03 Chapter - 2 - Offer and Acceptance

Chapter 2
Offer and Acceptance

Md. Adib Rahman
Lecturer, Department of MPE, AUST
1
The Indian Contract Act,1872
Section 2(a) of Indian contract act defines
“Offer as when one person signifies to another his willingness to

do or to abstain from doing something with a view to obtaining the
assent of other, such act or abstinence is said as proposal.”
2
Legal rules regarding valid offer
• An offer may be express or implied
• It should give rise to legal consequences and be capable of creating legal relations
• The term of the offer must be certain
• An offer can be made subject to any terms and conditions
• It should be made with an intent to obtain the assent of the other party
• An offer should not contain a term the non compliance
• Two identical cross offers do not make a contract
• An invitation of offer is not an offer 3
Invitation to offer
• Display of goods by a shopkeeper in his window, with prices marked on
them, is not an offer but merely an invitation to the public to make an offer
to buy the goods at the marked the prices.
• A sees an article marked ‘price rupees twenty’ in B’s shop. He offers B

Rs. 20 for the article. B refuses to sell saying the article is not for sale.
Held A cannot force B to sell him the article at Rs. 20. Marking of price of
an article amounts to an invitation to offer and not an offer 4
Lapses and revocation of Offer
• An offer lapses after stipulated or reasonable time
• An offer lapses by not being accepted in the mode prescribed
• An offer lapses by rejection
• An offer lapses by the death or the insanity of the offeror or the offeree before
acceptance
• An offer lapses by revocation before acceptance
• An offer lapses by subsequent illegality or destruction of subject matter.
5
When communication is
complete
• Communication of offer- The communication of offer is complete when it
comes to the knowledge of the person to whom is made.
• Communication of acceptance- As against the proposer-when it is put into

course of transmission to him so as to be out of the power of the acceptor. As
against the acceptor- when it comes to the knowledge of the proposer.
6
Time of revocation
of offer and acceptance
• Revocation of offer- A proposal may be revoked at any time before the
communication of its acceptance is complete as against the proposer but not
afterwards.
• Revocation of acceptance- An acceptance may be revoked at any time before

the communication of the acceptance is complete as against the acceptor, but
not afterwards.
7
Example
• A proposes by a letter sent by post to sell his product to B. The letter is posted
on the 1st of the month. B accepts the proposal by a letter sent by post on the
4th. The letter reaches A on 6th
• A may revoke his offer at any time before B post his letter of acceptance i.e 4th
but not afterwards.
• B may revoke his acceptance at any time before the letter of acceptance
reaches A i.e 6th but not afterwards. 8
Types of offer
• General & specific offer
• Express & implied offer
• Positive & negative offer
• Cross offer
9
General and Specific offer
• General offer made to the whole world at large but Specific offer made to some
specific person.
• General offer can be accepted by any person having notice of the offer by doing
what is required under the offer but Specific offer can be accepted only by
person to whom it was made.
10
Case Study
11
Case Study
Carbolic smoke ball company advertised in the newspaper that whosever would take
smoke balls, manufactured by it, according to the printed instructions would not contract
influenza. The company offered a reward of $100 to anyone who contracted influenza
after taking its smoke balls according to the printed instructions. It was added that $1000
was deposited with alliance bank to show the sincerity of the company. Mrs. Carlill used
the smoke balls according to the directions given but contracted influenza. It was held that
the offer was general one, and Mrs. Carlill had accepted it by acting according to the
advertisement and therefore the company could not get away from responsibility by
saying that it was a mere puff.
She was entitled to get reward. 12
ACCEPTANCE
Section 2(b) states that
A proposal when the person to whom the proposal is made signifies his assent thereto
the proposal is said to be accepted
13
Legal rules regarding
Acceptance
• Acceptance must be given only by the person to whom the offer is made
• Acceptance must be absolute and unqualified
• It should be communicated by the acceptor
• It should be given within reasonable time or time stipulated
• Acceptance must succeed the offer
14
Case Study 2
Nabil says in conversation to Shah that he will give Tk. 10,00,000 to a
person whosoever marries his daughter. Zahir marries Nabil’s
daughter and files a suit to recover Tk. 10,00,000. Will he succeed?
15
Solution
• No, Nabil has expressed his wish only, and has never made an offer
with a view to obtaining the assent of the other party.
• Secondly there was no offer to Zahir or Shah. It was neither general

offer nor specific offer.
16
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Chapter 2

Offer and Acceptance

“Offer as when one person signifies to another his willingness to

• A sees an article marked ‘price rupees twenty’ in B’s shop. He offers B

• Communication of acceptance- As against the proposer-when it is put into

• Revocation of acceptance- An acceptance may be revoked at any time before

• Secondly there was no offer to Zahir or Shah. It was neither general

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