TYPES OF OFFERS

TYPES OF OFFERS

By:- thelawiq.com. Author:- Kanika Soni(BA LLB)

Introduction

The Indian contract act 1872 prescribes the law relating to contracts in India and is the key act regulating Indian contract law . The Act is based on the principles English common law. It is applicable to all the states of India

The Indian Contract Act, 1872 defines the term “Contract” under its section 2 (h) as “An agreement enforceable by law”. In other words we can say that a contract is anything that is an agreement and enforceable by the law of the land.

A contract is an accepted proposal (agreement) that is fully understood by the law and is legally defined or enforceable by the law.

OFFER

the contract is a combination of agreement and enforceability by law. The first or the initial step of agreement consist of offer

According to Indian Contract Act, 1872 (Act No.9 of 1872) “Offer” is define under

Section 2(a) : “When one 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

The person who is making the proposal is called offeror or promisor or proposer and the person to whom the proposal is made is called as offeree or promise.

The parties involved in offer are:-

  • Offeror- The person who is making an offer to other is called Offeror or Propose.
  • Offeree- The Person to whom the offer has been made is called Offeree or Proposee.

As per Section 2(c), when the offeree accepts the proposal by the offeror than he becomes the Acceptor of that offer.

Essential of valid offer

  1. Offer must be communicated :-

Communication of offer is the most primary thing which is to be done for a valid offer. The offeror must communicate offer to the offeree. The communication can be either in oral or written form.

Lalman Shukla v. Gauri Dutt The High Court of Allahabad that knowledge and acceptance of a proposal must be communicated to people are the basic essentials in order to constitute a valid contract. The person can claim reward if he gives his consent and perform the terms of the proposal.

  1. Must create legal relationship:-

A valid offer creates a legal relationship which means there must be an intention of the offeror to work under legal obligation or to be legally bounded by law not under social obligation.

In case of Balfour v. Balfour They were married couple. Husband promised to his wife to send £30 per month. But husband failed to do so. Then wife filed the case against him and it was held that there was no intention to create legal relation. Thus the agreement was not valid.

  1. Definite, unambiguous and certain in nature:

Offer must be certain as specified in [Section 29], it must be unambiguous means that the thing offered must clearly specified.

  1. It must distinguished from invitation to offer:-

The offer makes a person to enter into a legally binding contract whereas invitation to offer invites the person to enter into contract.

For example : A suit was displayed with a price tag in a shop. This is not a offer it is invitation to offer.

  1. It may be general or specific in nature:-

The offer can be given to public at large in general by advertisement in newspaper etc. or it can be given specific person too.

  1. Offer must be made with a view to obtain the assent :-

The offeror must obtain consent which should be “free” in nature as define under Section 14 as it define it should not be taken under coercion [section 15], undue influence [Section 16], fraud [Section 17], misrepresentation [Section 18] & Mistake [Section 20, 21 and 22]

Types of Offer

1.Express Offer

an express offer is the most usual form of offer. It is being made through letters, telephone or the internet. The usage of language and words become mandatory. The communication of the intention has to be made from the offeror to the offeree clearly.

Example – A writes a letter to D to buy his earphone for Rs.500. This is an expressed offer.

And mintu says to nivesh that he will sell his cycle to him for rs 14000 this express offer.

Implied Offer

For an offer to be implied, all the necessary terms of the contract that are being proposed must be conveyed to the offeree. It will thus help in the seamless formation of the contract.

Section 9 of ica also says that in so far as such a proposal or acceptance is made otherwise than is words the promise is said to be implied. Therefore any offer or st of an offer made through any mode other than written or verbal words is considered as an implied offer . it includes

1] offer through the conduct of the parties

2] offer through the circumstances

For example the rajasthan transport corporation runs buses on different routes to carry passenger at the schedules fares this is an implied contract

Counter Offer

when the initial offer is being communicated to the other party, the respective person jumps back with modified or newer terms in which he/ she wants the formation of the contract to take place.

A counteroffer is itself an offer and it is considered a rejection of the intial offer it is a new offer that terminates the initial offer, making it impossible to be revived at a later time

Some technical details may be changed or some other details as the offeree may like. Once the offeror accepts the conditions so mentioned by the offeree in the new offer, the same becomes the true offer and an integral part of the contractual relationship that would be so affected.

Cross Offer

two people can make simultaneous and similar offers to each other. This situation resembles that of the double coincidence.

In the classic case of Tinn V Hoffman, the offers to buy the iron on similar terms were being placed against the same parties by the same parties respectively. The court held that the offer so made by the second party against the first one would not constitute to be an offer.

It is because the party was not aware of the initial offer so made by the first party and secondly, only an offer from the other party would not make it an acceptance at any cost.

Also, it cannot be treated as any mutual acceptance. No binding effect would accrue on either party.

General Offer

In this offer there is no need to for acceptance to the offeree. Anyone who performs the terms and condition prescribed by the offeror is considered as a completion of communication of the offer

The most common case used to explain this offer is that Carlill v Carbolic Smoke Ball Company. The respective company famously produced a smoke ball. It also advertised to give a reward of 100 pounds if somebody using the smoke ball catches influenza.

When the appellant developed influenza, the court considered that the terms mentioned in the unilateral offer stand fulfilled. After all, that generally offer had conditions to be fulfilled, which was duly done.

Specific Offer

The offer which is made to a particular or ascertained person or group of person and acceptance of the same can be given by that specific party only is called specific offer

As the name itself suggests, the communication of a proposal happens towards a particular individual. The offer would fructify with a contract only at the assent being signified by that particular individual. This stands for a specific offer.

In Case Boultan vs jones, In this case, the defendant have a transaction with the dealer named Brocklehurst it was an order to buy goods to the dealer, but not the day the order is sent to Brocklehurst has already sold his company to the plaintiff. The plaintiff then send the ordered goods without notifying the defendant have transferred to the ownership of the company defendant refused to pay. Hence the court decided that the plaintiff is not entitled to receive an offer that is not directed to him

Standing or Open Offer

An offer that is open for acceptance over some time is called a standing offer. But it is being kept open for a certain period of time. In that frame, people can continue applying as it is also called a continuing offer

The best example is that of a tender, which is nothing but an offer. Till the time, it is not accepted and the acceptance is not communicated, the contract would not be formed.

When does an offer come to an end?

1] an offer lapses after a stipulated or reasonable time

2] an offer lapses by not being accepted in the mode prescribed

3]After offer lapses by rejection

4] an offer of revocation

5] after the death of the offeror or the offeree before acceptance

CONCLUSIONS

1] the offer is an essential element for the formation of a contract. without an offer and acceptance, there can’t be an agreement. An offer is a step towards the formation of an agreement

2] An offer is a sign of their willingness to agree on certain terms from one person to another.

3] The communication of the offer shall be complete when it comes to the knowledge of the person to whom the offer is made and the communication of the acceptance shall be complete when the acceptance is put in a course of transmission to the offeror.

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