Offer under Indian Contract Act: Understanding the Basics
In the Indian Contract Act, 1872, an offer is the first stage in the process of forming a valid contract. An offer is essentially a proposal made by one party to another, expressing an intention to enter into a legally binding agreement. In this article, we will discuss the basic concepts of offer under the Indian Contract Act.
Definition of Offer
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.” This proposal is called an offer.
Essential Elements of Offer
For an offer to be valid, it must contain certain essential elements. These are:
1. Intention: The offeror must have a clear intention to enter into a legally binding contract.
2. Communication: The offer must be communicated to the offeree. It can be communicated orally, in writing, or through conduct.
3. Definite and certain terms: The offer must be definite and certain in terms of the subject matter, quantity, price, and time of performance.
4. Not invitation to offer: The offer must not be a mere invitation to offer. An invitation to offer is an invitation to enter into negotiations and is not a binding offer.
5. Made with the intention of creating legal relations: The offer must be made with the intention of creating legal relations. For example, an offer made in jest or social conversation will not be considered a valid offer.
Revocation of Offer
An offer can be revoked at any time before its acceptance. However, it must be communicated to the offeree before the acceptance. The revocation of an offer can be express or implied.
Acceptance of Offer
An offer becomes a contract when it is accepted by the offeree. Acceptance must be unconditional and according to the terms of the offer. It must also be communicated to the offeror.
An offer is the first step in the process of forming a contract under the Indian Contract Act. It must contain certain essential elements and be made with the intention of creating legal relations. A valid offer can be revoked before its acceptance, and acceptance must be unconditional and communicated to the offeror. Understanding the basics of offer is essential for anyone entering into a contract in India.