Legal Rules Regarding a Valid Offer
A valid offer must be in conformity with the following rules:
1. An offer may be’ express’ or ‘implied’. An offer may be made either by words or by conduct. An offer which is expressed by words, spoken or written is called an ‘express offer’ and the one which is inferred form the conduct of a person or the circumstances of the case is called an ‘implied offer.’ Thus stepping into a taxi and consuming eatables at a restaurant both create implied promise to pay for benefits employed. In Upton Rural District Council v Powell, a fire broke out in the defendant’s farm . believing that he was entitled to the free service of Upton Fire Brigade (which he was not) he summoned it. Upton claimed compensation for its services. Held services were rendered on an implied promise to pay for them.
I will give a few more illustrations in this regard.
Illustration
(a) M says to N that he is willing to sell his motorcycle to him for Rs. 20,000. this is an express offer.
(b) X writes to Y he offers to sell his house to him for Rs. 80,000. there is an express offer.
(a) The Delhi Transport Corporation runs omnibuses on different routes to carry passengers at the scheduled fare. This is an implied offer by the D.T.C.
(b) A shoe shiner starts shining some one’s shoes, without being asked to do so, in such circumstances that any reasonable man could guess that he expects to be paid for this, he makes an implied offer.
2. An offer must contemplate to give rise to legal consequences and be capable of creating legal relations.
If the offer does not intend to give rise to legal consequences, it is not a valid offer in the eyes of law. An offer to a friend to dine at the offeror’s place, or an offer to one’s wife to show her a movie is not a valid offer and as such cannot give rise to a binding agreement, even though it is accepted and there is consideration, because in social agreements or domestic arrangements the presumption is that the parties do not intend legal consequences to follow the breach of agreement. But in the case of agreements regulating business agreements it is taken for granted that parties intend legal consequences to follow. Even in the case of a business agreement if the parties agree that the breach of the agreement would not confer on either of the parties a right to enforce the agreement in a court of law, there is no contract (Rose & Frank Co. vs. Crompton & Brothers Ltd.)
3. The terms of the offer must be certain and not loose or vague. The terms of the offer must be certain and not vague (sec 29). Mangham L.J. has rightly observed: “ unless all the material terms of the contract are agreed, there is no binding obligation.” Thus an agreement to agree in future is not a contract, because the terms of agreement are uncertain as they are yet to be settled.
4. An invitation to offer is not an offer. An offer must be distinguished form an ‘invitation to receive offer’ or as it is sometimes expressed in judicial language an ‘invitation to treat.’ 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 merely to circulate information that he is willing to deal with anybody who, on such information, is willing to open negotiations with him. Such invitations for offers are therefore not offers. In the eyes of law and do not become agreements by their acceptance. We may give some examples of them here.
5. An offer may be a ‘specific’ or ‘general’. There are two kinds of offers - general and specific. The specific order is made to a specific person, while a general offer is made to the world or public at large. However, in case of general offers the contract is made only with that person who comes forward and performs the conditions of the proposal as such performance amounts to the acceptance of performance. Such an offer can be accepted only by the person or persons to whom it is made. Thus, where M makes an offer to N to sell his bicycle for Rs. 200, there is a specific offer and N alone can accept it. A ‘general offer’ on the enter hand is one which is made to the world at large or public in general and may be accepted by and person who fulfils the requisite conditions. The leading case on the subject of ‘general offer’ is that of Carlill vs Carbolic smoke Ball co,”
6. An offer must be communicated to the offeree. The communication of a proposal is complete when it comes to the knowledge of the person to whom it is made (Secn 4). An offer is effective only when it is communicated to the offeree. Until the offer is made known to the offeree, there can be no acceptance and no contract. Doing anything in ignorance of the offer can never be treated as its acceptance, for there was never a consensus of wills. This applies to both ‘specific’ and ‘general’ offers.
7. Cross offers – when two parties make identical offers to each other, in ignorance of each other’s offer, the offers are cross offers. Such offers do not constitute acceptance of one’s offer by the other and as such there is no completed agreement. For eg. A wrote to B offering to sell him certain goods. On the same day, B wrote to A offering to buy the same goods. The letters crossed in the post. There is no concluded contract between A and B.
8. An offer should not contain a term the non- compliance of which would amount to acceptance. Thus 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 grounds of justice.
9. An offer can be made subject to any terms and conditions. An offeror may attach any terms and conditions to the offer he makes. He may even prescribe the mode of acceptance. The offeree will have to accept all the terms of the offer. There is no contract, unless all the terms of the offer are complied with and accepted in the mode prescribed. As regards mode of acceptance, it must be noted that in case of deviated acceptance, for example, if the offeror asks for sending the acceptance ‘by telegram’ and the offeree sends the acceptance ‘by post’ the offer or may decline to treat that acceptance as valid acceptance provided the gives a notice to that effect to the offeree within a reasonable time after the acceptance is communicated to him. If he does not inform the offeree as to this effect, he is deemed to have accepted the deviated acceptance. (sec. 7)
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Legal Rules Regarding a Valid Offer
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