Offer

Offer/Proposal
Concept of Offer
 When two parties choose to enter into a contract, the first thing that occurs
is an offer. So offer is the starting point of making a contract. The offer can
be money or another thing of value in exchange for performance by the
other party.
 In contract law, an offer is a promise in exchange for performance by

another party. An offer can be revoked or terminated under certain
conditions. There are also times when an offer can be negotiated to create a
counter-offer.
Definition of Offer
 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.
[sec: 2(a)]
Features or essentials of an offer
** Let us look at some features or essentials of such an offer:

 The person making the offer/proposal is known as the “promisor” or the “offeror”.
And the person to whom an offer is made is called “promisee” or the “offeree” or the
“acceptor”.
 The offeror will have to express his willingness to do or abstain from doing an act.
Only willingness is not enough. Or simply a desire to do/not do something will not
constitute an offer.
 An offer can be positive or negative. It can be a promise to do some act, and can also
be a promise to abstain (not to do) some act/service. Both are valid offers.
Forms of Expression of Offer
 The offer can come in the form of a:

 Face to face conversation
 Conduct
 Letter
 Newspaper
 Website
 Telephone/Fax
 Email
Classification of Offer
 1. General Offer
 A general offer is one that is made to the public at large. It is not made any
specified parties. So any member of the public can accept the offer and be
entitled to the rewards/consideration.
 Say for example you put out a reward for solving a puzzle. So if any member
of the public can accept the offer and be entitled to the reward if he finishes
the act (solves the puzzle)
 2. Specific Offer
 A specific offer, on the other hand, is only made to specific parties, and so
only they can accept the said offer or proposal. They are also sometimes
known as special offers.
 for example, A offers to sell his horse to B for Tk. 500000/-. Then only B can
accept such an offer because it is specific to him.
 3. Cross Offer
 In certain circumstances, two parties can make a cross offer. This means
both make an identical offer to each other at the exact same time. However,
such a cross offer will not amount to acceptance of the offer in either case.
 For example, both A and B send letters to each other offering to sell and
buy A’s horse for Tk. 10,0000/-. This is a cross offer, but it will be
considered as acceptable for either of them.
 4. Counter Offer
 There may be times when a promise will only accept parts of an offer, and
change certain terms of the offer. This will be a qualified acceptance. He will
want changes or modifications in the terms of the original offer. This is
known as a counter offer. A counter offer amounts to a rejection of the
original offer.
 For example, A makes the offer to B for the car at Tk. 40 lac and B in
response agrees to buy it at Tk. 30 lac.
Rules of Offer
1] An offer may be expressed or implied:

The offeror can make an offer through words or even by his conduct. An offer
which is made via words, whether such words are written or spoken (oral
contract) we call it an express contract. And when an offer is made through the
conduct and the actions of the offeror it is an implied contract.
Rules of Offer
2] Terms of offer must be certain/Offer must be clear, not vague:

The terms of the offer or proposal should be very clear and definite. If the
terms are vague or unclear, it will not amount to a valid offer.
Take for example the following offer – A offers to sell B fruits worth Tk. 5000/-.
This is not a valid offer since what kinds of fruits or their specific quantities are
not mentioned.
Rules of Offer
3] An offer must be communicated to the offeree:
For a proposal to be completed it must be clearly communicated to the offeree. No offeree can
accept the proposal without knowledge of the offer. Thus, an offer accepted without its
knowledge does not confer any legal rights on the acceptor.
Example: A's nephew had absconded from his home. He sent his servant to trace his missing
nephew. When the servant had left, A then announced that anybody who discovered the
missing boy would be given the reward of Tk. 50,000. The servant discovered the missing boy
without knowing the reward. When the servant came to know about the reward, he brought an
action against A to recover the same. But his action failed. It was held that the servant was not
entitled to the reward because he did not know about the offer when he discovered the missing
boy.
Rules of Offer
4] An invitation to treat/offer is not an offer:

An invitation to offer is an act before an offer, in which one person induces another person to make
an offer to him, it is known as invitation to offer. When appropriately responded by the other party,
an invitation to offer results in an offer. It is made to the general public with intent to receive offers
and negotiate the terms on which the contract is created.
Examples:
 Menu card of a restaurant showing the prices of food items.
 Railway timetable on which the train timings and fares are shown.
 A Company invites application from public to subscribe for its shares.
 Recruitment advertisement inviting application.
Rules of Offer
5] Offer may be Conditional:

While acceptance cannot be conditional, an offer might be conditional. The offeror can make the
offer subject to any terms or conditions he deems necessary.
So A can offer to sell goods to B if he makes half the payment in advance. Now B can accept these
conditions or make a counter offer.
6] Offer must create Legal Relations:
The offer must lead to a contract that creates legal relations and legal consequences in case of non-
performance. So a social contract which does not create legal relations will not be a valid offer.
Say for example a dinner invitation extended by A to B is not a valid offer.
Rules of Offer
7] Two cross offers do not make a contract:

Cross-offer is a contract law term that refers to an offer made to another in ignorance that
the offeree has made the same offer to the offeror. In a cross offer both parties state to each
other the same proposal.
An offer by A to sell to B on certain terms and an offer by B to buy from A on the same
terms unaware of the A's proposition at that time, is an example of a cross-offer.
Lapse of Offer
a. An offer may be lapsed after reasonable time.

b. An offer may be lapsed by rejection (by Offeree).
c. An offer may be lapsed by revocation (by Offeror).
d. An offer may be lapsed by the death or insanity of the offeror or offeree.
e. An offer may be lapsed by the destruction of the subject matter.
Revocation of Offer
a. By giving notice.
b. By the lapse of time.
c. By failure to fulfill a certain condition.
d. By the death or insanity of the offeror.
Who can make an offer?
a. Every adult/major person

b. Every person of sound mind
c. Every qualified person by law. (not an insolvent)
To whom can an offer be made?
a. To any certain person

b. To any uncertain person
c. To mass people. Ex: Auction.

Offer

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Offer/Proposal

 In contract law, an offer is a promise in exchange for performance by

 When one person signifies to another his willingness to do or to

** Let us look at some features or essentials of such an offer:

 The offer can come in the form of a:

1] An offer may be expressed or implied:

2] Terms of offer must be certain/Offer must be clear, not vague:

4] An invitation to treat/offer is not an offer:

5] Offer may be Conditional:

7] Two cross offers do not make a contract:

a. An offer may be lapsed after reasonable time.

a. Every adult/major person

a. To any certain person

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