CA FOUNDATION BUSINESS LAW SERIES OFFER AND ACCEPTANCE 1

Ø  CA FOUNDATION BUSINESS LAW SERIES
OFFER AND ACCEPTANCE 1
MEANING AND ESSENTIALS OF OFFER

Ø  MEANING OF CONTRACT

•   A CONTRACT IS AN AGREEMENT ENFORCEABLE AT LAW.

•   AGREEMENT MEANS OFFER AND ACCEPTANCE

•   2(b) DEFINES PROPOSAL,”PROPOSAL OR OFFER BY ONE PARTY AND ITS ACCEPTANCE BY THE OTHER PARTY MAKING AN AGREEMENT.

Ø  MEANING OF OFFER

•   SEC 2( a) DEFINES “ WHEN ONE PERSON SIGNIFIES TO ANOTHER HIS WILLINGNESS TO DO OR TO ABSTAIN FROM DOING ANYTHING WITH A VIEW TO OBTAINING THE ASSENT OF THAT OTHER TO SUCH ACT OR ABSTINENCE.

•   SEC 2(a) REVEALS 3 ESSENTIAL ELEMENTS IN AN OFFER:

1.       EXPRESSION OF WILLINGNESS TO DO OR NOT TO DO SOMETHING

2.       MADE TO ANOTHER PERSON

3.       THE INTENTION TO GAINING THE CONSENT OF OTHER PERSON TO SUCH ACT OR ABSTINENCE.

•   THE PERSON MAKING THE OFFER IS CALLED THE PROPOSER OR OFFEROR

•   THE PERSON TO WHOM THE OFFER IS MADE IS CALLED THE OFFEREE

Ø  KINDS OF OFFER

•   HOW AN OFFER IS MADE :-

1.       EXPRESS OR IMPLIED OFFER : EXPRESS OFFER IS ONE WHICH IS MADE BY SPOKEN WORDS OR WRITTEN FORM AND IMPLIED OFFER WHICH IS GATHERED FROM THE CONDUCT OF THE PARTY OR THE CIRCUMSTANCES OF THE CASE

2.       TO WHOM AN OFFER IS MADE:-

a)       A PARTICULAR PERSON:-

b)       A PARTICULAR GROUP OR BODY OF PERSONS

c)        TO THE PUBLIC

WHEN AN OFFER IS MADE TO A DEFINITE PERSON IT IS CALLED SPECIFIC OFFER

WHEN AN OFFER IS MADE TO WORLD AT LARGE,IT IS CALLED GENERAL OFFER

•   EXAMPLE

•   CARLIL V CARBOLIC SMOKE BALL CO:-A COMPANY ADVERTISED IN MANY NEWSPAPER THAT A REWARE WILL BE GIVEN TO ANY PERSON WHO CONTRACTED INFLUENZA AFTER USING THE SMOKE BALLS ACCORDING TO PRINTED DIRECTIONS.

•   MRS CARLIL CARLIL USED THE SMOKE BALLS ACCORDING TO PRINTED DIRECTIONS BUT SHE CONTRACTED INFLUENZA. HELD IT WAS GENERAL OFFER AND BY USING THE SMOKE BALLS SHE HAD ACCEPTED THE OFFER.

•AN OFFER IS DIFERENT FROM

•                 AN OFFER IS DIFFERENT FROM :-

a)       INVITATION TO OFFER:-AN ADVERTISEMENT IN A NEWSPAPER,THE DISPLAY OF GOODS AT SHOP WINDOW

b)       A MERE COMMUNICATION OF INFORMATION IN COURSE OF NEGOTIATIONS

c)        A CASUAL INQUIRY

d)       A PROSPECTUS INVITING THE PUBLIC TO SUBSCRIBE TO THE SHARES OR DEBENTURES OF THE COMPANY

e)       A CATALOGUE OF GOODS FOR SALE

•   ESSENTIALS OF A VALID OFFER

1. OFFER MUST BE CAPABLE OF CREATING LEGAL RELATIONS. CASE BALFOUR V BALFOUR
2. OFFER MUST BE CERTAIN, DEFINITE AND NOT VAGUE:- CASE TAYLOR V. PORTINGTON: MR A AGREED TO TAKE THE B’S HOUSE ON RENT FOR 85 POUND PROVIDED THE HOUSE IS PROPERLY RENOVATED,REPAIRED AND DRAWING ROOM WERE DECORATED AS PER PRESENT STYLE. SO IT WAS VERY VAGUE.
3. OFFER MUST BE COMMUNICATED TO THE OFFEREE:- CASE LALMAN SHUKLA V GAURI DUTT LIKE IN THIS CASE D’S NEPHEW WAS MISSING,HE SENT HIS SERVANT P TO FIND HIM. D ANNOUNCED REWARD. HIS SERVANT FOUND THE NEPHEW AND DEMANDED REWARD.HIS CLAIM WAS REJECTED ON THE GROUND THAT HE WAS NOT AWARE OF THE OFFER.

4. AN OFFER MAY BE CONDITIONAL:-AN OFFER CAN BE MADE SUBJECT TO CONDITION. IT CAN BE ACCEPTED ONLY SUBJECT TO THAT CONDITION. THOMSON V L.M& RAILWAYS: A WAS UNEDUCATED PERSON. HE TOOK AN EXCURSION TICKET ON THE RAILWAY. ON THE TICKET IT WAS WRITTEN TO SEE THE CONDITIONS ON BACK.ONE OF THE CONDITION WAS THAT RAILWAY COMPANY WOULD NOT LIABLE FOR PERSONAL INJURY TO THE PASSENGER. A WAS INJURED AND HELD A COULD NOT RECOVER THE DAMAGES.
5. OFFER SHOULD NOT CONTAIN A TERM THE NON COMPLIANCE OF WHICH WOULD AMOUNT TO ACCEPTANCE: A MAKES AN OFFER TO B THAT HE WILL SELL HIS BIKE TO HIM FOR 30,000. AND SAID THAT IF I DO NOT RECEIVE THE REPLY NEXT MONDAY.I WILL ASSUME THAT YOU HAVE ACCEPTED THE OFFER.

6. LAPSE OF AN OFFER:- AN OFFER LAPSES
1. IF EITHER OFFEROR OR OFFEREE DIES BEFORE ACCEPTANCE
2. IF IT IS NOT ACCEPTED WITH IN SPECIFIED TIME OR A REASONABLE TIME PERIOD
7. AN INVITATION TO OFFER IS NOT AN OFFER: HERE THE AIM IS TO CIRCULATE THE INFORMATION. THE DISPLAY OF GOODS IN A SHOP WITH PRICE TAGS IS AN INVITATION TO OFFER.

6. STANDING OFFER:-WHERE GOODS AND SERVICES ARE REQUIRED OVER A CERTAIN PERIOD. FIRM MAY INVITE THE TENDERS AS A STANDING OFFER WHICH IS CONTINUING OFFER. THE ACCEPTANCE OF STANDING OFFER HAS THE EFFECT THAT AS WHEN THE GOODS OR SERVICES ARE REQUIRED AN ORDER IS PLACED WITH THE PERSON WHO SUBMITTED TENDER AND EACH TIME A DISTINCT CONTRACT IS MADE.

9. COUNTER OFFER :- REJECTION OF ORIGINAL OFFER AND MAKING A NEW OFFER . CASE HYDE V WRENCH: A OFFERED TO SELL A FARM FOR 1000 POUND. B SAID HE WILL PAY 950 POUND. A REJECTED AND B OFFERED 1000 POUND. A AGAIN REFUSED. HELD THERE WAS NO CONTRACT.
10. CROSS OFFER :- WHEN TWO PARTIES MAKE IDENTICAL OFFER TO EACH OTHER IN IGNORANCE OF EACH OTHER’ S OFFER.
11. A STATEMENT OF PRICE IS NOT AN OFFER:-HARVEY V FACEY
1. THREE TELEGRAMS WERE EXCHANGED BETWEEN HARVEY AND FACEY:
2. WILL YOU SELL YOUR BUMPER HALL PEN? TELEGRAPH LOWEST PRICE
3. FACEY TO HARVEY:-LOWEST PRICE 900 POUND
4. WE AGREE TO BUY BUMPER HALL PEN FOR 900 POUND FOR THE SUM ASKED BY YOU. HARVEY TO  FACEY.

e.       NO CONTRACT

Ø  SPECIAL TERMS IN CONTRACT

• WHERE ANY SPECIAL TERMS ARE TO BE INCLUDED IN A CONTRACT THEY MUST BE COMMUNICATED TO THE OFFEREE AT THE TIME OF WHEN THE OFFER IS MADE.
• OLLEY V MARLOBOUROGH COURT LIMITED: A HOTEL PUT A NOTICE IN A BED ROOM THAT OWNER IS NOT LIABLE FOR ANY LOSS OF THE CLIENT’S GOODS. HELD NOTICE WAS NOT EFFECTIVE BECAUSE IT WAS NOT COMMUNICATED TO THE CLIENT.