Offer and acceptance
notes
Introduction
The agreement arises by one of the parties
making an offer and its acceptance by the
other party.
Thus both offer and acceptance create an
agreement
Therefore for a simple contract, as a first step
there must be an offer made by one party to
the other
Sec 2(a)- Offer or proposal
When a person signifies to another his
willingness to do or 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 (or offer)
Proposer/ offeror
Offeree
Expression of will or intention
Express or implied
Essential characteristics of a valid
offer
a) The terms of an offer must be clear and
definite
c) Offer must be communicated to the offeree
d) Made with an intention of creating legal
obligation
e) An invitation to offer is not an offer
f) Special terms attached to an offer must be
communicated
f) An offer may be to an individual or to the
public at large
g) Offer may be express or implied
h) Must be made with a view to obtaining the
assent of the other party
i) Offer may be conditional
case law 1
TAYLOR V. PORTINGTON
When the terms of the offer are uncertain and
vague, agreement is void.
A agreed to let out his house to ‘B’ for 3 years
at the rate of 85£ per annum. ‘B’ stated that
he would agree to take the house for the
above rent if the house was put into thorough
repair and the drawing rooms were decorated
‘according to present style’.
In this case though putting the house into
thorough repair is a definite term, decorating
the drawing rooms ‘according to the present
style’ is not a definite term, it is a vague term
because the term “present style” may mean
one thing to ‘A’ and another to ‘B’. So in this
case the court held that the agreement was
void.
case law 2
Handerson v. Stevenson
Steamer ticket- Dublin to Whitehaven on the
back- special terms printed which excluded
liability
Case law –3
Parker v. South Eastern Railway Co.
P deposited his bag at the cloak –room at a
railway station and received a ticket- see
back- a notice also hung – P admitted
knowledge of printed matter but denied
having read it. So bound
Case law 4
CARLIN [Link] SMOKE
BALL CO.
An offer if it is addressed to the whole world,
it may be accepted by anyone. In short a
general offer is a valid offer.
In this case the Co. had offered by
advertisement a reward of 100£ to anybody
contracting influenza after using the smoke
ball according to their direction. Mrs. Carlin
used it as directed, but still she had an attack
of influenza. Hence in this case the court held
that she was entitled to the reward of 100£ as
it was a general offer and she accepted it.
Different kinds of offer
a) Specific offer
b) General offer
c) Standing offer- continuous supply
d) Cross offer
e) Counter offer
Lapses of an Offer-
when offer comes to an end
By revocation, lapse or rejection of an offer
1) Revocation by communication of notice
2) By lapse of prescribed time
3) Death of the proposer
4) Insanity of the proposer
5) Non- fulfillment of condition
6) Offer not accepted according to the mode
prescribed
7) Rejection by a counter offer or cross offer
Practical Problems
1. Whether a valid offer
A) A garment store gave the following
advertisement in a newspaper:”Special
sale for tomorrow only. Men’s Night Suits
reduced from Rs. 200 to Rs.100”
B) P says to Q, “I will sell you a camera”.P
owns three different types of cameras of
various prices
C) An auctioneer displays a refrigerator
before a gathering in an auction sale.
D) A advertises in The Statesman that he
would pay Rs.200- to anyone who finds and
returns his lost dog.( Fitch v. Snedaker)
2) A tells B in the course of a conversation
with him that he will give Rs. 10,000/- to
anyone who marries his daughter with his
consent. B marries A’s daughter with his
consent. Is he entitled to recover this
amount?
3) A sent a telegram to B, will you sell your
car? Quote lowest price. B sent a reply,
lowest price Rs. 25,000/-. A sent a second
telegram to B, I agree to buy your car for
Rs.25,000/-. B thereafter refuses to sell.
A) Can A compel B to do so?
B) Is there a contract b/w A & B?
4)A sent a letter to B offering to sell his house to B.
The next day, A wrote another letter revoking his
offer. Meanwhile B had accepted A offer by return of
post. What is B’s remedy if any against A?
If A ‘s letter of revocation reaches B before B’s letter of
acceptance reaches A
If B’s letter of acceptance is lost in the post
If B’s letter of acceptance is posted an hour after the
posting of A’s letter of revocation?
5) B offered to sell his house for Rs.50,000/-. A
accepted the offer by post. On the next day,
A sent a telegram withdrawing the
acceptance which reached B before the
letter. a) Is the revocation of acceptance
valid? b) Would it make any difference if both
the letter communicating acceptance and the
telegram communicating revocation of
acceptance, reach B at the same time?
6)S offers to sell B his car to B for Rs.15,000/-.
T, standing nearby says, I will take it if B does
not take it. B is not interested in the car
a) Does a contract arise b/w S & T? b) What
will be the position if T says to S,” here take
the money, I take the car.
7) P advertises in a daily newspaper that
he will give a prize of £1,000 to the first
person to swim the English channel and
back during the month of August. F, who
has read the advertisement, set off from
Dover on 1st August and reaches the coast
of France on 2nd August. On that day, a
further advertisements in the same
newspaper stating that the offer of the
prize has been withdrawn. On 3rd August F
completes the return swim to England.
Can F recover the prize?
8)A, a merchant, sent his son, to Agra with a
letter for B,an Agra [Link] the letter A
offered to sell to B a quantity of cloth and
required B to give his reply to C. B sent away
C without a reply but decided later to accept
A’s offer by telegram. The telegram reached
A before C’s return. Has a valid contract
come into existence?
9) P applied for the Principalship of a local
college, and the Governing Body passed a
resolution appointing him. After the meeting,
a member of the governing body privately
informed him of the resolution. The resolution
was subsequently rescinded. P claims
damages. Will he succeed?
10)A offered to sell his car to B for Rs.60,000/-.
B said,”I accept your offer. Here is
Rs.50,000/- in cash and a 60- day promissory
note for the [Link] a contract result?
11) A offers to buy B’s house on certain terms;
an answer to be given within six weeks. B
within that time write to A a letter purporting
to accept but in fact containing a material
alteration of the terms. A then withdraws his
offer. B writes again Still within six weeks
correcting the error in his first letter and
accepting the terms originally proposed by A.
Is there a contract between A and B?
