IGNOU SOLVED ASSIGNMENTS

Offer (i.e. Proposal) [section 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 other person either to such act or abstinence, he is said to make a proposal. To form an agreement, there must be at least two elements – one offer and the other acceptance. Thus offer is the foundation of any agreement.

“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 other to such act or abstinence, he is said to make a proposal.”  The person who makes an offer is called “Offeror” or “ Promisor” and the person to whom the offer is made is called the Offeree” or “Promisee”.

Example: Mr. A says to Mr. B, “Will you purchase my car for Rs.1,00,000?” In this case, Mr. A is making an offer to Mr. B. Here A is the offeror and B is the offeree.

To Whom and How an offer is made?

An offer may be 'specific' or 'general'. When an offer is made to a definite person or a particular group of person, it is known as specific offer and it can be accepted only by that definite person or that particular group of persons to whom it is made, if an offer which is not made to a definite person, but to the world at large or public in general, it is called a general offer.

A general offer can be accepted by any person by fulfilling the terms of the offer. Offers of reward made by way of advertisement for finding lost articles are the most appropriate example of a general offer. For example, B issues a public advertisement to the effect that he would pay Rs. 100 to anyone who brings back his missing dog.

When the contracting parties are face to face and negotiate in person, there is instantaneous communication of offer and acceptance, and a valid contract comes into existence the moment the offeree gives his absolute and unqualified accep­tance to the proposal made by the offeror. The question of revocation of either offer or acceptance does not arise, for, in such cases a definite offer is made and accepted instantly at one and the same time.

But where services of the post office are utilized for communi­cating among themselves by the contracting parties because they are at a distance form one another, it is not always easy toascertain the exact time at which an offer or /and an acceptance is made or revoked.

Rules as to Offer

1. Intention to create legal relationship: The Offeror while making the offer must do it with the intention to create legal relations. Offeror must be conscious that a contract will arise, if the Offeree accepts the same.

2. Certain or Unambiguous: The terms of the Offer to be valid must be certain, clear and unambiguous.  For e.g. A offers to sell B, ten tones of oil. A is a dealer of various oil. Here the offer is ambiguous as the offer does not specify the type of oil. However, if A was a dealer only in Parachute Coconut oil then the offer is unambiguous.

3. Offer must be distinguished from:

(i) A declaration of intention:  A declaration by a person that he intends to do something gives right of action to another. Such a declaration only means that an offer will be made or invited in future and not that an offer is made now.

(ii) An invitation to make an offer or do business: 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 prices. A buyer, in case the prices of the goods are marked, cannot force the seller to sell the goods at those prices. He can, at the most, ask the seller to sell the goods to him, in which case he is making an offer to the seller and it is up to the seller to accept the offer or not. Likewise, quotations, menu card, catalogues, prospectus issued y a company for subscribing to shares are all example of an invitation to make an offer.

4. Offer must be to a definite person: The words of an Offer must apply to definite persons or class of persons to create a legal relationship.

5. Offer must be communicated: An offer, to be complete, must be communicated to the person to whom it is made. Unless an offer is communicated, there can be no acceptance of it. 

6. Offer must be made with a view to obtaining the assent: The offer to do or not to do something must be made with a view to obtaining the assent of the other party addressed and not merely with a view to disclosing the intention of making an offer.

7. Special Terms to be made clear in the Offer: The offer may be conditional but the conditions or special terms must be clearly communicated in the offer. Whenever an offer has special terms attached to it, these special terms and conditions must be effectively communicated to the Offeree to bind him.

8. Offer should not contain a term, the non-compliance of which may be assumed to amount to acceptance:  A person cannot say that if acceptance is not communicated within a certain time, the offer would be considered as accepted. For e.g. A writes to B, “I will sell you my horse for Rs.500, and if you do not reply, I shall assume you have accepted the offer,” if B does not reply there is no contract. The promise has to expressly convey his/her acceptance.