OFFER AND
ACCEPTANCE
LEGAL RULES AS TO OFFER
Offer must be such as in law is capable of
giving rise to legal relationship
A social invitation does not create a legal
relationship even if it is accepted
Terms of offer must be definite
If
the terms of offer are vague it acceptance
cannot create a contractual relationship.
A says to B, I will sell you a car. A owns 3 cars.
The offer is not definite.
An offer may be distinguished from:A
declaration of intention or announcement.
An offer would be made in future.
Eg:- An auction/concert
An auctioneer advertised in a newspaper that a sale of
office furniture would be held. A broker came from a
distant place to attend that auction, but all the
furniture was withdrawn. The broker sued the
auctioneer for his loss of time and expenses. Held a
declaration of intention to do something is not
binding.
An
invitation to make an offer.
Display of goods in a shop is not an offer, it is an
invitation to the public to make an offer.
Offer must be communicated.
Unless
an offer is communicated, there can be no
acceptance to it.
An acceptance of the offer in ignorance of the offer is
no acceptance and do not give any right to acceptor.
S offered a reward to anyone who returned his lost dog.
F brought the dog to S without having heard of the
offer. Held F was not entitled to the reward.
Offer must be made with a view to obtain the
assent.
Offer should not contain a term the non
compliance of which may be assumed to amount to
acceptance.
It
cannot be said that an acceptance not communicated
the offer would be accepted.
A writes to B I will sell you my horse for 50000 and if
you do not reply, I shall assume you have accepted the
offer. there is no contract If B does not reply. As B is
under no obligation to speak.
If B is in possession of As horse at the time offer is made and
he continues to use the horse then the result would be
different.
A statement of price is not an offer.
A
will you sell me your pen? Send the lowest price
B- lowest price is Rs. 1000
A- we agree to buy for the sum stated by you.
LEGAL RULES AS TO ACCEPTANCE
It must be absolute.
Material/
immaterial ,major / minor , consenses etc.
A made an offer to B to purchase a house with possession
from 25 july. The offer was followed by an acceptance
suggesting possession from 1 aug. held there was no
contract.
A says to B I offer to sell my car for Rs. 50000. B replies I
will purchase it for 45000.held no acceptance is there
It must be communicated to the offeror
Acceptance
must be communicated in some prescriptable
form.
F offered to buy his nephews horse for $30. the nephew
did not write to F but told his auctioneer who was selling
his horse not sell it as it had been sold to his uncle. The
auctioneer sold the horse, held F had no right of action as
his offer was never accepted.
It must be according to the mode prescribed
If
the acceptance is not as per the mode prescribed
the offeror may intimate it. If not it is deemed to be a
valid acceptance.
makes an offer to B if you accept the offer reply by a
mail. B sends the reply by post. it will be a valid
acceptance unless A informs B that it is not as per the
prescribed mode.
It must be given within reasonable time.
It cannot precede an offer.
It cannot be implied with silence.
It must be given by the party to whom the offer is
made
WHEN DOES AN OFFER COME TO AN
END ( REVOCATION)
By lapse of time
S
offered to sell wool to B on Thursday and agreed to give
him 3 days time to accept it. B accepted the offer on
Monday, but by the same time S had sold the wool. Held the
offer lapsed
By non fulfilment by the offeree of a condition
precedent to acceptance
S
a seller agrees to sell certain goods subject to a condition
that B the buyer pays agreed price before a certain date. If
B fails to pay the price by the date, the offer stand revoked.
By communication of notice of revocation by offeror
before its acceptance
At
an auction A makes the highest bid. He withdraes his bid
before the fall of the hammer.
By death or insanity
If a counter offer is made
W
offered to sell farm to H for 1000. H offered 950. W
refused the offer. Subsequently H agreed for 1000. held
there was no contract as the original offer was
rejected.
If offer is not accepted in the prescribed mode
TIME FOR REVOCATION
A proposal may be revoked at any time before the
communication of its acceptance is complete as
against the proposer
An acceptance may be revoked at any time before
the communication of acceptance is complete as
against the acceptor.
A
proposes by a letter sent by post to sell his house to B.
the letter is posted on 1st. B accepts the proposal by a
letter sent by post on $. The letter reaches A on 6.
A may revoke his offer at any time before B posts his letter of
acceptance i.e 4
B may revoke the acceptance at any time before the letter
reaches A i.e 6
