PROPOSAL/OFFER – When one person signifies to another his willingness to do, to abstain from doing anything, with a view of obtaining the assent of that other to such act or abstinence, he is said to make a proposal.

For example :- A’s willingness to sell his radio set to B for Rs. 500 if B accepts to purchase the same, amounts to proposal by A for the sale of the radio set.

If a statement is made without any intention to obtain the assent of the other party, it
Cannot be termed as proposal. Generally the offer should be made with an intention to create legal relationship.

Promise in the case of social engagements is generally without an intention to create legal relationship.


OFFER: When one person expresses his will to another person to do or not to do something, to take his approval is known as an offer. An offer must be definite, certain and complete in all respects. It must be communicated to the party to whom it is made.

EXAMPLE:- A tells to B, “I want to sell my motorcycle to you at Rs. 30,000, will you purchase it?”

X says to y, “I want to purchase your car for Rs. 2,00,000 will you sell it to me?


It is an act prior to an offer, in which one person induces another person to make an offer to him. The invitation to offer is made to inform the public the terms and conditions and also in which a person is interested to enter into a contract with the other party.

Example Menu card of a restaurant showing the prices of food items. A company invites applications from public to subscribe for its shares.

In a leading case, company A advertised a sale by action. B travelled to the advertised place of action and found that the defendant had cancelled the action sale. He bought an action against the defendant to recover the expenses of his travel. It was held that he was not entitled for the same as there was yet no contract between the parties. Express and Implied Offer:

An express offer Is expressed by words written or spoken. An implied offer is an offer made otherwise than in words. It may be made by conduct.

Example: A person who boards a bus or who hires a taxi, undertakes to pay the fare at his destination, even though he makes no express promise to do so. PROMISE

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 person making the proposal is called the promiser and the person accepting the proposal is called the promisee.


When the offers made by two persons to each other containing similar terms of bargain cross each other in post, they are known as cross offers.

Example:- A offered to sell his watch to B for Rs. 2000 through a letter sent by post. On

The same date B also wrote to A making an offer to purchase A’s watch for Rs. 2000.
When A or B sent their letters they did not know about the offer which was being made by the other side. In these cross offers, even though both the parties intended the same bargain, there would arise no contract. A contract could arise only if either A or B after having the knowledge of the offer, had accepted the same.


When the offer is made to a specific or an ascertained person it is known as a specific offer but when the same is not made to any particular person but to the public at large, it is known as general offer.

Example: An offer to give reward to anybody who finds a lost dog is general offer.


An offer which is allowed to remain open for acceptance over a period of time is known as a standing, open or a continuing offer.

Example :- An offer to supply 1,000 bags of wheat from 1st January to 31st December, in accordance with the orders which may be placed from time to time is a standing offer. As and when the orders are placed that amounts to acceptance of the offer to that extent. In the above stated illustration if an order for the supply of 100 bags of wheat is placed on 15th January, there is acceptance of the offer to that extent. So far as the remaining quantity is concerned, this offer can be revoked just like any other offer.


The communication of a proposal is complete when it comes to the knowledge of the person to whom it is made. Hence, as offer cannot be accepted unless and until it has been brought to the knowledge of the person to whom it is made.

Example: – Mr. X makes an offer that whoever finds his lost dog, will get Rs, 10,000 from him; through a newspaper advertisement. If Mr. Y reads the advertisement and finds his lost dog, he is entitled to get the said amount. But suppose Mr. Y did not read the advertisement, he found the dog moving astray on the road and submitted it to the police. Or suppose, Mr.

Y happens to be the neighbor of Mr. X and he finds the dog during his morning walk and takes it to the owner, he will not be entitled to the reward amount. In this scenario, Mr. Y has come to know of the reward of 10,000 after the dog has been found. In both the situations Mr. Y will not be entitled to claim the amount from X because there was no communication of the offer to Mr. Y. Hence there cannot be a valid acceptance of the

Offer and hence no contract is formed.

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