Offer or Proposal is defined as “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 The offeror or proposer expresses his willingness “to do” or “not to do” (i.e., abstain from doing) something with a view to obtain acceptance of the other party to such act or abstinence. Thus, there may be “positive” or “negative” acts which the proposer is willing to do.
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About Offer or Proposal
According to the Indian Contract Act of 1872, a proposal is basically when one person expresses to another person that they’re up for doing something or refraining from it. The idea is to get the other person to agree to that action or non-action. So, it’s like saying, “Hey, I’m willing to do this or not do that—what do you think?” That expression of willingness is what we call a proposal or an offer in legal terms. It’s like making a friendly suggestion and waiting for the other person to give a thumbs up or down.
Let us look at some features or essentials of such an offer
- The person making the offer/proposal is known as the “promisor” or the “offeror”. And the person who may accept such an offer will be the “promisee” or the “acceptor”.
- The offeror will have to express his willingness to do or abstain from doing an act. Only willingness is not enough. Or simply a desire to do/not do something will not constitute an offer.
- An offer can be positive or negative. It can be a promise to do some act, and can also be a promise to abstain (not do) some act/service. Both are valid offers.
Classification of Offer
There can be many types of offers based on their nature, timing, intention, etc. Let us take a look at the classifications of offers.
General Offer: Think of a general offer like casting a wide net. It’s like saying, “Hey, anyone out there who can solve this puzzle gets a reward!” It’s open to the public, and anyone who meets the criteria can jump in and claim the reward. It’s kind of like a challenge thrown out to everyone.
Specific Offer: Now, imagine you’re selling something specific, like a horse. If you say, “I’m selling my horse for Rs 5000, and I want to sell it to B,” that’s a specific offer. It’s tailor-made for B, and only B can say, “Yes, I’ll take your horse for Rs 5000.” It’s like a one-on-one deal.
Cross Offer: Sometimes, two people can be on the same wavelength without even knowing it. If both A and B send messages to each other at the same time, offering to buy and sell the horse for the exact same price, that’s a cross offer. It’s like a quirky coincidence, but here’s the catch: neither of them can automatically say, “Deal done!” It’s a bit like they’re stuck in an offer loop until someone takes a clear step.
Counter Offer: Let’s say you want to buy a bike, and the seller says it’s Rs 10,000. But you’re not too keen on the price, so you say, “How about Rs 8,000?” That’s a counter offer. You’re kind of haggling and suggesting changes to the original deal. But here’s the twist – when you counteroffer, it’s like saying, “Thanks, but I want to tweak a few things.” At this point, the seller can choose to accept your changes or walk away. It’s a bit of a negotiation dance!
Essentials of a Valid Offer
Here are some of the few essentials that make the offer valid.
Creating Legal Relationships: An offer should result in a contract that holds legal significance and consequences in the event of non-performance. Essentially, it needs to establish a formal commitment. For instance, a casual dinner invitation doesn’t qualify as a valid offer because it lacks the legal weight.
Clarity in Terms: The terms of the offer must be crystal clear and specific. An example of an invalid offer would be if A says they’re selling fruits worth Rs 5000 to B without specifying the types or quantities of the fruits involved.
Communication to the Offer: The offer must be effectively communicated to the person to whom it is made. The offeree needs to be aware of the proposal before they can accept it. A classic case illustrating this is Lalman Shukla v. Gauri Dutt, emphasizing that acceptance without knowledge of the offer is not valid.
Conditional Offers: While acceptance cannot be conditional, the offer itself can be. The person making the offer (offeror) can attach certain terms or conditions to it. For example, A might offer to sell goods to B if B makes a partial payment upfront. B can either accept these conditions or propose alternatives.
Exclusion of Negative Conditions: An offer cannot include conditions that automatically lead to acceptance if not met. For instance, if A states that the offer to sell a cow to B for 5000/- will be considered accepted if not rejected by Monday, it is not a valid offer.
Specific or General Offers: An offer can be directed towards specific individuals or the general public. It could be personalized or open to anyone interested.
Expressed or Implied Nature: An offer can be conveyed through explicit words or implied through the actions and conduct of the offeror. If the offer is made through spoken or written words, it’s termed an express contract. Conversely, if it’s conveyed through actions, it’s an implied contract.
Read Also: Classification of Contracts