December 5, 2009
What is an “Offer” under Indian Contract Act?
Section 2 (a) of Indian Contract Act has the word ‘Proposal’ instead of ‘Offer’, which is widely in use worldwide. Not only the literal meaning of these two words are interchangeable, their effect and intent are also same.
Section 2 (a) of the Indian Contract Act, 1872 reads:
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, he is said to make a proposal.
Thus, we can summarise the elements of ‘Offer’ as follows:
Moreover, the willingness of the Promisor ‘to do or to abstain from doing some act’ has a purpose, which is, obtaining the assent of that other to such act or abstinence. Readers should note that if the purpose is not fulfilled, the definition of “Offer” or “Proposal” remains incomplete.
Question for Readers
Has anyone come across a real world example, where the above purpose is not fulfilled but the agreement is concluded?
What is an acceptance under the Indian Contract Act?
Section 2(b) of the Indian Contract Act, 1872 reads:
When the person to whom the proposal is made signifies his assent thereto, the proposal is said to be accepted. A proposal, when accepted, becomes a promise.
The elements of an acceptance can be summarised as follows:
Effect on Contract Drafting
Thus we can conclude safely that while drafting a contract, the offer and acceptance provides following information to the drafter:
I will advise the readers of this blog that these are my personal observation and need not be accurate, up to date, or complete. The above observations are not intended to be legal advice and are for the purpose of providing general information to the readers.
Sources: 1. Bare Act, Indian Contract Act, 1872.
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