Based on the basic contract law principle offer & Acceptance

Presentation on the basic contract law principles

1. LAW of Contracts - I

2. introduction

3. Contract is an agreement enforceable by law

4. Offer / Proposal English law - Offer Declaration of one’s will to do or not do something Section 2 (a)- " a person is said to make a proposal when he signifies to another his willingness to do or abstain from doing anything with a view to obtaining the assent of that other to such act or abstinence “

5. Proposal a person  Proposer signifies  communicates to another  possible acceptor his willingness to do  to do an act or abstain  to not do an act from doing anything  object of that conversation with a view to obtaining the assent  intention to create legal relations of that other  possible acceptor to such act or abstinence  object that is being discussed at the moment

6. PARTIES INVOLVED

7. Communication of OFFER Knowledge of Offer Offer cannot take effect till the other party has been made aware of the same Offer is complete upon communication Therefore, acceptance can take place only once offer has been communicated

8. FEATURES OF OFFER Communication Car advertisements Display in the showroom Intention To Create Legal Obligation Car Dealer Displaying A Model Of A Car In The Showroom? Certainty and Transparency of the offer (common understanding) Buying the car after inspecting it and understanding the T&Cs Promise to do or not do something Promising a festival discount if bought within the festival season Promising to not confiscate the car if the loan is paid within agreed time.

9. RULES of OFFER Invitation to offer is not offer Simply expressing interest & compliance of the conditions = contract ? Identical offers do not make an offer Is there any acceptance ? Special terms must be notified Role of the fine print Communication by offeror? Can offeree claim ignorance ?

10. Kinds EXPRESS & IMPLIED GENERAL & SPECIFIC ADVERTISEMENT INVITATION TO TREAT

11. Offer Company Z placed an advertisement stating that its new product if used three times a day for 2 weeks, would prevent cold & influenza. If anyone caught cold even after consuming the product, they could claim for 100/- The Company also deposited an amount of 1000/- with the bank to hold their commitment to the statement made Did Company Z make an offer? And if yes, then what kind of offer?

12. Offer Was it a simple advertisement? Court held – It was a true offer since they deposited money  offer was seriously intended i.e., intention to create legal obligations Therefore, acceptance of the offer to make use of the product and claim for ‘reward’ became a promise Additionally, performance of the condition = Acceptance

13. offer

14. Essentials of a Valid offer Offer must be made with an intention to create legal relations It must be something capable of being accepted The terms of the offer must be definite, unambiguous and certain Offer must be expressly communicated for the other party to know and accept Offer cannot be such that non-compliance of the statement / terms of offer would amount to acceptance

15. Acceptance Willingness shown by a possible acceptor Willingness to be bound by the terms & conditions of the Offeror Who can Accept? A person to whom the proposal was made

16. Features of ACCEPTANCE Absolute & unqualified Mirror image Intention to create relation Who can accept? anyone? Must be communicated X clearly tells Y that he wants to buy Y’s flat X, a shopkeeper, regularly delivers groceries to its customers

17. Features of ACCEPTANCE How to Accept ? Requirement of any mode ? Conduct ? Silence = Offer ? When to accept? Before an offer is made ? After a specified period has ended ? Can there be acceptance in ignorance of offer? Can a rejected offer be accepted ?

18. Acceptance 3 telegrams were exchanged between H & F: H- Will you sell us Bumper Hall Pen? Share the lowest price F – Lowest Price - Rs100 H – We agree to buy the pen for Rs 100 as asked by you. F did not sell the pens and H brought an action against F.

19. WHAT MAKES A CONTRACT? PROMISE OFFER ACCEPTANCE

20. Communication

21. Communication When the opposite party becomes aware = Completion Specific Offer Offeree (possible acceptor) General Offer - anyone Mode of Communication Written / verbal -letter, email, in-person Conduct (Action) – boarding a bus

22. Communication Timing when Offer is complete X offered to stitch 10 jackets for Y via a letter The letter was posted on 1 st Feb 2023. The letter reached Y on 3rd So the communication of offer is said to be complete on _________?. Timing when Acceptance is complete Y accepts the offer of X via a letter. He posts the letter on 4 th Feb and the letter reaches X on 6 th Feb For X (the proposer) the communication of the acceptance is completed on 4 th Feb. For Y (the acceptor) the communication will be complete on 6 th Feb (X learns of the acceptance.)

23. Communication

24. Communication Revocation of Offer Y accepts the offer of X via a letter. He posts the letter on 4 th Feb. But for X the acceptance was complete on 4 th Feb itself. So, the revocation of offer can only happen before the 4 th Feb . Revocation of Acceptance X receives the letter on 6 th Feb = communication for acceptance complete. So, Y can decide to revoke only between 4 th Feb and 6 th Feb

25. Communication - recap 1. A proposes , by letter, to sell a house to B  communication of proposal complete when B received the letter ( Knowledge of the proposal ) 2. B accepts A’s proposal by a letter  Communication of acceptance is complete  For A, when the acceptance letter is posted  Proposer is bound when letter of acceptance is posted (proposer is deemed to have received the acceptance)  posting the acceptance merely barred the possibility of the offeror withdrawing the offer. For B, when the letter is received by A Acceptor is bound only when the acceptance letter comes to the knowledge of the Proposer Delays or non delivery of acceptance letter cannot unbind parties  Posting the acceptance establishes meeting of minds , and a contract should come into effect with that act .

26. Communication - recap 3. A revokes his proposal by a telegram  communication of revocation complete for A when, when telegram is despatched For B when, telegram is received  The gap of time between receipt of the proposal & posting of acceptance can be utilised B revokes his acceptance by telegram  communication of revocation complete  For B when, telegram is despatched For A when, telegram is received  The gap of time between posting the acceptance & receipt / delivery of acceptance can be utilised  Reason = posting the acceptance does not mean that the contract is complete; receipt is necessary

27. Communication - recap Communication on phone or telex Immediate communication Would be treated as if a verbal offer & acceptance is made. However, the acceptor should make sure that the acceptance was audible, heard & understood by the offeror Communication via email / fax Fax – message transmitted – instant communication Moreover, sender gets informed in case the message is not received Email – also an instant communication However, in cases where the acceptance email was (1) wholly or partly distorted, (2) did not reach the offeree & sender was unable to know about this failure  postal rule will apply (when acceptance was put in transmission)

28. Communication - recap Time and Place of: Proposal being made  the place where it was received Formation of contract: Postal  time & place of posting has been held to be Instant communication  time & place of completion of contract i.e., time and place where acceptance is received.

29. Revocation Modes of revocation- By way of notice Lapse of time for acceptance Failure to fulfil a condition required to accept Death or insanity of the proposer

30. consideration

31. CLASSICAL ELEMENTS OF A CONTRACT OFFER ACCEPTANCE CONSIDERATION

32. Consideration According to Section 2(d) of the Indian Contract Act, 1872, consideration is defined as follows: “ When at the desire of the promisor, the promisee or any other person has done or abstained from doing , or does or abstains from doing , or promises to do or abstain from doing something, such act or abstinence is called a consideration for the promisee . ” At the desire of the promisor if the promisee either - Does something (in the past, present or future) OR Abstains from doing something (in the past, present or future)

33. Consideration Doing something X and Y enter into a contract where X promises to deliver 15 jackets to Y in one month’s time. Y promises to pay X an amount of Rs 5,000 on delivery.  Y’s promise to pay Rs 5,000, on delivery, is the consideration for X’s promise.  X’s promise of delivering 15 jackets is the consideration of Y’s promise to pay.

34. Consideration Not doing something A has taken a loan from B. A has not repaid the loan yet. B promises not to file a suit against A if he promises to repay the loan within a week.  A bstinence on the part of B is due to the consideration of A’s promise of repayment of the loan.