Offer is defined under sec 2(a) of Indian Contract Act, 1872 which says that ‘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 is the first step towards an agreement a person making an offer is known as the offeror proposer.
Essentials of a valid offer
- Offer must be expressed or implied
That is it should be either a written or oral statement or incases of implied offer it must be inferred from the conduct of the party.
- Must be made with an intention to create legal relations
The agreement must be created with an intention of creating a legal obligation or with a legal object.
- Terms of the offer must be definite and certain
That is the agreement that is not certain or capable of being certain would be void under the act example of which is wagering or contingent contract.
- Offer must be specific or general
That is all the specification of a contract must be well defined while initiating an offer to avoid any further confusion.
- Offer must be communicated by the offeror in a prescribed mode of communication or otherwise.
- An offer should not contain any term the non-compliance of which amounts to acceptance.
That is it should not say it not completed under a given time that would be considered as an acceptance. Moreover, silence in that matter shouldn’t consider as yes in any case.
- Two identical offers do not result in a contract.
- A mere invitation to an offer is not an offer
For example, if you go to a restaurant to have dinner then the menu card given by the waiter/ waitress is not an offer but is considered to be a mere invitation to an offer.
Now the communication of an offer is completed when it comes to the knowledge of a proposee or offeree. We broadly classify offer into four types:
Specific offer- That is an offer made by the offeror to a specific person means A proposing a contract to B. In which the acceptance must be only communicated by B to A or in his/ her absence it must be communicated by their assigned agent.
General offer- Offer made to the public in general and no specific person under the law. So here, any person in interest can accept the offer by performance of the certain act proposed by the offeror. An example is of lost and found cases.
Cross offer- Cross offer is said to be made when two people in interest make an identical offer to each other in absence of knowledge of being made to each other. Here even if the offer is cross offer is still it is considered to be valid under the law.
Counteroffer- After the proposal of the original offer the offeree makes a counteroffer stating a condition to that of the original offer proposed in this case the original offer comes to an end and a new offer arises out of the counteroffer.