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CA-Foundation > Business Laws > The Indian Contract Act, 1872 - Offer and Acceptance (Old & New)

What are the different types of offers? Explain.



Ans.
Kinds of Offer
Express or implied Offer: When the offer is made in words, it is said to be express. An implied offer is one which is inferred from the act or conduct of the party or from the circumstances of the case. Sec. 9 states. “Insofar as the proposal or acceptance of any promise is made in words the promise is said to be express. Insofar as such proposal or acceptance is made otherwise than in words, the promise is said to be implied”.
Specific or general Offer: When an offer is made to a specific person or a group of specific persons (for example an offer to doctors), is called a specific offer. When the offer is addressed to public at large, it is called a general offer. A specific offer can be accepted by the specific person only, while a general offer can be accepted by any member of the general public.
Standing offer: A standing offer is a continuous offer. It consists of an offer to supply goods as and when required during a certain period for a certain price. It usually takes the form of a tender. It creates a contract only when an order of specified quantity is given to the tenderer. Thus each order placed creates a separate contract. A Ltd., gives a standing offer to supply cement to Public Works Department (PWD) at ₹ 130 per cement bag for the period of one year with a minimum quantity of 1 lakh bags. This is a standing offer. PWD can place order any time during the year and purchase cement for ₹ 130 per bag but they will have to buy minimum 1 lakh bags of cement.
Cross Offer: When two persons make an offer to each other on similar terms, without having the knowledge of the offer being made by the other side, it is known as cross offer. Such cross offer does not amount to acceptance of one's offer by the other and therefore does not constitute a contract.
Counter Offer: It is necessary that the acceptance must match the offer. It must be a mirror image of the offer. If any alteration is made, or anything added, then this will be a counter offer, and will terminate the offer. A counter offer is an implied rejection of original offer. [Union of India v. Bahulal AIR 1968 Bombay 294]
Standard form of contracts: In the modern times due to ever-increasing growth in trade & commerce, contracts are concluded in standardized forms. Organisation like LIC, GIC, Railways enter into thousands of contracts every day. It is not possible for them to draft separate contracts with every individual. They issue printed forms of contract, which contains a large number of terms and conditions in “fine print” which restrict and often exclude liability under the contract. The individual is bound to sign them whether he likes the terms or not. They are for him to take or leave, he cannot alter those terms or even discuss them. Previously the offerees of such printed forms were helpless against such giant organisations which availed the opportunity to exploit the weak individuals by imposing onerous terms upon them. However in the recent times, in order to protect the oppressed individuals the courts have evolved various modes of protection. In fact in England. The (English) Unfair Contract Terms Act, 1977 was enacted to protect the individuals from unreasonable terms in the printed contracts.

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Notes of The Indian Contract Act, 1872 - Offer and Acceptance (Old & New)



  1. What are the different types of offers? Explain.
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  2. Aadarsh Dayal started 'self service’ system in his shop. Smt. Pavan entered in the shop, took a basket and after taking articles of her choice into the basket reached the cashier for payments. The cashier refuses to accept the price. Can Aadarsh Dayal be compelled to sell the said articles to Smt. Pavan? Decide.
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  3. State the points of distinction between Offer and Invitation to offer.
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  4. "Snow White" Soap Co. advertised that it would give a reward of ₹ 1,000 who developed skin disease after using, "Snow White" soap of the company for a certain period according to the printed directions. Miss Ruhi purchased the advertised "Snow White" and developed skin disease in spite of using this soap according to the printed instructions. She claimed reward of ₹ 1,000. The company refused the reward on the ground that offer was not made to her and that in any case she had not communicated her acceptance of the offer. Decide whether Miss Ruhi can claim the reward or not. Refer the relevant case law, if any.
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  5. Daamodar proposed to sell his house to Kaashinaath . Kaashinaath sent his acceptance by post. Next day, Kaashinaath sends a telegram withdrawing his acceptance. Examine the validity of the acceptance in the light of the following:
    1) The telegram of revocation of acceptance was received by Daamodar before the letter of acceptance.
    2) The telegram of revocation and letter of acceptance both reached together.

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