Lec 3 Offer or Proposal

8/3/2019 Lec 3 Offer or Proposal

1/11

OFFER or PROPOSALOFFER or PROPOSAL

PROPOSAL:PROPOSAL:

When a person signifies toWhen a person signifies toanother his willingness to doanother his willingness to door to abstain from doingor to abstain from doing

anything, with a view toanything, with a view toobtaining the assent of thatobtaining the assent of thatother to such act orother to such act orabstinence, he is said toabstinence, he is said tomake a proposalmake a proposal

There must be an expressionThere must be an expressionof the willingness by oneof the willingness by one

person to another to do orperson to another to do orabstain from doingabstain from doing

something.something.

The expression ofThe expression ofwillingness must be made towillingness must be made toobtain the assent of the otherobtain the assent of the other

person to such act orperson to such act orabstinence.abstinence.

Intention to create legalIntention to create legal

right.right.


2/11

ExamplesExamples

A offers to sell his car toA offers to sell his car to

B for Rs. 3 Lac. A isB for Rs. 3 Lac. A is

making an offer to B.making an offer to B.

A says to B, I amA says to B, I am

willing to sell my car for Rs.willing to sell my car for Rs.

3 Lac. Are you interested to3 Lac. Are you interested to

buy it?. A makes an offerbuy it?. A makes an offer

to Bto B

Promisor / OfferorPromisor / Offeror

Offeree /Promisee/Offeree /Promisee/

acceptoracceptor


3/11

Essentials of a Valid OfferEssentials of a Valid Offer

1.1. It may be express or ImpliedIt may be express or Implied

Express offer:Express offer: Offer made by word spoken or written.Offer made by word spoken or written.

Example: A says to B that he will sell his motorcycle to him for Rs.50,000/-.Example: A says to B that he will sell his motorcycle to him for Rs.50,000/-.

Implied Offer:Implied Offer: Offer which is inferred from the conduct of a person or theOffer which is inferred from the conduct of a person or thecircumstances of the casecircumstances of the case

Example: A railway Coolie carries the luggage of B without being asked to do so.Example: A railway Coolie carries the luggage of B without being asked to do so.B allows him to do so. It is an implied OfferB allows him to do so. It is an implied Offer

Case Study:Case Study: A fire broke out in the farm owned by Mr. Powell. He believed that heA fire broke out in the farm owned by Mr. Powell. He believed that hewas entitled to the free services of Upton Rural District Council Fire Brigade and,was entitled to the free services of Upton Rural District Council Fire Brigade and,

therefore, summoned it. The brigade put out the fire. Later it was divulged that Mr.therefore, summoned it. The brigade put out the fire. Later it was divulged that Mr.Powells farm was not within Free service zone of Upton Council. (Upton RuralPowells farm was not within Free service zone of Upton Council. (Upton RuralDistrict Council vs. Powell)District Council vs. Powell)

Query:Query: Is Mr. Powell Liable to pay Upton District Council.Is Mr. Powell Liable to pay Upton District Council.


4/11


2.2. It must create Legal RelationsIt must create Legal Relations

Intention to create a legal rightIntention to create a legal right Give rise to legal ObligationsGive rise to legal Obligations

Examples:Examples: A invites B to dinner and B accepts the invitation. ItA invites B to dinner and B accepts the invitation. It

does not create any legal relations, so there is no agreement.does not create any legal relations, so there is no agreement.

A offers to sell his watch to B for Rs.200 and B agrees.A offers to sell his watch to B for Rs.200 and B agrees.Legal Relation is created.Legal Relation is created.


5/11


3.3. It may be Definite & ClearIt may be Definite & Clear

Example:Example:

A has two motorcycles. He offers B to Sell one motor Cycle for Rs.A has two motorcycles. He offers B to Sell one motor Cycle for Rs.

30,000/-. B cannot enforce this agreement because it is not clear30,000/-. B cannot enforce this agreement because it is not clearwhich motorcycle A wanted to sell.which motorcycle A wanted to sell.

Case Study:Case Study:

Mr. Portington purchased a horse from Mr. Taylor and promised to buyMr. Portington purchased a horse from Mr. Taylor and promised to buyan other horse, if the first one proved lucky. Later Mr. Portingtonan other horse, if the first one proved lucky. Later Mr. Portingtonrefused to buy the second horse. (Taylor vs. Portington)refused to buy the second horse. (Taylor vs. Portington)

Query:Query: Can Mr. Taylor enforce this agreement?Can Mr. Taylor enforce this agreement?


6/11


4.4. It is different from Invitation to receive offer/invitation to treatIt is different from Invitation to receive offer/invitation to treat

an invitation to receive offer is an invitation to receive offer. The person sending outan invitation to receive offer is an invitation to receive offer. The person sending outinvitation does not make an offer but only invites the other party to make an offerinvitation does not make an offer but only invites the other party to make an offer

ExamplesExamples

Quotations, Catalogues of prices, display of goods with prices, display of goods in auction ofQuotations, Catalogues of prices, display of goods with prices, display of goods in auction ofsale.sale.


Nickerson, an auctioneer advertised that furniture would be sold by him at his auction HouseNickerson, an auctioneer advertised that furniture would be sold by him at his auction Houseon specified days. Mr. Harris a broker came from London to attend the auction but allon specified days. Mr. Harris a broker came from London to attend the auction but all

furniture was withdrawn from sale. Mr. Harris sued Mr. Nickerson for his loss of time andfurniture was withdrawn from sale. Mr. Harris sued Mr. Nickerson for his loss of time andexpenses. (Harris vs. Nickerson)expenses. (Harris vs. Nickerson)

Query:Query: Will Mr. Harris succeed in recovering damages from Mr. Nickerson?Will Mr. Harris succeed in recovering damages from Mr. Nickerson?


7/11


5.5. It may be Specific or GeneralIt may be Specific or General

Specific Offer:Specific Offer: When offer is made to a specific person or group of personsWhen offer is made to a specific person or group of persons

Example: M makes an offer to N to sell his bicycle for Rs. 800/-, it is a specific offer.Example: M makes an offer to N to sell his bicycle for Rs. 800/-, it is a specific offer.In this case only N can accept it.In this case only N can accept it.

General Offer:General Offer: Offer that is made to public in general.Offer that is made to public in general.Example: A announces in newspaper a reward of Rs. 1,000/- for any one who will returnExample: A announces in newspaper a reward of Rs. 1,000/- for any one who will returnhis lost radio. It is a general offer.his lost radio. It is a general offer.


The Carbolic Smoke Ball Company, issued an advertisement in which the Company offeredThe Carbolic Smoke Ball Company, issued an advertisement in which the Company offeredto pay 100 pounds to any person who contracts flue, after having used their medicine ,to pay 100 pounds to any person who contracts flue, after having used their medicine ,

according to the printed direction. Mrs. Carlill bought and used the medicine according toaccording to the printed direction. Mrs. Carlill bought and used the medicine according tothe directions, but she suffered from flue. She sued the company for the reward. (Carllil vs.the directions, but she suffered from flue. She sued the company for the reward. (Carllil vs.Carbolic Smoke Balls Co.)Carbolic Smoke Balls Co.)

Query:Query: Will Mrs. Carllil succeed in her case?Will Mrs. Carllil succeed in her case?


8/11


6.6. It must be communicated to the OffereeIt must be communicated to the Offeree

Examples:Examples:

A, without knowing that a reward has been offered for the arrest of a criminalA, without knowing that a reward has been offered for the arrest of a criminaland informs Police. A cannot recover the reward as he is not aware of itand informs Police. A cannot recover the reward as he is not aware of it


Gauri Datts nephew was missing from home. He sent his servant, Mr. Lalman, inGauri Datts nephew was missing from home. He sent his servant, Mr. Lalman, insearch of the boy. After the servant has left, Mr. Datt announced a reward of Rs.search of the boy. After the servant has left, Mr. Datt announced a reward of Rs.501/- to any one giving information relating to the boy. The servant, before seeing501/- to any one giving information relating to the boy. The servant, before seeingthe announcement, had found the boy and informed Mr. Datt. Later, on reading thethe announcement, had found the boy and informed Mr. Datt. Later, on reading thenotice of reward, the servant claimed it. (Lalman vs. Gauri Datt)notice of reward, the servant claimed it. (Lalman vs. Gauri Datt)

Query:Query: What will be the outcome of the caseWhat will be the outcome of the case


9/11


7. It should not contain Negative Condition7. It should not contain Negative Condition

An Offer should not contain a condition the non-compliance of whichAn Offer should not contain a condition the non-compliance of whichmay be assumed as acceptance e.g. an Offeror cannot say that ifmay be assumed as acceptance e.g. an Offeror cannot say that ifacceptance is not communicated up to a certain date, the offer would beacceptance is not communicated up to a certain date, the offer would be

presumed to have been accepted.presumed to have been accepted.

8.8. It may be subject to any Terms & ConditionsIt may be subject to any Terms & Conditions

Example:Example: A asks B to send the reply of his offer by telegram but B sendsA asks B to send the reply of his offer by telegram but B sends

reply by letter. A may reject such acceptance, because it is opposed toreply by letter. A may reject such acceptance, because it is opposed tothe prescribed mode of communication.the prescribed mode of communication.

A offers to sell his car for Rs. 5 lacs subject to consideration beingA offers to sell his car for Rs. 5 lacs subject to consideration beingmade in cash. B replies to the offer but intends to pay through cheque.made in cash. B replies to the offer but intends to pay through cheque.A may reject acceptance.A may reject acceptance.


10/11


9. It must not contain cross offers9. It must not contain cross offers

When two parties make similar offers to each other, inWhen two parties make similar offers to each other, inignorance of each others offer, such offers are calledignorance of each others offer, such offers are calledcross offers. The acceptance of cross offers does notcross offers. The acceptance of cross offers does not

result in complete agreement.result in complete agreement.

Example: On August 20, 2008, A wrote to B toExample: On August 20, 2008, A wrote to B tosell him 100 tons of iron at Rs. 5,000/- per ton. On thesell him 100 tons of iron at Rs. 5,000/- per ton. On the

same day B wrote to A to buy 100 tons of iron atsame day B wrote to A to buy 100 tons of iron atRs. 5,000/- per ton. There is no acceptance in eachRs. 5,000/- per ton. There is no acceptance in eachothers offer.others offer.


11/11

Revocation and Termination ofRevocation and Termination of

OfferOffer

1.1. Notice of Revocation( before acceptance)Notice of Revocation( before acceptance)

2.2. Lapse of TimeLapse of Time

3.3. Failure to fulfill ConditionFailure to fulfill Condition

4.4. Rejection of Offer by OffereeRejection of Offer by Offeree

5.5. Counter Offer by Offeree (Negotiations)Counter Offer by Offeree (Negotiations)

6.6. Death or Insanity of the Offeror or OffereeDeath or Insanity of the Offeror or Offeree

7.7. Subsequent IllegalitySubsequent Illegality

8.8. Destruction of subject matterDestruction of subject matter

Lec 3 Offer or Proposal

Documents

Transcript of Lec 3 Offer or Proposal