Chapter 2
Offer and Acceptance
1–1
The Indian Contract Act,1872
• Section 2(a) of the Indian contract act defines
“Offer as when one person signifies to another his
willingness to do or to abstain from doing something
with a view to obtaining the assent of other, such
act or abstinence is said as a proposal.”
three essentials of a "proposal:
(1)It must be an expression of the willingness to do or to
abstain from doing something
(2)The expression of willingness to do or to abstain from doing
some- thing 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
some-
thing must be made with a view to obtaining the assent of the
other person to such act or abstinence. 1–2
Legal rules regarding valid
offer
• An offer may be express or implied
• It should give rise to legal consequences and be capable of
creating legal relations
• The terms of the offer must be certain. an agreement to
agree in the future is not a contract, because the terms of
the agreement are uncertain as they are yet to be settled
• An offer can be made subject to any terms and conditions.
• It should be made with the intent to obtain the assent
of the other party
• An offer should not contain a term the noncompliance of
which would amount to acceptance.
• Two identical cross-offers do not make a contract.
• An invitation of offer is not an offer
1–3
Invitation to offer
• Display of goods by a shopkeeper in his window, with
prices marked on them, is not an offer but
merely an invitation to the public to make an
offer to buy the goods at the marked the prices.
• A sees an article marked ‘price rupees twenty’ in B’s
shop. He offers B Rs20 for the article. B refuses to
sell saying the article is not for sale. Here A cannot
force B to sell him the article at Rs20. Marking of price
of an article amounts to an invitation to offer and
not an offer
1–4
Lapses and revocation of
Offer
• An offer lapses after stipulated or reasonable
time
• An offer lapses by not being accepted in the
mode prescribed
• An offer lapses by rejection
• An offer lapses by the death or the
insanity of the offeror or the offeree before
acceptance
• An offer lapses by revocation before
acceptance
• An offer lapses by subsequent illegality or 1–5
When communication is
complete
• Communication of offer (sec 4 para 1)-
The communication of offer is complete when it
comes to the knowledge of the person to whom is
made.
•Communication of acceptance (sec 4 para 2)-
As against the proposer, it is put into the 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 proposal.
1–6
Time of revocation
of offer and acceptance(sec5)
• Revocation of offer (sec5 para1)- A proposal may
be revoked at any time before the
communication of its acceptance is complete as
against the proposer but not afterward.
•Revocation of acceptance (sec5 para2)- An
acceptance may be revoked at any time before
the communication of the acceptance is complete
as against the acceptor, but not afterward.
1–7
Example
• A proposes by a letter sent by post to sell his
bike to B. the letter is posted on the 1st of the
month. B accept the proposal by a letter sent
by post on the 4th. The letter reaches A on 6th
• A may revoke his offer at any time before B
post his letter of accpetance i.e 4th but
not afterwards.
• B may revoke his acceptance at any time
before the letter of acceptance reaches A i.e
6th but not afterwards.
1–8
Types of offer
• General & specific
offer
• Express & implied
offer
• Positive & negative
offer
• Cross offer
1–9
General and Specific offer
• General offer made to the whole world
at large but Specific offer made to
some specific person.
•General offer can be accepted by any
person having notice of the offer by
doing what is
required under the offer but Specific
offer can be accepted only by person to
whom it was made. 1–10
Express & Implied offer
• An express offer is one which may be made
by words spoken or written such as letter,
email, etc.
• An implied offer is when an offer is implied
from the conduct of a person, it is called
implied offer. for example: When a
transport company runs a bus on a
particular route, there is an implied offer by
the transport company to carry
passengerd for a certain fair.
1–11
Positive & Negative offer
• A person may express his willingness to do
something or to abstrain from doing
something.
• e.g it may be an offer to constuct a wall to
provide privacy or not to construct a wall so
that free passage of light and air may not
be obstucted.
1–12
Cross offer
Two offers which are similar in all respects
made by two parties to each other, in
ignorance of each other’s offer are known as
‘cross offers’.
1–13
Case Study
1–14
Case Study
Carbolic smoke ball company advertised in the
newspaper that whoever would take smoke balls,
manufactured by it, according to the printed
instructions would not contract influenza. The
company offered a reward of $1000 to anyone who
contracted influenza after taking its smoke balls
according to the printed instructions. It was added
that $1000 was deposited with Alliance Bank to
show the sincerity of the Company. Mrs. Carlill used the
smoke balls according to the directions given but
contracted influenza. It was held that the offer was a
general one, and Mrs. Carlill had accepted it by acting
according to the advertisement and therefore the
company could not get away from responsibility by
saying that it was a mere puff. 1–15
ACCEPTANCE
• Section 2(b) states that A proposal
when the person to whom the
proposal is made signifies his assent
thereto the proposal is said to be
accepted
1–16
Legal rules regarding
Acceptance
• Acceptance must be given only by the
person to whom the offer is made
• Acceptance must be absolute and
unqualified
• It should be communicated by the
acceptor
• It should be given within a reasonable
time or time stipulated
• Acceptance must succeed the offer.
1–17
Case Study 2
• Abul says in conversation with Babul that
he will give Tk.10,00,000 to a person who
marries his daughter. Mofiz marries Abul’s
daughter and files a suit to recover Tk.
10,00,000.will he succeed?
1–18
Solution
• No , Abul has expressed his wish only ,and
has never made an offer with a view to
obtaining the assent of the other party.
•Secondly there was no offer to Babul or
Mofiz. It was neither general offer nor
specific offer.
1–19
