Offer and Acceptance. Chapter 2. Offer. The first essential of a valid contract is an agreement i.e., offer and acceptance. An agreement arises when one party makes an offer and the other party accept it.
2. It must create legal relationship.
3. It must be definite and clear.
4. It may be specific or general: When an offer is made to a specific person or group of persons, it is called specific offer, but a general offer is the one which is made to public in general and it may be accepted by any person who fulfill the required condition.
5. It must be communicated to the offeree. If an offer is not communicated to the offeree, it can not be accepted.
6. It may be subject to any condition.
An offer can be revoked by any of the following ways;
2. Lapse of Time: When offer is kept open until specified time , it terminates if it is not accepted by that time. The reasonable time depends up the circumstances of each case. If the commodity is of perishable nature, the reasonable time will be shorter.
3. Failure to fulfill the condition. An offer us revoked if the offeree fail to fulfill the condition mentioned in it.
A offers to sell his scooter to B for 50000 if B get admission in medical college. B fails to get admission , the offer is revoked.
4. Death or Insanity of the Offeror: An offer is revoked by the death or insanity of the offeror if the fact of his death or insanity comes to the knowledge of the acceptor before acceptance. If the offeree does not know that the offeror has died or become insane and gives his acceptance , it is a valid acceptance . It will result in a valid contract and legal representative of the deceased offeror shall be bound by the contract.
5. Death or insanity of the offeree. An offer can be accepted only by the offeree. It cannot be accepted by his legal representative on his death. If the offeree dies or become insane before acceptance, the offer terminates.
6. Subsequent Illegality: An offer may also terminate, when it becomes illegal due to change in law before its acceptance by the offeree.
A offers to sell 10 bags of rice to B for 2000. before its acceptance, law bans the sale of rice. The offer terminates
7. Destruction of Subject matter: An offer terminates if the subject matter of the offer is destroyed before its acceptance by the other party.
When the offeree signifies his assent to accept the offer then it become acceptance.
A offers to sell his house to B for 50000. B accept the offer. This is an acceptance.
6. It may be expressed or implied.
Example: A widow promised to give some property to her nice if she stayed with her. the niece stayed in her residence till her death. Held the niece was entitled to the property.
When the offer is accepted by the offeree or acceptor then it is called acceptance.
Example: X offer to sell his house to Y for 300,000. Y accept the offer. This is an acceptance.
Against the offeror, when it is put in the course of transmission to him, so as to be out of power of acceptor.
As against the acceptor, when it comes to the knowledge of the offeror.