Offer and acceptance are the starting points of contract formation under the Indian Contract Act. A contract is created when a lawful offer is made and the other party gives a lawful acceptance. Many exam problems test rules of offer/acceptance, communication, revocation and whether a situation is an offer or only an invitation to offer.
An offer (proposal) is an expression of willingness by one person (offeror) to do or not to do something, with a view to obtaining the assent of another person (offeree).
Invitation to offer is an invitation to make an offer; it is not an offer itself.
Examples (common): price lists, advertisements (generally), display of goods in shop, auction notice.
Offer: placing order, bidding at auction, proposal with clear intention to be bound.
Acceptance is the expression of assent to an offer by the offeree. When acceptance is given, the offer becomes a promise.
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Rules of valid acceptance (any three):
Essentials of a valid offer (any three):
Business law encompasses all of the laws that dictate how to form and run a business. This includes all of the laws that govern how to start, buy, manage and close or sell any type of business. Business laws establish the rules that all businesses should follow.
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Offer and acceptance are the starting points of contract formation under the Indian Contract Act. A contract is created when a lawful offer is made and the other party gives a lawful acceptance. Many exam problems test rules of offer/acceptance, communication, revocation and whether a situation is an offer or only an invitation to offer.
An offer (proposal) is an expression of willingness by one person (offeror) to do or not to do something, with a view to obtaining the assent of another person (offeree).
Invitation to offer is an invitation to make an offer; it is not an offer itself.
Examples (common): price lists, advertisements (generally), display of goods in shop, auction notice.
Offer: placing order, bidding at auction, proposal with clear intention to be bound.
Acceptance is the expression of assent to an offer by the offeree. When acceptance is given, the offer becomes a promise.
Communication can be through words (letter, phone, email) or conduct. For exam answers, remember: communication matters; an uncommunicated offer or uncommunicated acceptance usually does not create a contract.
At concept level:
Revocation means withdrawal.
Offer lapses when:
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Offer (proposal) is an expression of willingness by one person to do or not to do something with a view to obtaining the assent of another person. Offer is the first step in forming a contract.
Essentials of a valid offer:
Thus, only a lawful and clear offer communicated to the offeree can be accepted to form a contract.