Offer in Contract

Offer is one of the components of agreement. It`s status is equal to that of question. Offer is otherwise known as proposal. The person who is making the offer is called offerer or promissory or proposer.

Definition of Offer

When a person signifies to another his willingness to do or to abstain from doing anything, with a view to obtaining the ascent of that other to such act or abstinence he is said to make a proposal. - Section 2 (a) of Indian Contract act.

Essentials of Offer

Offer may be General or Specific: Offers are of two types, namely specific offer and general offer. If offer is made particularly to one person, it is called specific offer. On the other hand if offer is made to a group of persons, it is called general offer. General offer also is so powerful as specific offer.

  • A case on this occasion is Mrs. Cary Lli (Vs) Carbolic Smoke bal Company. In this case Carbolic Smoke bal company is a pharmaceutical company. During contemporary period of this case a fever called `Influenza` is in existence. This fever arises as a result of rat bite. This fever is characterized by propagation from one person to the other. On that occasion the company has invented capsules to cure influenza. Here the company makes a general offer saying that those capsules can cure influenza very quickly and prior consumption of their capsules will avoid attack by influenza. In addition to it the company says that if any person gets attacked by influenza even after prior consumption, the company will pay 100 pounds to such person. Mrs. Cary Lli makes prior consumption & gets attacked by that fever. Court decides that general offer also is valid and hence the company is under obligation to pay 100 pounds to her.

Offer must be Communicated: Offer attains validity only after Communication. Un-communicated offer is not valid.

  • A case on this point is Lalman (Vs) Gowridutt. In this case Gowridutt is fond of children, but he has no children. Therefore he has brought his sister`s son. On one day, the boy gets missed from the house. Lalman is Gowridutt`s servant. Gowridutt sends Lalman to search for the missed boy. After Laman`s departure, Gowridutt makes an offer according to which he will give a reward to the person who brings the boy back. Thereafter the boy is found back by Lalman himself. After sometime Lalman comes to know about the reward and claims that reward. Here court decides that Lalman has no knowledge of the offer and hence he cannot claim the reward.

Price Declaration, Advertisement, Prospectus etc are not offers: All these things are only invitations to make offer, but not offers. Prospectus is invitation to make offer, share application is offer and allotment is acceptance.

  • Related case is Harve (Vs) Facie. In this case A is owner of a pen corner and B is an officer. On one day B sends a telegram to A requesting to inform the price of Bumper ball pen. A sends Telegram to B saying that price of bumper ball pen is 10 pounds. Now B gives telegram to A send one pen. Afterwards A gives telegram saying that he has no stock of Bumper ball pens. B sues A. Here court decides that price declaration is invitation to make offer and therefore there is no Contract at all between A and B.

Offer should be made with a view to obtain ascent of the other party: In the absence of intention to get acceptance the offer is not valid.

Offer may be Expression or Implied: In presence of conversation it is called express offer and in the absence at conversation it is called implied offer. Both types of offers are Valid. It is well known that Implied Contract is Valid. On that ground it can be conformed that implied offer is Valid offer.

Reticence leads to acceptance - This wording sound should not be included in the offer: In case where offerer says that Silence indicates acceptance, that offer is not Valid. As per the rules of Valid acceptance, acceptance must be communicated. Mere silence is not sufficient.

  • A related case is Felthour (Vs) Bindley. In this case A makes an offer to B saying that he (A) wants to purchase B`s property for 30 pounds and still says that B`s reticency indicates acceptance. Court decides that the offer is not Valid.

Legal Obligations: Offer must be capable of creating legal relation. That means two directional consideration must be reflected in the offer.

  • A case on this point is Balfour (Vs) Balfour. In this case husband offers to send money to his wife at regular intervals of time for the purpose of medical treatment to which she gives acceptance. Here the offerer is not willing to get any consideration from offeree. Hence it is decided that the offer as well as contract are not creating legal relations.

Certainty: The language used in the offer must be certain there should be no element of un-certainty.

  • A related case is Taylor (Vs) Portington. In this case B makes an offer to A saying that A has to modernize his house & if the mode of modernization is satisfactory to B, He (B) will join as tenant. In this offer un-certainity can be seen. It is not Valid offer.