OFFER or PROPOSAL

PROPOSAL: When a 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

There must be an expression of the willingness by one person to another to do or abstain from doing something. The expression of willingness must be made to obtain the assent of the other person to such act or abstinence. Intention to create legal right.

Examples

A offers to sell his car to B for Rs. 3 Lac. A is making an offer to B. A says to B, I am willing to sell my car for Rs. 3 Lac. Are you interested to buy it?. A makes an offer to B

Promisor / Offeror Offeree /Promisee/ acceptor

Essentials of a Valid Offer

1. It may be express or Implied Express offer: Offer made by word spoken or written. Example: A says to B that he will sell his motorcycle to him for Rs.50,000/-. Implied Offer: Offer which is inferred from the conduct of a person or the circumstances of the case Example: A railway Coolie carries the luggage of B without being asked to do so. B allows him to do so. It is an implied Offer Case Study: A fire broke out in the farm owned by Mr. Powell. He believed that he was entitled to the free services of Upton Rural District Council Fire Brigade and, therefore, summoned it. The brigade put out the fire. Later it was divulged that Mr. Powells farm was not within Free service zone of Upton Council. (Upton Rural District Council vs. Powell) Query: Is Mr. Powell Liable to pay Upton District Council.

Essentials of a Valid Offer

2.

It must create Legal Relations Intention to create a legal right Give rise to legal Obligations Examples: A invites B to dinner and B accepts the invitation. It does not create any legal relations, so there is no agreement. A offers to sell his watch to B for Rs.200 and B agrees. Legal Relation is created.

Essentials of a Valid Offer

3.

It may be Definite & Clear Example: A has two motorcycles. He offers B to Sell one motor Cycle for Rs. 30,000/-. B cannot enforce this agreement because it is not clear which motorcycle A wanted to sell. Case Study: Mr. Portington purchased a horse from Mr. Taylor and promised to buy an other horse, if the first one proved lucky. Later Mr. Portington refused to buy the second horse. (Taylor vs. Portington) Query: Can Mr. Taylor enforce this agreement?

Essentials of a Valid Offer

4.

It is different from Invitation to receive offer/invitation to treat an invitation to receive offer is an invitation to receive offer. The person sending out invitation does not make an offer but only invites the other party to make an offer Examples Quotations, Catalogues of prices, display of goods with prices, display of goods in auction of sale. Case Study: Nickerson, an auctioneer advertised that furniture would be sold by him at his auction House on specified days. Mr. Harris a broker came from London to attend the auction but all furniture was withdrawn from sale. Mr. Harris sued Mr. Nickerson for his loss of time and expenses. (Harris vs. Nickerson) Query: Will Mr. Harris succeed in recovering damages from Mr. Nickerson?

Essentials of a Valid Offer

5.

It may be Specific or General Specific Offer: When offer is made to a specific person or group of persons Example: M makes an offer to N to sell his bicycle for Rs. 800/-, it is a specific offer. In this case only N can accept it. General Offer: Offer that is made to public in general. Example: A announces in newspaper a reward of Rs. 1,000/- for any one who will return his lost radio. It is a general offer. Case Study: The Carbolic Smoke Ball Company, issued an advertisement in which the Company offered to pay 100 pounds to any person who contracts flue, after having used their medicine , according to the printed direction. Mrs. Carlill bought and used the medicine according to the directions, but she suffered from flue. She sued the company for the reward. (Carllil vs. Carbolic Smoke Balls Co.) Query: Will Mrs. Carllil succeed in her case?

Essentials of a Valid Offer

6.

It must be communicated to the Offeree Examples: A, without knowing that a reward has been offered for the arrest of a criminal and informs Police. A cannot recover the reward as he is not aware of it Case Study: Gauri Datts nephew was missing from home. He sent his servant, Mr. Lalman, in search of the boy. After the servant has left, Mr. Datt announced a reward of Rs. 501/- to any one giving information relating to the boy. The servant, before seeing the announcement, had found the boy and informed Mr. Datt. Later, on reading the notice of reward, the servant claimed it. (Lalman vs. Gauri Datt) Query: What will be the outcome of the case

Essentials of a Valid Offer

7. It should not contain Negative Condition An Offer should not contain a condition the non-compliance of which may be assumed as acceptance e.g. an Offeror cannot say that if acceptance is not communicated up to a certain date, the offer would be presumed to have been accepted.
8.

It may be subject to any Terms & Conditions Example: A asks B to send the reply of his offer by telegram but B sends reply by letter. A may reject such acceptance, because it is opposed to the prescribed mode of communication. A offers to sell his car for Rs. 5 lacs subject to consideration being made in cash. B replies to the offer but intends to pay through cheque. A may reject acceptance.

Essentials of a Valid Offer

9. It must not contain cross offers When two parties make similar offers to each other, in ignorance of each others offer, such offers are called cross offers. The acceptance of cross offers does not result in complete agreement. Example: On August 20, 2008, A wrote to B to sell him 100 tons of iron at Rs. 5,000/- per ton. On the same day B wrote to A to buy 100 tons of iron at Rs. 5,000/- per ton. There is no acceptance in each others offer.

Revocation and Termination of Offer

1. 2. 3. 4. 5. 6. 7. 8.

Notice of Revocation( before acceptance) Lapse of Time Failure to fulfill Condition Rejection of Offer by Offeree Counter Offer by Offeree (Negotiations) Death or Insanity of the Offeror or Offeree Subsequent Illegality Destruction of subject matter