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Answer
Introduction
The offer/proposal is defined under section
2(a) of Indian contract act, here and after refers as ICA, 1872 as:
When one person signifies to another person,
his willingness to do or not to do something, with the view to obtain his
assent, he is set to make an offer.
The person who makes an offer is called “Offeror”
or “Promisor” and the person to whom the offer is made is called the Offeree”
or “Promisee”.
Essential elements of an offer: -
I.
There
must be two parties
An offer can’t be concluded without the 2
parties: Offeror and offeree. The person who makes an offer is called,
“offeror” whereas the person who accepts that offer is called “Offeree”.
II.
The
offer must be communicated to the offeree
The
offer is completed only when it has been communicated to the offeree. Until the
offer is communicated, it cannot be accepted. Thus, an offer accepted without
its knowledge does not confer any legal rights on the acceptor.
Case: Lalman Shukla v. Gauri Datt: A's nephew had absconded from his home. He
sent his servant to trace his missing nephew. When the servant had left, A then
announced that anybody who discovered the missing boy would be given the reward
of Rs. 500. The servant discovered the missing boy without knowing the reward.
When the servant came to know about the reward, he brought an action against A
to recover the same.
It
was held that the servant was not entitled to the reward because he did not
know about the offer when he discovered the missing boy.
III.
The
offer must be made with a view to obtaining the assent of the offeree
When a person is making an offer, it means that
he is making it with a view to obtain the consent of the offeree. As soon as
the offeree accepts it, the offeror is bound by it.
IV.
The
offer must have its terms definite and clear
The
terms of an offer must be definite, clear and certain. If the terms of the
offer are vague and uncertain, no contract will come into existence.
Example:
A offered to sell hundred
tons of oil to B. The offer is uncertain as there is nothing to show what kind
of oil is intended to be sold.
V.
The
offer must be capable of creating legal relationship
An
offer must be such that when accepted it will result in a valid contract. A mere
social invitation cannot be regarded as an offer, because if such an invitation
is accepted it will not give rise to any legal relationship.
In
case of Balfour v. Balfour: There 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.
VI.
Offer
must be distinguished from invitation to offer
The terms of the offer should be such that they
contain final willingness of the offeror. Sometimes, a party does not express
his final willingness but proposes certain terms on which he is willing to
negotiate, the same is called invitation to offer. In such cases, he is not
making an offer because he is not expressing his final willingness to enter
into a contract.
Example: Menu card of restaurant is an invitation to put
an offer.
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