For Commercial Law Students

1. OFFER AND
ACCPETANCE

2. Offer and Acceptance
 An agreement arises when one party makes an offer
and the other party accepts it.
 When a person shows his willingness to do or not to
do something to obtain the consent of other person ,
it is considered a proposal.
 OFFER/PROPOSAL

3. Parties of the contract
Offeror/Promisor:
The person making the offer.
Offeree/Promisee /Acceptor.
The person to whom the offer is made is called
the offeree.
The person accepting the offer called
promisee or acceptor.

4. Essentials of a Valid Offer
1. An offer which is made by words spoken
or written.
An Offer appears from the actions, Conduct
of parties or circumstance of the case.

5. It must create Legal Relations.
 Parties intend to create legal relations
between the parties.

6. It May be specific or General
 Offer made to a specific person.
 A general offer is one which is made to public
in general. Can be accepted by any one.

7. It must be definite and clear
 Terms of offer must be clear.
 Not definite and clear , cannot be called valid
offer.

8. It must be communicated
 Legally Effective only when it is
communicated to the offeree.
 Brought to the knowledge/notice of offeree.
It must not contain any negative condition.

9. It is different from Invitation to
offer.
 In invitation to offer ,the person making
invitation does not make an offer but only
invites the other party to make an offer.
 A mere declaration of intention and not to a
proposal.
 Prospectus issued by the University.
 Prospectus issued by the Company.
 Invitation to Bid, Price Tag display, catalogue.

10. REVOCATION OF OFFER.(Sec-6)
 Notice of Revocation:
 Notice of revocation
 Before acceptance.
 Lapse of Time.
 Terminate, when specified time is expired.
 Lapse of Reasonable time, depends upon
the circumstance of each case.

11.  Failure to fulfill condition.
 Fails to fulfill the Condition mention it.
 Death or Insanity of the Offeror.
 Before acceptance, comes to knowledge of
acceptor.
 Revocation of offer by offeree.
 Offeree rejects the offer
 Communicate the rejection to the, offeror.
(Period not Expire)

12.  Subsequent illegality.
 Become illegal due to change of law before its
acceptance.
 Destruction of Subject matter.
 Subject matter of offer destroys before the
acceptance.

13. Acceptance
 The person to whom the proposal is made
 Signifies his assent.

14. Essentials of Valid Acceptance
 It must be given by the Offeree.
 It must be Absolute and Unconditional
 It must be in Prescribed Manner
 It must be Communicated to the offerror.

15.  It may be Express or Implied
 It must Follow the offer
 It must be given within reasonable time.

16. Conclusion
 Offer and acceptance are the two basic
elements which comprise an agreement.
 Offer has no legal consequence or value
unless it is accepted.
 Formation of an agreement becomes
complete on the acceptance of offer.