Contract and Offer

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  • Topic: Contract, Offer and acceptance, Contractual term
  • Pages : 5 (1513 words )
  • Download(s) : 610
  • Published : April 18, 2013
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Introduction
A contract is defined as an agreement enforceable by law. Hence for all contracts there should have an agreement. The agreement arises by one of the parties making an offer and its acceptance by the other party. Both offer and acceptance create an agreement. In simple contract should first contain an offer made by one party to the other.

What is an offer?
As per Sec 2(a) of the contract act “When one person signifies to another his willingness to do or abstain from doing anything, with a view to obtaining the assent of that others to such act or abstinence is said to make a proposal”. The word offer of the English law is synonymous to the word proposal of Indian contract act. The person making the proposal is called the proposer or offeror and the person accepting the proposal is called the offeree. A proposal is an expression of will or intention. A person making the proposal that he is willing to contract on the terms stated in it. The proposal is made to obtain the assent of the other party to whom the proposal is made. When “A” expresses his willingness to sell motor car for Rs.10, 000 with a view to get B’s acceptance to his offer, A is said to make a proposal.

How is offer made?
Offer is made either by words spoken or by words written. This is an express offer. If A either tells or writes to B that he is prepared to sell his car for Rs.20, 000 it is an express offer. An offer is made by conduct or behaviour. Then it is an implied offer. For example, A is standing in a queue for getting ticket for a train. Characteristics of valid offer

1)The terms of an offer must be clear and certain or at least capable of being made certain. The terms of an offer must be definite, certain and clear. It should not be indefinite, loose or vague. The vagueness of an offer will not create any contractual relationship. The main reason is that the court cannot say what the parties are to do or expected to do a vague offer does not convey what exactly it means. Example:-

A agrees to B a hundred tons of oil. There is nothing what so ever to show what kind of oil whether coconut or gingili oil was intended to be sold. Hence the agreement is void for uncertainty and vagueness under section 29 of the contract act. In Taylor Vs Portington A agreed to decorate the room according to present style, the court held that present style is vague and uncertain term and therefore the promise could not be enforced. According to section 29 of the contract act, the agreement in which the term is not certain or capable of being made certain are void and the same cannot be enforced in a court of law. 2)Offer must be communicated to the offeree

An offer becomes effective only when it has been communicated to the offeree, otherwise it cannot be known whether the parties are of the same mind. Until an offer is made known to the offeree, he does not know what he has to accept. The offeree must have some knowledge about the offer. Otherwise any act done by him will not create any contractual obligations. In Fitch Vs Snedakar a person gave information (which would lead to the arrest of the murderers of two policemen) without knowing that an award was offered for it, and claimed the award subsequently. It was held that he was not entitled to the award as he was not aware of the same. 3)An offer must be made with an intention of creating legal obligations The most important characteristic of a valid offer is that it must create legal obligation among the parties, otherwise it is not an offer in the eye of law. An offer will not become a promise unless it is made with a view to create legal obligations. If the parties agree that breach of entire party will not give rise to legal rights...
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