Under Section 2(a) of the Indian Contract Act, 1872, a Proposal is defined as: "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."
1. Essentials of a Valid Offer
- Must be communicated: An offer is only effective when it is communicated to the offeree.
📜 Landmark Case: Lalman Shukla v. Gauri Dutt (1913)
A nephew went missing. A master sent his servant Lalman to search for him. After the servant left, the master advertised a reward of Rs. 501 for anyone who found the boy. Lalman found the boy without knowing about the reward, and later claimed it. The court held that there could be no acceptance of an offer without knowledge of that offer. The claim was dismissed. - Must create legal relations: Social invitations are not offers.
- Terms must be certain: If A offers to sell "some oil" without specifying the type or quantity, the offer is invalid due to uncertainty.
2. Offer vs. Invitation to Offer (Invitation to Treat)
An Invitation to Offer is not an offer, but an invitation to the public to make an offer.
- Display of goods in a shop window: Displaying goods with a price tag is a mere invitation. When a customer takes the goods to the counter, the customer is making the "offer" (Fisher v. Bell).
- Auctions and Tenders: Advertising an auction or inviting tenders are invitations. The bids made by participants represent the actual offers.
3. Kinds of Offers
- General Offer: Made to the world at large. Anyone who performs the conditions can accept it.
📜 Landmark Case: Carlill v. Carbolic Smoke Ball Co. (1893)
A company advertised that it would pay £100 to anyone who caught influenza after using their smoke ball as directed. They deposited £1000 in a bank to show sincerity. Mrs. Carlill used it and still got sick. The company argued they had no contract with her specifically. The court held that this was a General Offer to the public, and she accepted it by performing the specified conditions. - Specific Offer: Made to a specific person or group. Only they can accept it.
- Counter-Offer: An acceptance with modifications. It rejects the original offer (Hyde v. Wrench).