Offer And Its Types Under Indian Contract Act, 1872
Offer and Its Types Under Indian Contract Act, 1872
What is an Offer?
An Offer (also called a proposal) is the first step in forming a contract.
According to Section 2(a) of the Indian Contract Act, 1872,
“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.”
In simple terms, an offer is a clear and definite proposal made by one party (offeror) to another (offeree) to enter into a contract on certain terms.
The offer must express the willingness to be bound immediately on acceptance.
Essential Features of an Offer
Definiteness: The terms must be clear and certain.
Communication: The offer must be communicated to the offeree.
Intention: The offeror must intend to create legal relations.
Seriousness: It must be a serious proposal, not an invitation to negotiate.
Capacity: The offeror must be competent to contract.
Types of Offers
Offers can be classified based on different criteria:
| Type | Description | Example |
|---|---|---|
| 1. Express Offer | Offer is made either in writing or verbally. | A says to B, "I will sell you my car for ₹50,000." |
| 2. Implied Offer | Offer inferred from conduct, circumstances, or actions, not explicitly stated. | Buying vegetables from a shop implies an offer to pay the price. |
| 3. General Offer | Offer made to the public or to any person who performs the conditions specified. | Reward for finding a lost dog announced publicly. |
| 4. Specific Offer | Offer made to a specific person or group of persons. | A offers to sell goods to B only. |
| 5. Cross Offer | Two parties make identical offers to each other without knowledge of the other’s offer. | A offers to sell to B; B offers to buy from A without knowing A’s offer. |
| 6. Standing Offer | Offer remains open for acceptance for a specified time or until revoked. | Supplier offers to supply goods to a buyer at a fixed rate for one year. |
| 7. Counter Offer | An offer made by the offeree that varies or changes the terms of the original offer. | A offers to sell for ₹50,000; B replies, “Will you sell for ₹45,000?” |
| 8. Conditional Offer | Offer made subject to certain conditions being fulfilled. | Offer to sell a house if the buyer gets a loan sanction. |
Important Notes:
Invitation to Offer (Invitation to Treat):
It is NOT an offer but an invitation to make an offer. For example, advertisements, catalogs, price lists are generally invitations to offer.
Revocation of Offer:
An offer can be withdrawn any time before acceptance is communicated to the offeror.
Summary Table
| Type of Offer | Meaning | Key Characteristic | Example |
|---|---|---|---|
| Express Offer | Clearly stated verbally or in writing | Explicit terms | “I will sell my bike for ₹30,000.” |
| Implied Offer | Inferred from conduct | No direct words | Ordering food in a restaurant |
| General Offer | Made to the public | Anyone fulfilling conditions can accept | Reward for lost pet |
| Specific Offer | Made to a particular person | Only specified person can accept | Offer to sell goods to a particular buyer |
| Cross Offer | Identical offers exchanged unknowingly | No acceptance yet | Both parties send the same offer to each other |
| Standing Offer | Open for a period or until revoked | Continuous offer | Supplier’s ongoing price offer for a year |
| Counter Offer | Variation or rejection of original offer | Original offer rejected or modified | Negotiating price in a sale |
| Conditional Offer | Subject to conditions | Acceptance only on conditions fulfilled | Offer to sell if buyer gets financing |
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