Meaning and Definition of Offer
An offer means to say something to
another person with the intention that another person will accept it. According
to Section 2 (a) of the Indian Contract Act, "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, he is said to make a proposal".
Thus, when a person says something
to another person with the intention that another person will agree to it, it
is called a proposal or offer. The person who makes an offer is known as the offeror
and the person to whom the offer in made is called the offeree.
Types of Offer
1. General Offer:
When an offer is made to the general public, it is called a general offer. It can be accepted by any person who comes to know about the offer.
Example- Carlill vs. Carlill Smoke Ball Co.: A pharmaceutical Co. manufacturing anti-influenza medicine, gave an advertisement in a newspaper that whosoever is suffering from influenza, should use this medicine for a certain period of time as per instructions. If he still does not recover from influenza, the company would pay him a certain amount as damages. This is a general offer.
2. Specific Offer:
When an offer is
made to a specific person or persons, it is called a specific offer. It cannot be
accepted by any person or persons other than those before whom it is made.
Example- A says to B that I am ready to sell my
scooter to you for Rs. 15,000 only. It is a specific offer. It can be accepted
only by B.
3. Cross Offer:
When two parties
exchange offers of the same intention without having knowledge of the other's
offer, these offers are known as cross offers. In such a case, there can be no
concluded agreement because one offer cannot be taken as acceptance of another
offer.
Example- M of Meerut writes a letter to D to Delhi
offering him to sell his house for Rs. 6,00,000. At the same time, D of Delhi
writes a letter to M of Meerut, without having the knowledge of the letter written
to him by M offering him to purchase his house for Rs. 6,00,000. These are
cross offers. None of these constitutes a binding agreement because one offer
cannot be the acceptance of another offer.
4. Counter Offer:
When an offeree
such but makes a new offer with some change in the terms of the original offer, it
is said does not accept the original offer as to be a counter offer. The counteroffer is not binding.
Example- A offered to sell his
bicycle to B for R$ 500. B offered Rs 400, and A refused it. Subsequently, B offered
Rs. 500. It is a case of a counter offer. It cannot be taken as a binding offer.
Now A cannot be compelled to sell his bicycle to B for Rs. 500 unless he
affirms it.
5. Express Offer:
An express offer
is one which is made by words, spoken or written.
Example- A says to B that I want to
purchase your house for Rs. 8,00,000.
It is a case of express offer because it is made by words.
6. Implied Offer:
An offer made by
the conduct of the offeror is known as an implied offer. It is not made by words but
it is fully valid.
Example- A bus playing on a certain
route, makes an implied offer to travel in.
7. Invitation to Offer:
An
invitation to offer means an offer to invite offers. A person giving such an invitation does not make an offer himself. He only invites the other party to
make an offer. An invitation to offer is not an offer in the eyes of law and,
therefore, it does not become an agreement after acceptance. (Harvey Vs. Facie)
Example- A catalog of goods, price list, display of
goods with price tags, tender notices, company's prospectus for shares and
debentures, auction notice, etc. are only the invitations to offer.
Rules Regarding Valid Offer Or Essential Elements of A Valid Offer
1. An Offer May be Express or Implied:
When an offer is made by words, written or spoken, it is called an express
offer. When an offer is made by the conduct of parties, it is called an implied
offer. It is not made by words. Both the express and implied offers and lawful
and binding.
Example: (i) Mrs. A says to Mrs. B,
"I am ready to sell my washing machine to you for Rs. 2,000." It is
an express offer. (i¡) A arrives at New Delhi railway station. A coolie picks
up his luggage and takes it to his seat on the train. A does not object to it.
It is an implied offer by the coolie to render his services for some payment.
2. An Offer May be General or Specific:
When an offer is made to the general public, it is called a general offer.
It can be accepted by anyone satisfying the terms of the offer. Case of Carlill Vs
Carbolic Smoke Ball Co. is important in this reference. When an offer is made
to a certain person or persons, it is called a specific offer. It can be accepted
only by that person or persons before whom it is made. The case of Boulton Vs Jones
is important in this reference. Both general and specific offers are lawful and
binding.
3. An Offer Must Create Legal Obligations:
An offer, to be lawful, must create legal obligations. For this
reason, offers of domestic nature and social offers are not binding. The case of
Balfour Vs Balfour is important in this reference.
Example- Mrs. A invited the family
of Mr. and Mrs. B to dinner. It is a social offer and, therefore, not binding.
4. The Offer Must be Certain, Definite, and not Vague:
An offer, to be lawful, must be certain, definite and
it should not be vague. All the material terms of the offer must be clear.
5. Offer Must be Distinguished from Invitation to Offer:
An offer and an invitation to offer are different. An
offer is binding but an invitation to offer is not binding.
Example- Railway timetable, price
list, catalog, display of goods, and tender notice are only the invitations to offer.
These are not binding and, therefore, cannot be accepted as such.
6. The Offer Must be Made with a View to Obtain the Consent of Offeree:
The offer and the statement are different. An offer is binding only if it is made with an intention to obtain the consent of the offeree.
Example- D says to E, "I am not doing well in my
business, therefore, I want to sell it out. "It is not a valid offer
because there is no intention of obtaining any consent.
7. The Offer Must be Communicated:
An offer is complete only when it is communicated to the person or persons to
whom it is made. If it is not communicated, it cannot be accepted. An
acceptance in the ignorance of the offer makes no agreement.
Example- Lalman Sukia Vs Gauri Dutt: The nephew of Gauri Dutt was missing. He sent his munimji Lalman to search out the
missing boy. Meanwhile, Gauri Dutt offered a reward of Rs. 501 to anyone who
could trace the boy but Lalman had no knowledge of this offer. He found the boy
and brought him home. Later he claimed the reward. Held, since the offer is not
communicated to Lalman Sukia, it is not binding and, therefore, Gauri Dutt is
not liable to pay the reward.
8. An Offer May be Conditional but the Special Conditions of Offer must be Well Communicated:
Generally, the offer
is unconditional but under certain conditions, it may be conditional. All the
conditions of the offer must be clearly written and communicated to the offeree.
