SECTION 3 OFFER
Offer / Proposal
1.MEANING OF OFFER [Sec.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 –
To such act: or
Abstinence,
He is said to make a proposal (i.e., Offer).
2.HOW TO MAKE AN OFFER?/MODE OF MAKING OFFER (Sec.9)
| Express offer | It means an offer made by words spoken or written. |
| Implied offer | It means an offer inferred by – |
| i) The conduct of a person: or | |
| ii) The circumstances of the case. |
3. TO WHOM AN OFFER IS MADE?
| Specific Offer | It means an offer made to- |
| (a) A particulars person; or | |
| (b) A particulars group of persons. | |
| General Offer | Its means an offer which is made to the public in general. |
4.LEGAL RULES AS TO VALID OFFER
| Offer must be communicated | Boulton V Jones |
| • J offered to purchase 50 feet of leather from Z. | |
| • Z in the meantime sold his business to B. | |
| • Therefore, Instead of Z, B Supplied the leather to J. | |
| • J refused to accept the leather. | |
| • It was held that offer was not communicated to B, and so B had no legal right to accept the offer made by J. | |
| • Therefore, no contract had concluded between J and B. | |
| Carlill v Carbolic Smoke Ball Co. | |
| • A pharmaceutical company advertised that it would give 100 pounds to anyone who contracted influenza after using their smoke balls for a certain period | |
| • Mrs. Carlill purchased smoke balls and used them as directed. | |
| • Shortly afterwards, she contracted influenza. She claimed the 100 pounds. | |
| • The court held that the advertisement issued by the pharmaceutical company was general offer made to the public at large. | |
| • Mrs. Carlill, being a member of the public, had received the offer and had acted upon it by using the smoke balls as directed. | |
| • Therefore, a contract was formed between the pharmaceutical company and Mrs. Carlill, and Mrs. Carlill could claim 100 pounds. | |
| Lalman Shukla v Gauri Dutt. | |
| • G’s nephew was missing | |
| • L, who was minim of G, went in search of the missing boy. | |
| • Meanwhile G issued handbills offering reward of Rs. 501 to anyone who would trace the boy | |
| • L found the boy and brought him home. | |
| • Since L had no knowledge of the offer made by G. he could not accept such offer | |
| • Since there was no acceptance, there could be no contract, and therefore, its was held that L was not eligible to receive the reward. |
| Communication of complete offer | Handerson v Stevenson |
| • X purchased a steamer ticket for traveling from Dablin to white haven. | |
| • On the back of the ticket, certain conditions were printed. One of the condition excluded the liability of the company for any loss, injury or delay to the passengers or their luggage. | |
| • X never looked at the back of the ticket and there was nothing to draw his attention to the conditions printed on the back side. | |
| • X’s luggage was lost due to the negligence of the servants of the shipping company. | |
| • Since the steamer company had not taken any seps to ensure that the condition printed on the back of the ticket were brought to the knowledge of the passengers, such condition do not form part of the contract. | |
| • Therefore, X was entitled to recover the damages for loss of his luggage. | |
| Parker v S.E.Rail Co. | |
| • P deposited his bags in the cloakroom at a railway station. | |
| • It was held that the disclaimer clause was binding on P since the railway `company had taken all reasonable steps to ensure that the the conditions printed on the back were brought to the knowledge of P. |
| An offer must not thrust the burden of acceptance on the transferee | An offer must not contain any term the non-compliance of which amounts to thrust the burden of acceptance |
| Felthouse v Bindley | |
| • A wrote to BI will sell you my horse for Rs. 500, If I do not receive a reply by Sunday next, I shall assume that you have accepted the offer” | |
| • B did not reply | |
| • It was held that an offer can not impose the burden on the offeree to reply. Acceptance is valid only if it is communicated to the offeror | |
| • Since B had not communicated his acceptance to A, there was no contract between A and B, and therefore A could not sue B. |
| Cross offers do not Counter 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 Cross offers do not conclude a contract |
| Counter offer | A counter offer amounts to rejection of the original offer |
| Offer must be distinguished from invitation to offer | An invitation to offer does not imply a valid offer |
| Offer must be distinguished from declaration of intention | A declaration or a statement merely indicates that an offer will be made invited in future |
| An offer must be certain | The terms of the offer must be |
| (a) Definite | |
| (b) Unambiguous; and | |
| (C) Certain |
5.LAPSE OF AN OFFER
| Notice by offeror, i.e., Revocation | • Revocation of offer means withdrawal or cancellation of the offer. |
| • An offer can be revoked by the offeror anytime. However, revocation effective only if it is made before the offer is accepted | |
| Lapse of time | An offer lapses if it is not accepted |
| – Within the time specified in the offer | |
| – Within reasonable time, if no time is specified in the offer | |
| Non-fulfillment of condition precedent | If an offer requires fulfillment of some condition before the offer can be accepted, the offer shall lapse if such condition is not fulfilled. |
| Counter offer | A counter offer results in rejection of the original offer |
| Acceptance is not made in prescribed mode | If the offeree accepts the offer in a manner which is different from the manner |
| Death or insanity of the offeror or offeree | An offer shall lapse in the following cases |
| (a) Where the offeror dies or becomes insolvent and such fact comes to the knowledge of the offeree before acceptance of the offer. | |
| (b) Where the offeree dies or becomes insolvent before acceptance of the offer | |
| Rejection by the offeree | An offer comes to an end if the offeree rejects the offer and communicates his refusal to the offeror. |
| Subsequent illegality etc. | If, after making of an offer, the subject matter of the offer is destroyed or the performance becomes impossible or unlawful, the offer shall lapse |
