- RULES FOR A VALID OFFER
An offer to be valid must fulfil the conditions discussed below.
1. Intention to Create Legal Relationship An offer must intend to create legal relations, An offer must be such that when accepted, it will create legal relationship among the parties
2. Certain and Unambiguous Terms The terms of the offer must be certain and unambiguous and not vague. If the terms of the offer are vague, no contract can be entered into because it is not clear as to what exactly the parties intended to do.
Example X offers to sell to Y “a 100 tons of oil.” If X is a dealer in coconut oil and mustard oil, his offer is not certain because it is not clear that he wants to sell coconut oil nr mustard oil. Bar if X is a dealer it? Coconut oil only, it is clear that he wants to sell coconut oil. Hence, the offer is certain.
3. Different from a Mere Declaration of Intention The offer must be distinguished from a mere declaration of intention. Such statement or declaration merely indicates that an offer will be made or invited in future.
Example A father wrote to his would be son-in-law that his daughter would have a share of what he left after the death of his wife. It was held that the letter was a mere statement of intention and not an offer. [Farine v. Ficker]
4. Different from an Invitation to Offer An offer must be distinguished from an invitation to offer. In case of an invitation to offer, the person making an invitation invites others to make an offer to him. It is prelude to an offer inviting negotiations or preliminary discussions.
Example Goods were displayed in the shop for sale with price tags attached on each article and self service system was there. One customer selected the goods.
It was held that the display of goods was only an intention to offer and the selection of the goods was an offer by the customer to buy and the contract was made when the cashier accepted the offer to buy and received the price. [Pharmaceutical Society of Great Britain v. Boots Cash Chemists Ltd.]
5. Communication An offer must be communicated to the person to whom it is made. An offer is complete only when it is communicated to the offeree. One can accept the offer only when he knows about it. Thus, an offer accepted without its knowledge does not confer any legal rights on the acceptor.
Example G sent his servant L to trace his lost nephew. When the servant had left, G announced a reward of Rs 500 to anyone who traces the missing boy. L found the boy and brought him home. When L carne to know about reward, he filed a suit against G to recover the reward. It was held that L was not entitled the reward because he did not know about the reward when he found the missing boy. (Lalman Shukla v. Gauri Dutt]
6. Non-compliance of offer doesn’t Amounts to Acceptance The offer must not contain a term the non-compliance of which would amount to acceptance. It means that while making the offer, the offerer can not say that if offer is not accepted before a certain date, it will be presumed to have been accepted.
Example X writes a letter to Y. I offer to sell my car for Rs 1,00,000. If I do not receive your reply by Friday next, I shall assume that you ha~ e accepted the offer. Here if Y does not reply, it does not mean that he has accepted the offer.
Example X purchased a steamer ticket for travelling from Dablin to White Haven and on the back of the ticket, certain conditions were printed one of which excluded the liability of the company for loss, injury or delay to the passengers or his luggage. X never looked at the back of the ticket and there was nothing to draw his attention to the conditions printed on the back side. His luggage was lost due to the negligence or the servants of the shipping company. It was held that X was entitled claim compensation for the loss of his luggage in spite of the exemption clause because there was no indication on the face of the ticket to draw his attention to the special terms printed on the back of the ticket. [Handerson v. Stevenson]
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