The Indian Contract Act, 1872 defines the term “Contract” under its section 2 (h) as “An agreement enforceable by law”. In other words, we can say that a contract is anything that is an agreement and enforceable by the law of the land. In section 2 (e), the Act defines the term agreement as “every promise and every set of promises, forming the consideration for each other”. OFFER/PROPOSAL • The entire process of entering into a contract begins with the proposal or an offer made by one party to another. The proposal must be accepted to agree. • According to the Indian Contract Act 1872, the proposal is defined in Section 2(a) as “when one person will signify to another person his willingness to do or not do something (abstain) to obtain the assent of such person to such an act or abstinence, he is said to make a proposal or an offer.” The element of a valid offer 1. There must be two parties 2. The proposal must be communicated 3. It must create legal relations 4. It must be certain and definite 5. It may be specific or general Types of offer - Express and Implied Offer Section 9 of The ICA defines both of them as In so far as the proposal or acceptance of any promise is made in words, the promise is said to be expressed. In so far as such a proposal or acceptance is made otherwise than in words, the promise is said to be implied. - General offer A General Offer is an offer that is made to the world at large. The genesis of a General Offer came about from the Landmark case of Carlill v. Carbolic Smoke Ball Co. - Specific offer A Specific offer is an offer that is made to a specific or ascertained person, this type of offer can only be accepted by the person to whom it is made. This concept was seen briefly in the case of Boulton v. Jones. - Cross offer When two parties make an identical offer to each other, in ignorance of each other’s offer, they are said to make cross offers. Cross offers are not valid offers. - Counteroffer When the offeree offers a qualified acceptance of the offer subject to modifications and variations in terms of the original offer, he is said to have made a counteroffer. A counteroffer is a rejection of the original offer. - Standing offer An Offer that remains open for acceptance over some time is called a standing offer. Tenders that are invited for the supply of goods is a kind of Standing Offer. Revocation of the offer (Section 4) A proposal can be revoked at any time before the communication of its acceptance is complete as against the proposer but not afterwards. Acceptance [Section 2(b)] The Indian Contract Act 1872 defines acceptance in Section 2 (b) as “When the person to whom the proposal is made signifies his assent thereto, the offer is said to be accepted. Thus the proposal when accepted becomes a promise.” An offer can be revoked before it is accepted.
