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OFFER AND

ACCEPTANCE

LEGAL RULES AS TO OFFER

Offer must be such as in law is capable of


giving rise to legal relationship

A social invitation does not create a legal


relationship even if it is accepted

Terms of offer must be definite


If

the terms of offer are vague it acceptance


cannot create a contractual relationship.
A says to B, I will sell you a car. A owns 3 cars.
The offer is not definite.

An offer may be distinguished from:A

declaration of intention or announcement.


An offer would be made in future.
Eg:- An auction/concert
An auctioneer advertised in a newspaper that a sale of
office furniture would be held. A broker came from a
distant place to attend that auction, but all the
furniture was withdrawn. The broker sued the
auctioneer for his loss of time and expenses. Held a
declaration of intention to do something is not
binding.

An

invitation to make an offer.

Display of goods in a shop is not an offer, it is an


invitation to the public to make an offer.

Offer must be communicated.


Unless

an offer is communicated, there can be no


acceptance to it.
An acceptance of the offer in ignorance of the offer is
no acceptance and do not give any right to acceptor.
S offered a reward to anyone who returned his lost dog.
F brought the dog to S without having heard of the
offer. Held F was not entitled to the reward.

Offer must be made with a view to obtain the


assent.

Offer should not contain a term the non


compliance of which may be assumed to amount to
acceptance.
It

cannot be said that an acceptance not communicated


the offer would be accepted.
A writes to B I will sell you my horse for 50000 and if
you do not reply, I shall assume you have accepted the
offer. there is no contract If B does not reply. As B is
under no obligation to speak.

If B is in possession of As horse at the time offer is made and


he continues to use the horse then the result would be
different.

A statement of price is not an offer.


A

will you sell me your pen? Send the lowest price


B- lowest price is Rs. 1000
A- we agree to buy for the sum stated by you.

LEGAL RULES AS TO ACCEPTANCE

It must be absolute.
Material/

immaterial ,major / minor , consenses etc.


A made an offer to B to purchase a house with possession
from 25 july. The offer was followed by an acceptance
suggesting possession from 1 aug. held there was no
contract.
A says to B I offer to sell my car for Rs. 50000. B replies I
will purchase it for 45000.held no acceptance is there

It must be communicated to the offeror


Acceptance

must be communicated in some prescriptable

form.
F offered to buy his nephews horse for $30. the nephew
did not write to F but told his auctioneer who was selling
his horse not sell it as it had been sold to his uncle. The
auctioneer sold the horse, held F had no right of action as
his offer was never accepted.

It must be according to the mode prescribed


If

the acceptance is not as per the mode prescribed


the offeror may intimate it. If not it is deemed to be a
valid acceptance.

makes an offer to B if you accept the offer reply by a


mail. B sends the reply by post. it will be a valid
acceptance unless A informs B that it is not as per the
prescribed mode.

It must be given within reasonable time.


It cannot precede an offer.
It cannot be implied with silence.
It must be given by the party to whom the offer is
made

WHEN DOES AN OFFER COME TO AN


END ( REVOCATION)

By lapse of time
S

offered to sell wool to B on Thursday and agreed to give


him 3 days time to accept it. B accepted the offer on
Monday, but by the same time S had sold the wool. Held the
offer lapsed

By non fulfilment by the offeree of a condition


precedent to acceptance
S

a seller agrees to sell certain goods subject to a condition


that B the buyer pays agreed price before a certain date. If
B fails to pay the price by the date, the offer stand revoked.

By communication of notice of revocation by offeror


before its acceptance
At

an auction A makes the highest bid. He withdraes his bid


before the fall of the hammer.

By death or insanity

If a counter offer is made


W

offered to sell farm to H for 1000. H offered 950. W


refused the offer. Subsequently H agreed for 1000. held
there was no contract as the original offer was
rejected.

If offer is not accepted in the prescribed mode

TIME FOR REVOCATION

A proposal may be revoked at any time before the


communication of its acceptance is complete as
against the proposer
An acceptance may be revoked at any time before
the communication of acceptance is complete as
against the acceptor.
A

proposes by a letter sent by post to sell his house to B.


the letter is posted on 1st. B accepts the proposal by a
letter sent by post on $. The letter reaches A on 6.

A may revoke his offer at any time before B posts his letter of
acceptance i.e 4
B may revoke the acceptance at any time before the letter
reaches A i.e 6