Business And Industrial Law

Created By Rafay Iftikhar

Chapter 2

Offer And Acceptance

OfferOffer/Proposal

A Proposal / Offer is defined as "when one person signifies to another his willingness to do or to abstain from doing anything, with a view of obtaining the assent of that other to such act or abstinence, he is said to make a proposal."

Essential Elements Of Offer1. Acceptance of the other party :

An offer is complete as soon as it is accepted by the person to whom it is made.

2. Legal Intensions :When an offer is accepted it must

create a legal relationship between parties otherwise it is counted as mere or social promise which can not be enforced.

3. Clear And Definite Terms : The terms of offer must be

definite, unambiguous and certain or capable of being made certain.

4. Communication Of The Offer : A valid offer is constituted as soon

as its communication is complete i.e. when it comes to the knowledge of the offeree.

5. Non-Compliance Of The Terms :Offer should not contain terms the

non-compliance of which would amount to acceptance.

Kinds of Offer

Express When an offer is expressed by

words spoken or written it is termed as an express offer.Implied

Implied offer means an offer made by conduct.

OffereeTo Whom offer is madeAn offer may be made to1. A particular person2. A particular group or body of persons3. The public at large i.e. whole world

Types Of OffersSpecific Offer

An offer made to a definite person or body of persons General Offer

When an offer is addressed to the whole world , it is called general offer.

Termination Of OfferAn offer lapses after stipulated or reasonable time.1. An offer lapses by the death or insanity of the

offeror or the offeree before acceptance. 2. An offer lapses on rejection.

3. An offer terminates when revoked.4. It terminates by counter-offer.5. It terminates by not being accepted in the

mode prescribed or in usual and reasonable manner.

6. A conditional offer terminates when condition is not accepted.

RevocationRevocation Of Offer :

An offer can be revoked at any time before it comes to the knowledge of offeree / acceptor.

1. By notice of revocation.2. By lapse of time.3. By non-fulfillment of condition precedent.4. By death or insanity.5. By counter offer.6. By the non-acceptance of offer acc. to the

prescribed or usual mode.7. By the subsequent illegality.

AcceptanceAcceptance :

when the person to whom the proposal is made signifies his willingness to be bound by terms of offer, the proposal is said to be accepted.

Essential Elements Of the Acceptance1. Communication Of The

Acceptance : A valid acceptance is

constituted when its communication is complete i.e. when it comes to the knowledge of the offerer.

2. Time For Acceptance : A valid acceptance is

constituted when it is made within a described time or if not specified than in a reasonable time.

3. Mode Of Acceptance :Acceptance must be according to the

mode prescribed. Only by the person to whom the proposal is made.

4. Acceptance By Silence : Acceptance can’t be implied or

presumed from silence.

5. Acceptance Before Revocation : Acceptance must be given before the

offer lapses or before the offer is revoked.

6. Mere Acceptance : Acceptance must be absolute and unqualified/

unconditional.

Revocation Of Acceptance : Acceptance of a proposal may be

revoked at any time before the communication of acceptance is complete as against the acceptor but not afterwards. The acceptance is binding on the acceptor when the letter of acceptance actually reaches the proposer.

Revocation

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Created By Rafay Iftikhar