Business Law (Offer and Valid Essentials)

Saad irfan
FA19-BBA-032
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Essentialls of
valid offer
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CONTRACT
A written or spoken agreement, especially one

concerning employment, sales, or tenancy, that is
intended to be enforceable by law.
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OFFER AND ACCEPTANCE
OFFER
A promise to do or refrain from doing something in exchange for

something else.
ACCEPTANCE
When the person To whom proposal is made Signifies his assent,

the proposal is said to be accepted.
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ESSENTIALLS OF VALID OFFER
 It may be expresss or implied:
 It must create legal relation:
 It must be definite & clear:
 It is different from invitation to offer:
 It may be specific or general:

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ESSENTIALLS OF VALID
OFFER(CONT’D)
It must be communicated to the offeree
It should not contain negative condition
It may be subject to any terms & conditions

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It may be expresss or implied:
 An offer may be made either by words or by conduct. An offer, which is made by words
spoken or written, is called an express offer. The offer, which is made by the conduct of a
person, is called an implied offer.
 Example:
 1. M says to N that he will sell his motorcycle to him for Rs.40,000. It is an express offer.
 2. A railway coolie carries the luggage of B without being asked to do so B allows him to
do so. It is an implied offer.
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It must create legal relation:
 The offer must be made in order to create legal relations otherwise,

there will be no agreement. If an offer does into give rise to legal
obligations between the parties it is not a valid offer in the eye of law.
 A offers to sell his watch to B for Rs.200 and B agrees. There is an

agreement because here the parties intend to create legal relations
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It must be definite & clear:
 An offer must be definite and clear, if the terms of an offer are not definite and
clear, it cannot be called a valid offer. If such offer is accepted it cannot create a
binding contract.
 Example:
 A has two motorcycles. He offers B to sell one motorcycle for Rs.27,000. It is

not a valid offer because it is not clear that which motor cycle A wanted to sell.
z OFFER IS DIFFERENT FROM INVITATION
 An offer is different from an invitation to offer. It is also called invitation to

treat or invitation to receive offer. An invitation to offer looks like offer but
legally it is not offer.
 In the case of an invitation to offer, the person sending out the invitation
does not make an offer but only invites the other party to make an offer. His
object is to inform that he is willing to deal with anybody who after getting
such information is willing to open negotiations with him.
 Display of goods in an auction sale is not an offer rather it is an invitation to

offer. The offer will come from the buyer in the form of bids.
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It may be specific or general:
 When an offer is made to a specified person or group of persons, it is

called specific offer. Such an offer can be accepted only by the person
or persons to whom it is made. A general offer, on the other hand, is
one, which is made to public in general and it may be accepted by any
person who fulfils the conditions mentioned in it. Both specified and
general offers are valid.
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 Example:
 1. 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.
 2. A announces in a newspaper a reward of Rs.1,000 for any one who

will return his lost radio. It is general offer.
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It must be communicated to the offeree:
 An offer is effective only when it is communicated to the offeree. If an

offer is not communicated to the offeree it cannot be accepted. Thus an
offer, which is not communicated, is not a valid offer. It applies to both
specific and general offers.
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It should not contain negative condition
 An offer should not contain a condition the non-compliance of which

may be assumed as acceptance. An offeror cannot say that if
acceptance is not communicated up to a certain date, the offer would
be presumed to have been accepted. If the offeree does not reply, there
is no contract, because no obligation to reply can be imposed on him,
on the ground of justice no agreement because such condition cannot
be imposed on the offeree. It is only a one sided offer.
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Example
 A wrote to B offering to sell his book for Rs.500 adding that if he

didn’t reply with in 5 days, the offeree would be presumed to have
been accepted.
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It may be subject to any terms & conditions:
 An offeror may attach any terms and conditions to the offer he makes.
He may even prescribe the mode of acceptance. There is no contract,
unless all the terms of the offer are accepted in the mode prescribed by
the offeror
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Example:
 A 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 to the
prescribed mode of communication
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Saad irfan

A written or spoken agreement, especially one

A promise to do or refrain from doing something in exchange for

When the person To whom proposal is made Signifies his assent,

ESSENTIALLS OF VALID OFFER

 It may be expresss or implied:

 It must create legal relation:

 It must be definite & clear:

 It is different from invitation to offer:

 It may be specific or general:

It must be communicated to the offeree

It should not contain negative condition

It may be subject to any terms & conditions

It must create legal relation:

 The offer must be made in order to create legal relations otherwise,

 A offers to sell his watch to B for Rs.200 and B agrees. There is an

 A has two motorcycles. He offers B to sell one motorcycle for Rs.27,000. It is

 An offer is different from an invitation to offer. It is also called invitation to

 Display of goods in an auction sale is not an offer rather it is an invitation to

 When an offer is made to a specified person or group of persons, it is

 1. M makes an offer to N to sell his bicycle for Rs.800, it is a specific

 2. A announces in a newspaper a reward of Rs.1,000 for any one who

 An offer is effective only when it is communicated to the offeree. If an

 An offer should not contain a condition the non-compliance of which

 A wrote to B offering to sell his book for Rs.500 adding that if he

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