OFFER AND ACCEPTANCE
The agreement consists of two parties where one party makes an offer to the other party and the other party accepts the offer or rejects the offer. If the offer is accepted it becomes an agreement otherwise it doesn‟t.
Section 2(a) of The Indian Contract Act Defines an Offer / Proposal as Follows: “When a person signifies to another person his or her willingness to do or abstain from doing anything, with a view to obtaining the assent of that other to such act or abstinence, he or she is said to make a proposal.”
Illustration
Savita is making an offer to Priya. She says, "Would you like to buy my gold necklace?"The offer is rejected by Priya. There was no agreement. If Priya had accepted an offer to buy a necklace, an agreement would have been formed.
An Offer Consists of Two Parties:
- Offeror- The person who makes an offer or a proposal.
- Offeree- The person to whom the offer or proposal has been made.
Illustration
Ram says to Raghu „Will you buy my bicycle for Rs 3000?‟ In this case Ram is an offeror and Raghu is an offeree.
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Zeenat says to Shyama „Will you come with me to Goa?‟ In this case Zeenat is an offeror and Shyama is an offeree.
An Offer Consists of Two Elements
- An expression of willingness by the offeror to do or abstain from doing something. The offeror shows his readiness to the offeree to do something or not do something.
Illustration
Pradeep tells his son Pappu, "In the summer holidays I will take you to Shimla." In this the offeror Pradeep shows his willingness for the summer holidays to take the offerer Pappu to Shimla.
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Pappu tells his father Pradeep "I'm never going to smoke cigarettes." In this the offeror pappu shows his willingness to abstain from smoking cigarettes to the offeree Pradeep.
- The expression of willingness is made to obtain the assent of the other person to such act or abstinence. While making the offer to the offeree the offeror must show his intension to obtain the offeree‟s consent to the offer.
Illustration
Shyam's has a car worth 20,000 rupees but he doesn't want to sell his car to his neighbor Jhamu. So he's making an offer to Jhamu, "Will you buy my 50 thousand rupee car?" Jhamu did not accept the offer, as the car was not worth 50 thousand rupees. In that regard, the offeror did not intend to obtain the consent of the offeree.
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Nirmal told his father, „ I will leave smoking when I no longer have the urge for need it‟. The offer was not acceptable to Nirmal‟s father.
2.1.1 How is an Offer Made?
An offer can be made in two ways:
- Express – The offer is made orally or in writing.
- Implied – The offer is made through the conduct of the parties or the circumstances of the case.
Express Offer can be of two types:
- Oral Offer – The offer is made by words spoken.
- Written Offer – The offer is made in writing
An oral offer can be made in person
An oral offer can be made through a telephone and mobile.
A written offer can be made through letters, telegrams and emails.
An Implied Offer is not made in words. It is implied from the conduct of the parties or the circumstances of the case. The offeror does not make the offer to the offeree in the usual mode. That is, he/she neither makes an oral offer nor a written offer. The offeror makes the offer silently by his/her conduct.
Illustration
There is a Metro train in Delhi on a particular route. There is an offer from the Metro authority to carry passengers on the route, provided that they pay the specified fare.
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The weighing machine on the platform of the railway station in Mumbai makes an implied offer to the passerby to use the machine by inserting the right coin.
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A public telephone booth in a market place is making an implied proposal to the visitors to use the phone by inserting the right coin.
2.1.2 To whom Can Offer be Made?
An offer can be made to a definite person or to the public at large. In the former case it is called specific offer and in the latter it is called general offer.
Specific offer: In a specific offer the offer is made to a specific / particular person.
Illustration
Devendra says to Chaitali „will you buy my Laptop for 40 thousand rupees?‟ In this case Devendra has made a specific offer and only Chaitali can accept the offer.
General Offer An offer is made to the public in general and anyone in the public can accept the offer.
Illustration
Gangadhar‟s son Pankaj was missing from school. He placed an advertisement in the Hindustan Times, which said that anyone who found his son would be rewarded with 5 lakh rupees. This is a case of general offer wherein anyone who reads the paper and finds Gangadhar‟s son is entitled to the reward.