PROJECT ON

SIGNIFICANCE OF OFFER

SUBMITTED TO

Mr.Govinda Rajan

(Associate professor in Law of Contracts)

Submitted by

P.PRASHANNA GURUPARAN

I B.A.LLB (Hons)

Reg No: BAO150032

ACKNOWNLEDGMENT

At the outset, I take this opportunity to thank my Professor Mr.Govinda Rajan from the

bottom of my heart who has been of immense help during moments of anxiety and torpidity

while the project was taking its crucial shape.

Secondly, I convey my deepest regards to the Vice Chancellor Arun Roy and the

administrative staff of TNNLS who held the project in high esteem by providing reliable

information in the form of library infrastructure and database connections in times of need.

Thirdly, the contribution made by my parents and friends by foregoing their precious

time is unforgettable and highly solicited. Their valuable advice and timely supervision paved

the way for the successful completion of this project.

Finally, I thank the Almighty who gave me the courage and stamina to confront all

hurdles during the making of this project. Words aren’t sufficient to acknowledge the

tremendous contributions of various people involved in this project, as I know ‘Words are Poor

Comforters’. I once again wholeheartedly and earnestly thank all the people who were involved

directly or indirectly during this project making which helped me to come out with flying

colours.

DECLARATION

I, P.Prashanna guruparan do hereby declare that the project entitled “Significance of

offer ” submitted to Tamil Nadu National law school in partial fulfilment of requirement of

award of degree in undergraduate in law is a record of original work done by me under the

supervision and guidance of Professor Mr. K.Govinda Rajan, department of Law of Contracts,

Tamil Nadu National law school and has not formed basis for award of any degree or diploma or

fellowship or any other title to any other candidate of any university.

P.Prashanna gurpran

B,A.,LLB(Hons)

Research Methodology

The research methodology used in this project is analytical and descriptive. Data has been

collected from various books, materials, papers and web sources. This project is based upon non-

doctrinal method of research. This project has been done after a thorough research based upon

intrinsic and extrinsic aspects of the project.

CONTENTS

CONTRACT

AGREEMENT

FREEDOM OF CONTRACT

INTRODUCTION

OFFER

ESSENTIALS OF VALID OFFER

CONCLUSION

CASES REFERRED

CONTRACT:

The term contract is defined in section 2(h) of the Indian contract Act , 1872 , as follows

“An agreement enforceable by law is a contract “, thus for the formation of a contract

there must be

1. An agreement

2. The agreement should be enforceable by law.

AGREEMENT:

“Agreement” is defined in sec 2(e) as every promise and every set of promises forming

the consideration for each other”. And a promise is defined as an accepted proposal. Sec 2(b)

says; “A proposal, when accepted, becomes a promise”. This is another way of saying that an

agreement is an accepted proposal. The process of definition comes down to this, a contract is an

agreement, an agreement is a promise and a promise is an accepted proposal. Thus every

agreement, in its ultimate analysis, is a result of a proposal from one side and its acceptance by

the other .

NATURE AND CONTRACTUAL OBLIGATION:

The purpose of a contract is to establish the agreement that the parties have made and to fix

their rights and duties in accordance with that agreement. The courts must enforce a valid

contract as it is made, unless there are grounds that bar its enforcement. The courts may not

create a contract for the parties. When the parties have no express or implied agreement on the

essential terms of a contract, there is no contract. Courts are only empowered to enforce

contracts, not to write them, for the parties. A contract, in order to be enforceable, must be a

valid. The function of the court is to enforce agreements only if they exist and not to create them

through the imposition of such terms as the court considers reasonable.

FREEDOM OF CONTRACT:

The idea that contractual obligations are based on agreement must, thirdly, be qualified in

relation to the scope of principle of freedom of contract . In the nineteenth century judges took

the view that persons of full capacity should in general be allowed to make what contracts they

liked ; the law only interfered on fairly specific grounds such as misrepresentation , undue

influence or illegality . It didn’t interfere merely because one party was economically more

powerful than the other and so able to drive a hard bargain .

INTRODUCTION :

THE INDIAN CONTRACT ACT, 1872

The law relating to contracts in India is contained in INDIAN CONTRACT ACT, 1872. The

Act was passed by British India and is based on the principles of English Common Law. It is

applicable to all the states of India except the state of Jammu and Kashmir. It determines the

circumstances in which promises made by the parties to a contract shall be legally binding on

them.

The Act as enacted originally had 266 Sections, it had wide scope and included.

General Principles of Law of Contract- Sections 01 to 75

Contract relating to Sale of Goods- Sections 76 to 123

Special Contracts- Indemnity, Guarantee, Bailment & Pledge- Sections 124 to 238

Contracts relating to Partnership- Sections 239 to 266

The ICA is originated from the Common Law Principles which were practiced in the courts of

England.It represents the body of unwritten law established by customs and usages in England

which had obtained the stamp of approval by the courts in England.

Contracts under seal should posses the following:

Written contract between two persons Registration of that contract Sealed cover Delivery

OFFER :

Section 2{b} says that when the expression of willingness to be bound by the terms of the

offer . the person who gives such acceptance of the offer is called offeree or acceptor .

The term ‘offer’ is derived from the Latin word ‘offerre’ which means ‘present’ . ‘offer’ as a

noun means a proposal to do a thing ; a proposal to be accepted or rejected ; first advance ; the

act of bidding , an attempt ; endeavour . As a verb it means to bring to or before ; to hold out ; to

present for acceptance or rejection ; to exhibit ; to proffer ; to make a proposal to”.

The word proposal of the contract Act ,1872 is synonymous of the term offer of the

English Contract Act . writers of English law have defined the offer as ……an intimation , by

words or conduct , of a willingness to enter into a legally binding contract , and which in its

terms expressly or impliedly indicates that its to become binding on the offeror as soon as it has

been accepted by an act , forbearance , or return promise on the part of the person to whom it is

addressed. (Anson’s law of contract).

IN ENGLAND IN INDIA

Offer = proposal

Offerer = proposer / promisor

Offeree = proposee / promisee

The word proposal is used in the Indian Contract Act in the same sense as the word offer is used

in English law.

An offer when accepted become contract

So, OFFER + ACCEPTANCE = CONTRACT .

ESSENTIALS OF VALID OFFER :

1. The offer must be definite , certain and unambiguous . For eg., A promise of RS.100 or

200 , a vendor selling coconut oil merely shouting oil are instances of uncertain offer .

2. The offer must be capable of acceptance and must give rise to legal relationship . for e.g.,

invitation to marriage , dinner are all domestic offers and hence invalid .

3. The offer may be express or implied for e.g., getting into a bus , hiring a taxi , inserting a

coin into a weighting machine are all implied offers .

4. Offers may be specific or general . salmond calls specific offers as offers to individuals

and general offers are offers at large . for e.g., A offering a pen to B is a specific offer . A

reward for bringing back a lost dog is an offer to public .

5. Invitation to treat is not an offer . It is not an offer to negotiate or receive offers . so

every expression of willingness to enter into a contract may not amount to an offer .

books in a shop for sale , house to let are all examples of invitation to offer and not

actually offers .

6. Tender is not an offer . tender means offer to receive offers . it is an advertisement for

the supply of goods as and when required for a particular period . it is an standing offer . it

becomes a binding contract only when specific order is placed with tenderer.

7. Quotation of price is not an offer . Mere statement of the price of the goods does not amount

to an offer .

8. Offer must be communicated to the acceptor . there can be no acceptance without the

knowledge of offer . for e.g., in reward cases , like bringing back the lost dog , the offeree must

have the knowledge of the reward .

9 . Cross offers do not constitute a valid contract , because there are only two offers , but np

acceptance .

10 . If there are special terms in the offer then they must be brought o the notice of the offeree ,

at the time of making the contract.

11. The communication of the offer is complete . when it comes to the knowledge of the person

to who, it is made .

12. A proposal may be revoked at any time before the communication of its acceptance is

complete when B receives the letter .

13 . MODE OF REVOCATION :

A proposal is revoked :-

1. By the communication of notice of revocation by the proposer to the other party.

2. By the lapse of the time prescribed in such proposal for its acceptance , or if no time is so

prescribed , by the lapse of a reasonable time , without communication of the acceptance.

3. By the failure of the acceptor to fulfill a condition precedent to acceptance or

4. By the death or insanity of the proposer , if the fact of his death or insanity comes to the

knowledge of the acceptor before acceptance .

CONCLUSION :

The contract shall be regarded as concluded, if an agreement has been achieved between the

parties on all its essential terms, in the form proper for the similar kind of contracts. The

contract shall be concluded by way of forwarding the offer (the proposal to conclude the

contract) by one of the parties and of its acceptance (the acceptance of the offer) by the other

party.

CASES REFFERED :

1) TAYLOR VS. PORTINGTON :

A lets his house for three years lease subject to the condition that it would be

thoroughly repaired and decorated according to style . the court held that the contract

was void because of its uncertainty due to qualifying condition .

2 ) CARLILL VS. CARBOLIC SMOKE BALL Co :

The carbolic smoke ball Co were the manufacturer of a medicine called carbolic

smoke ball , a preventive for influenza .

The company advertised that they would pay 1000 to any person who caught influenza

even after using the smoke balls . they deposited 1000 to show their sincerity in their

promise of payment of 1000 . Mrs . carlill used the medicine in the prescribed method

but suffered from influenza subsequently , she sued the company for the reward .the

company contended the following points in their argument or refusal .

a ) the offer was a mere advertisement or puff

b) there was no acceptance for the offer

c) it was a wagering contract , because it was a game of chance

d) the offer was not a specific offer .

Court held that Mrs . carlill was entitled to get compensation , and rejected the

defendant’s contention on the following basis.,

a ) the offer was not a mere puff because of the sincerity in the offer by way of

depositing 1000 in the bank .

b) the performance of the conditions of offer was itself acceptance and hence need not be

accepted by words .

c ) it was not a wagering contract , because here , only one party namely Mrs., carlill

would always win and never lose .

d) even a general offer was a valid offer .

3 ) FISHER VS. BELL :

Bell exhibited a fine nife with a marked price for sale in a show window of his

shop . fisher entered the shop , took the knife and went to the counter to pay the marked

price the shop keeper refused to accept the money . fisher contented that the exhibition

of knife constituted an offer for sale , which he accepted and so it creates a binding

contract . C.J.Parker in his Judgement held that mere display of the knife constitutes only

invitation to an offer not offer . only the buyer fisher was the offerer and the shopkeeper

was the acceptor .

4) LALMAN VS. GAURI DUTT :

The defendant sent the plaintiff , his servant to search for his missing nephew ,

Afterwards , he announced a reward to anyone giving information about the boy . even

without knowing the knowledge of the reward the servant traced the boy and bought him

back . In a suit claiming the reward , the court held that the servant could not succeed

because , he did not have the knowledge of the offer (reward) . further , it was his duty to

bring the boy as he was the defendant’s servant .

BOOKS REFERRED :

CONTRACT –I (general principles ) - Dr. S.R.Myneni

Contract and specific relief – Avtar singh

WORKS CITED :

https://www.law.cornell.edu/wex/contract

http://www.duhaime.org/LegalDictionary/O/Offer.aspx

http://www.lawmentor.co.uk/glossary/C/communication-of-an-offer/