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Essentials of a Valid Offer
The Indian Contract Act, 1872 governs and regulates the formation, performance and completion of contracts while also providing reliefs and liabilities arising from their breach. Its provisions provide a categorical mechanism not only for the creation of contracts but also for the performance of the rights and duties arising from the contract in a due manner.
A contract is although an agreement among persons, enforceable by law however its foundation is laid by an intention to create the legal relationship in itself which is evident from an offer, the first stage of a contract.
What is the Meaning of Offer?
The terms proposal and offer are interchangeable and denotes the same thing in law. However, the Indian Contract Act, 1872 uses the term proposal and provides it definition under Section 2(a) which is as follows −
“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 abstinence, he is said to make a proposal.”
It means in simple terms, that a proposal is basically an expression of the intention of a person to do something in order to attain the acceptance of the other person to whom the proposal is made.
Essentials of an Offer to be Valid
The making of an offer might seem elementary although it needs to be made in proper form and manner in order to be a valid proposal in the eyes of law because it acceptance by other person results in formation of a contract along with its privileges and liabilities.
Therefore, there are some factors which are required to be complied with in order to make an offer valid.
Intention − An offer must be made with the intention of creating legal relationship so as to result in a valid contract with enforceable claims upon its acceptance.
Definiteness − An offer must be certain, precise and unambiguous
Type − It must be different from a mere statement of intention and an invitation to offer, because neither their acceptance creates a contract nor they can be accepted by the person to whom they are made.
Mode − An offer can either be express or implied. The offer is express when it is made by words either written or spoken; and it is implied when it can be inferred from the conduct of the party.
Receiver − The offer can either be general (made to world at large) or specific (made to definite persons).
Communication − The offer must be communicated to the person to whom it is made as specified in Section of the Act and this is the most crucial stage of an offer because it signifies the intention of the person to create a legal relationship and once the offer is comes to the knowledge of the person to whom it is made, its communication seems complete.
Duration − An offer is available for acceptance during the time specified by its maker and of there is no specified time then after a period of reasonable time, the offer ends itself.
Promiser − The person who makes the promise or proposal of offer is called the “promisor” and the person who accepts the proposal is called the “promisee”.
Different Types of Offers
The following are the types of offers −
Invitation to Offer − An Invitation to Offer or Treat is different from an offer because it is prior stage of making an offer and its acceptance does not constitute a contract. Instead, invitation to offer is just a communication or sharing of the information with respect to willingness of a person with whom a contract can be made. Thus, invitation to offer is basically an invitation to others to make an offer on the basis of that invitation.
Cross-Offer − A Cross-Offer also differs from an offer in the sense that when a person makes an offer to another person, then instead of accepting the offer, the latter person makes another offer to the former. Thus, it would be the acceptance of the first person of the second offer that would form a contract as the first offer is destroyed by the making of the second offer.
Standing Offer − A Standing, Continuing or Open Offer is basically an offer which allows the acceptance during a definite period of time by making orders on time-to-time basis.
Conclusion
Henceforth, making and communication of offer is extremely crucial in order to pave the way forward for creation an agreement which would give rise to different claims and reliefs of individuals in various way. Also, acceptance of an offer is although not binding on any person however, its acceptance cannot be performed unless the offer is not communicated in a usual mode and to the right person to who it is made.
Frequently Asked Questions
What is the difference between a Cross-Offer and an Invitation to Offer?
A cross-offer is made in response to the original offer and once the former is made the latter lapse. However, an invitation to offer is just an invitation make an offer and when the latter offer is made the former invitation to offer subsists. Also, cross-offer is made to change the original offer however, when an offer is made in response to the invitation to offer, then the former contains the same content of the latter.
When does an offer completes communication and the stage of acceptance begins?
Communication of an offer is complete when it comes to the knowledge of the person to whom it is made and this completion paves the way for the Offeree to decide whether to accept, reject or hold the offer.
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