An offer is a proposal by one person to another to enter into a contract. The term offer is defined under
Section 2 (a) as under: ‘When one person signifies to another, his willingness to do or abstain from doing anything with a view to obtaining the assent of the offer, to such an act or abstinence, he is said to make a proposal’.
- The ‘offer’ must be with the intent to create a legal relationship.
- The offer must be certain and definite. It must not be vague.
- The offer must be express or implied.
- The offer must be distinguished from an invitation to offer.
- The offer must be either specific or general.
The offer must be communicated to the person to whom it is made.
- The offer must be made with a view to obtaining the consent of the offeree.
- An offer can be conditional but there should be no term in the offer that noncompliance would amount to acceptance.
When an offer made at large or in public or in general this offer is known as General Offer. It can be accepted by any individual or public at large whoever is interested in the offer offered. When a person accepts the offer given then offeror and offeree enter into contract. The reward will be given to that person who completed the task given or fulfilled the given condition.
The offer which is made to an individual or to a specific group of individual is said to be Specific offer. It can be accepted by that individuals or that group of individual.
Example : Sandhya offer to buy a car from Sona for Rs. 10 lakh. Thus, a specific offer is made to a specific person , and only Sona can accept the offer.
When an offeror makes an offer to offeree and offeree with some modification in it makes converse offer which makes initial offer void and the other comes in existence, which reverse the party from offeror and offeree to offeree and offeror respectively this type of offer is known as counter offer.
When the offeror and offeree make the same offer to one another having same terms out of knowledge of each other is known as cross offer. In this case there will be no contract due to acceptance of the offer offered.
When an offer is given by body posture, gesture or by action or by the conduct of the offeror is known as implied offer. The offeree can accept the offer by understanding the action of the offeror.
When an offer is express in written or in verbal form then this offer is known as expressed offer. For example : “C” writes a letter to “D” to buy his earphone for Rs.500. This is an expressed offer.
When tender is submitted to supply certain goods or any quantity as and when required it will amount to standing offer. In such a case contract does not come into existence merely when tender is accepted, but a contract takes place only after the order is placed.
Each order in such a case is acceptance and as soon as the offer is accepted the contract comes into existence
Revocation of Offer:
The offer can be revoked by giving notice to the offeree. But this must be done before the offeree accepts and transmits the acceptance.
2. By lapse of time:
This will include two situations.
First when the offer specifies a time limit to accept the offer. In this case, the offer will get lapse automatically after the expiry of the time limit.For Example, Ram makes an offer to Shyam requesting his acceptance within 7 days. Here if Shyam does not give his acceptance within 7 days the offer will get lapse.
Second, when the offer does not specifies any time limit. In this situation, the offer must be accepted within a reasonable time. The offer will get lapse after a reasonable time. The word reasonable time has not been defined under the Act. Hence will depend on case to case basis.
3. By non-fulfillment of the condition precedent to acceptance:
Sometimes the offeror puts some condition which the offeree needs to comply before accepting the offer. If the offeree fails to comply with any such condition the offer gets revoked.
For example, Ram sent an offer to Shyam to buy his car. But he added a condition to the offer that before this Shyam need to buy his cycle. If Shyam fails to buy Ram’s cycle, the offer will be revoked.
4. By death or insanity:
In case of death or insanity of the offeror, the offer gets revoked. This is because the offer cannot be used to make a contract in the future due to the incapability or death of the offeror.
5. By counter offer:
When the acceptor gives an acceptance by adding some condition or modifying the condition of the original offer, this is called a counter offer. The counter offer automatically revoke the original offer.
6. By the non-acceptance of the offer according to the prescribed or usual mode:
The offeree is required to give his acceptance in the mode prescribed by the offeror in the offer. In case if no such mode is prescribed than the offeree needs to give his acceptance in the usual mode or any suitable mode.
If the offeree fails to do the same the offer gets lapse. Now the offeror has the right to accept or reject the acceptance as he likes.
7. By subsequent illegality:
If the offer becomes invalid subsequently, the offer gets revoked automatically. For example, Ram has a business of Liquor in the State of Bihar. Ram gives an offer to Shyam to sell his product on a retail basis. Subsequently, the Government bans the sale of liquor. Now the sale of liquor became illegal, the offer given by Ram to Shyam gets revoke.
Read Complete Article in Details: What is offer in Business Law? Elements of Valid Offer. Legal Rules as to Offer, Types of Offer and Lapse and Revocation of Offer.