The offer

Saroj Ghimre
Advocate
Law Faculty

For BBA, KUSOM

Parties to be Autonomous
• The parties to contract, subject to
this Act shall be free to choose the
form and content of contract and to
determine consideration and its
quantum, the terms and conditions of
the contract and the nature of the
remedy in the event of its violation,
as well as to determine the measures
for resolving disputes under the
contract.
• A proposal and its acceptance is the
universally acknowledged process for
the making of an agreement.
• The proposal is the starting point.
• Section 2 (b), ‘When one party offers
to do or not to do something to the
other with the intention to get assent
from the other is said to be an offer.’
• The person who makes an offer is
offeror and to whom offer is made is
offeree.
• Thus an offer is a definite
undertaking, ie one which is not too
vague- made with the intention that
it shall become binding on the person
making it as soon as it is accepted by
the person to whom it is addressed.
 Rules Regarding Offer
1. An offer must intend to create legal relation
2. Offer can be express or implied
3. An offer can be made to specific person/s or
to a class of person or to the whole world.
4. An offer must be communicated.
5. An offer must contain specific and clear
terms/ not too vague
6. An offer can be revoked at any time before
acceptance
7. Invitation to treat is not an offer
Offer must Intended to create legal
relation:

• The question whether or not the parties

have intention to create legal
relationship can be answered with
reference to type and terms of
agreement and their circumstances
under which agreement is made.
• Thus, an offer to be valid, the issue
of whether there was an intention to
create legal relations is to be seen.
In deciding whether an Offer has an
apparent intention to be bound need
to satisfy 2 conditions:
• 1. the conduct of the alleged offeror
must be such as to induce a
"reasonable person" to believe that
he / she is making the alleged offer.
• 2.
• 2. the alleged offeree must actually
hold that belief – i.e. believe that the
offeror is making a genuine offer, as
opposed, for example, to playing a
game. .
• Offer can be Express or Implied:
• Express offer is one which is made by
words spoken or written.
• X says to Y, will you purchase my bike for
Rs.90,000.
• X writes to Y in a letter, “I want to sell
my house for Rs. 5 million.”
• X advertises in a newspaper that I will
pay Rs. 1,000 to anyone who traces my
missing nephew.
 Implied Offer
• Which is made otherwise than in
words spoken or written. It is
inferred from the conduct of the
person.
• Receiving benefits even after
termination of contract.
 Offer can be Specific
offer or General:
• Specific Offer:
• Is one which is made to a definite
person or particular group of persons
and can be accepted only by that
person or that particular group of
persons to whom it is made.
 Boulton v Jones
• An offer made by A by letter to B.
The letter falls into the hands of C
and C believing it to be for himself,
accepts the offer, the court held
that there could not be a contract as
the offer was not made to C.
 General Offer:
• A general offer is one which is not
made to a definite person, but to the
world at large or public in general.
• A general offer can be accepted by any
person by fulfilling the terms of the
offer. In case of general offer, the
contract is made with person who
having the knowledge of the offer
comes forward and acts according to
the condition of offer.
• Carlill v Carbolic Smoke Ball Co.
 Harbhajan lal v Hachan
Lal
• X advertised in the paper that the
would pay Rs 5000 to any one who
traces his missing boy. Y, who knew
about the reward traced that boy
and sent a telegram to X that he had
found his son.
• It was held that X was entitled to
receive the amount of reward.
 SECTION 10(a)
• If any person, by means of a
advertisement, advances an offer in
public to the effect that he will pay a
specified remuneration to any person
for performing any work specified in
the advertisement, and if any person
performs the work as mentioned in the
advertisement, the advertiser must pay
the specified remuneration to that
person
 The terms must be clearly
stated certain and unambiguous.
• Thus terms an offer must be certain, clear and
unambiguous.
• It must not be based on a condition which is
uncertain or incapable of performance.
• The term of an offer must be clear enough for
the offeree to be able to decide whether to
accept or reject the terms of the offer.
• If the terms are indefinite, the court cannot
enforce the contract or determine an
appropriate remedy for its breach.
• A statement may be held to be vague
to compromise a valid offer

• Guthing v Lynn (1831):

• The buyer of a horse promised to pay
the seller and extra £5 ‘if the horse
is lucky for me’.
• Held: this was too vague to be
enforceable. No indication was given
of what the promise really meant.
• If the terms of the offer are vague,
no contract can be entered into
because it is not clear as to what
exactly the parties intended to do.
Offer must be communicated to
the offeree:
• The offeror must know of the offer to be
able legally to accept.

• The communication of an offer shall be

deemed as completed when it comes to the
knowledge of the offeree. (Sec. 7.1)
 Fitch v Snedkar
• you can only accept an offer when it
was clearly communicated to you, you
cant accept it if you were not aware
of it.
• Case of lost dog
 Bloom v American Awiss
Watch Co
• Bloom gave evidence to the
authorities which led to the arrest of
some jewel thieves. He then
discovered that the defendant had
previously advertised a reward for
such information. The defendant
refused payment.
 Held
• It was held that that the defendant
was not legally obliged to pay as no
contract to do so existed between
the parties, since the offer of the
reward had not been communicated
to the claimant prior to his giving the
information,
 Termination of offer
• The acceptance of an effective offer
to an offeree gives the offeree the
power to transform the offer into a
binding, legal obligation (a contract)
by an acceptance. This power of
acceptance, however, does not
continue ever, it can be terminated
by following ways:
 By Revocation
• Where the person making the offer
changes his mind (revokes the offer).
• An offer can be revoked at any
time before acceptance even
though the offeror has stated he
will keep it open for a certain time
 Rejection of the Offer
by the Offeree:
• An offer is terminated, if the
offeree rejects it.

•
 By lapse of Time
• An offer shall be deemed
terminated, In case the period for
sending a notice of acceptance is not
specified and the offeree does not
send a notice of his acceptance
within a reasonable period.
 If not accepted in the
reasonable time
• In case the offerer has proposed
that the notice of consent to the
proposal be given to him/her within a
specified period, and the offerer
does not receive the notice of
consent given by the person to whom
the proposal has been presented
within the period offer gets
terminated.
• In case the period for sending a
notice of consent is not specified as
mentioned in Clause (a), and the
person to whom the proposal has
been presented does not furnish a
notice to the proposer within a
reasonable Period
 By Counter Offer
• An offer shall be terminated, if
offeree accepts offer by amending
and adding any conditions thereto.
(Sec. 9.f) Incase of offeree accepts
the offer with amending and adding
is called the counter offer.
 Hyde v Wrench
• The defendant offered to sell property for
£1000. The plaintiff made a counter offer of
£950, which was rejected. The plaintiff, having
made the counter offer of £950, decided that he
wanted to accept the original offer of £1000.
The defendant now refused to sell at £1000. The
plaintiff tried to enforce his second acceptance.
• The court held that the counter
offer of £950 was a new offer. The
counter offer superseded the new
offer, which no longer existed. The
vendor was not bound to accept the
counter offer of £950. The
subsequent offer to buy the property
for £1000 was also a new offer,
which the defendant had the right to
reject.
 By failure to accept
condition precedent:
• An offer lapses it is accepted without
fulfilling the conditions of offer.
• For eg. X offered to sell his car to Y for Rs
1,00,000 subject to the condition that that
Y should pay an advance of Rs 20,000 before
a certain date. Y accepted the offer but did
not send an advance of Rs 20,000.
• In this case, the offer is lapsed because the
advance was not paid.
 Termination by Operation of Law:
Destruction of the subject Matter:
• The offer terminates if the subject
matter of the offer is destroyed
through no fault of either party prior
to its acceptances. For example, a
house has been listed for sale, suddenly
the house is destroyed by fire. In this
situation the offer is automatically
terminated as subject matter of the
offer is already destroyed.
Death or Insanity of the
Offeror or Offeree:
• An offer shall be deemed revoked by
death or insanity of offeree after
giving his acceptance but before the
offerer receives.(Sec.9.e) In case of
death or insanity of the offeror or
offeree, the offer can be terminated
by operation of law.
 General Offer,
Rules and termination
(Section 10)
• If any person announces to reward or
pay to any one through advertisement,
for any work to be done and any person
who acts according to the
advertisement, the one who advertises
shall pay or reward as per the
advertisement.
• Howeevr, the offeror shall not pay to
the one who performs without having
knowledge of the offer.
 Carlil v Carbolic Smoke Ball Co.
• Carbolic smoke Ball Co. advertised in the
newspaper that it would pay £100 to anyone
who contracts influenza after using the smoke
ball of the company according to the printed
instructions. Mrs. Carlill uses the smoke ball
according to the printed directions but
subsequently contracted influenza.
• On a suit for the reward she was held entitled
to recover the same because she had
accepted the offer by fulfilling the terms of
the offer
 Termination of general
offer:
• If the general offer is performed by
by more than one person, the one who
has performed earlier shall be entitled
to received the offer.
• If done by more than two person at the
same time, the offered amount shall be
distributed equally and if the
consideration is not possible to
distribute, first sale is to be made and
distribute later.
• If the genral offer is made for certain
period of time, it shall be terminated
by lapse of that time.
• The offer shall be revoked in the same
mode as it was made.
• If any one has already performed some
act on the advert before advert is
revoked, the person shall be paid for
his work. However, the person who has
performed, need to give the notice as
soon as possible.
• If any one has informed the one who
has made advert regarding to the
work carried by him to perform, the
person shall be paid for the work he
has carried until the offer is
terminated.
 What is not an offer
• Information for price is not an offer.
• Harvey v Facey (1893)
H telegrammed F: “ Will you sell Bumper Hall
Pen? Telegraph lowest cash price”

● F telegrammed in reply: “ Lowest cash

price for Bumper Hall Pen £900”

● H then telegrammed: “ We accept for the

£900 asked by you”
• Held:
• The first telegraph was a mere
request for information. The second
was supplied as requested. The third
was the only one with any contractual
meaning, as it constituted an offer to
buy for £900. This offer was never
accepted, so no contract came into
being.
 Gibson v Manchester City Council
(1979)
• A council house tenant asked Manchester
City Council how much it would cost to buy
property. The council responded, indicating
that it might be prepared to sell for £2,180.
• The plaintiff claimed that a legal agreement
existed and that the council should be
required to sell the house at that price. The
court held that indicating a possible
willingness to sell did not constitute an offer.
It was merely a statement of intention and
was not an intention by Manchester City
Council to be legally bound.
 Offers to treat
(invitation to treat)
• Price list, catalogues, advertisements
• Harris v Nickerson (1873)
• The plaintiff went to some effort and
expense to attend an auction of furniture
that was advertised by the defendant. In
the event, the auction did not occur. The
plaintiff sued the auctioneer for expenses.
The court held that the advertisement was
merely an invitation to treat. There was no
legally binding agreement between the
plaintiff and the auctioneer, and the court
action by the plaintiff failed.
• Goods Display is shop
• Pharmaceutical society of Great Britain v Boots Cash
Chemists (Southern) 1953,
• The relevant legislation required certain drugs to be
sold by a qualified pharmacist. The plaintiff claimed
that because the goods were sold on a self service
display in Boots stores, this contravened the
legislation.
• Boots counter claimed by indicating that the display
of the goods in store was an invitation to treat and
that the qualified person was at the cash point where
the goods were actually sold.
• The court agreed with boots: the display of goods was
an invitation to treat, not an offer of sale.
• Company Prospectus

• Auction Sale
• Tender:
• An invitation to tender may be sent out
by a person who wants a particular job
done or who wants to buy certain items.
The invitation specifies the nature of
the goods or services required. The
person receiving the tender are invited
to submit offers, stating the price at
which they would be willing to sell the
goods or provide the service, and any
other terms. Any person submitting a
tender is the offeror, and a tender is
the offer.