not lapse automatically. It is for the insist that his proposal shall be
accepted only in the prescribed manner and if he fails to do so he is deemed to
have accepted the acceptance done in any other mode which is otherwis
ereasonable.

3 An Offer Lapses By Rejection

An offer lapses if the offree has rejected it. The rejection may be express that is
by words spoken or written or implied.

A Where either the offeree makes a counter offer

When an offree offers to accept the offer of the offeror, subject to some
modification the offer of the offree is called the counter offer. It also amounts to
implied rejection of the original offer.

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B Where The Offree gives A conditional Acceptance

When an offree offers to accept the offer of the offeror, subject to some more
new conditions, the offer of the offree is called conditional acceptance. It also
amounts to implied rejection of the orginal offer.

Case Law:- Hyde V/S Wrench

Note:- the counter offers results in a new offer which may be accepted or
rejected by the other party(original offeror). If the other party accepts it, the
contract is said to be concluded

4 An Offer Lapses By The Death Or Insanity Of The Offeror Or The

Offeree Befor Acceptance

Death of offeror: if the offeror dies or become insane befor the acceptance, the
offer lapses provided that the fact of his death or insanity comes to the
knowledge of the acceptor befor acceptance

Death of offeree: an offeree’s death or insanity befor accepting the offer puts
an end to the offer and his heirs cannot accept for him

5 An Offer Lapses By Revocation

An offer is revojed when it is withdrawn by the offeror. An offer may be

revoked,, at the time before acceptance, by the communication of notice of
revocation by the offeror the other party.

6 Revocation By Non-Fulfillment of A Condition Prior To Acceptance

An offer stands revoked if the offree fails to fulfill a condition precendent to

acceptance

7 An Offer Lapses by Subsequent Illegality or Destruction of Subject

Matter

An offer lapses if it becomes illegal after it is made, and before is accepted. In

the same manner, an offer may lapse if the thing, which is the subject matter of
the offer, is destroyed or substantially implied before acceptance.

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BIBLIOGRAPHY

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