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CON · S02Session 2 · 10–11 Oct · 9 min read

Offer and acceptance

A contract starts when one party signifies willingness and the other signifies assent. Most problems turn on two questions. Who made the offer? When was each step complete?

ICA ss. 2(a)–(h), 4, 8, 9Released week of 12 Oct
s. 2

1. From offer to contract

  1. One partyOffer · s. 2(a)
  2. The other says yesPromise · s. 2(b)
  3. + ConsiderationAgreement · s. 2(e)
  4. + Enforceable by lawContract · s. 2(h)

An offer and an acceptance make only a promise. A promise becomes a contract when it has consideration and the law can enforce it.

s. 2(a)

2. Offer

Rule

A person makes an offer when they signify to another person their willingness to do or not do something, to get that person's assent.

The ICA calls an offer a "proposal". An offer can be to act, to abstain, or both:

  • Act: "I will sell you 5 kg of tomatoes for ₹100."
  • Abstain: "Pay me ₹100, and I will not sell these 10 kg to anyone else for three days."

The willingness must be signified. An intention that you keep to yourself has no legal effect. Section 9 allows two ways:

ExpressImpliedHowIn words, spoken or writtenBy conduct, without wordsExample"Will you sell me 5 kg for ₹100?"A regular customer hands over ₹100 in silence, and the seller weighs out 5 kgEffectBindsBinds in the same way
s. 4

3. The offeree must know

Rule

Communication of an offer is complete when it comes to the knowledge of the offeree. You cannot accept an offer that you do not know about.

  1. Step 1Gauri Datt sends his servant, Lalman Shukla, to find a missing nephew.
  2. Step 2Gauri Datt announces a ₹501 reward for finding the boy.
  3. Step 3Lalman Shukla finds the boy. He does not know of the reward.
  4. Step 4He learns of the reward and claims it. The claim fails.
CaseLalman Shukla v Gauri Datt (1913, Allahabad HC)

Facts: Gauri Datt sent his servant, Lalman Shukla, to find a missing nephew. He then announced a reward of ₹501 for finding the boy. Lalman Shukla found the boy before he knew of the reward.

Held: Lalman Shukla could not claim the reward. He did not know of the offer when he acted, so he could not accept it.

s. 8

4. General offers

Anyone can accept a general offer by performing its conditions (s. 8). The offeror does not need a reply.

Specific offerGeneral, non-continuingGeneral, continuingMade toNamed peopleThe worldThe worldAccepted byA replyPerforming the conditionsPerforming the conditionsEnds whenAccepted, rejected or revokedOne person performsThe offeror revokes it by noticeExample"I will sell you my car for ₹2 lakh"Lalman Shukla: one nephew to findCarlill: every user who caught flu could claim
CaseCarlill v Carbolic Smoke Ball Co (1893, CA)

Facts: An advertisement promised £100 to anyone who used the smoke ball as directed and still caught influenza. Mrs Carlill did this and caught influenza. The company said it made no offer to her and she never wrote to accept.

Held: The advertisement was a general offer. Mrs Carlill accepted it when she performed its conditions. She did not need to notify the company.

Exam trap

Carlill and Lalman Shukla do not conflict. Both were general offers. Mrs Carlill knew of the offer when she acted. Lalman Shukla did not.

Harvey

5. Offer or invitation to offer

Ask

Does the statement show that the maker will be bound as soon as the other side says yes?

Yes
It is an offer. A "yes" makes a promise.
No
It is an invitation to offer. The reply is the offer, and the maker can accept or refuse it.

These are invitations to offer: a quoted lowest price, menus and catalogues, auctions and tenders (each bid is an offer), goods on display in a shop, and product listings online. A firm statement such as "I will sell this land for ₹1,000" is an offer.

CaseHarvey v Facey (1893, PC)

Facts: The buyer asked by telegram: "Will you sell Bumper Hall Pen? Telegraph lowest cash price." The owner replied: "Lowest price £900." The buyer replied: "We agree to buy for £900." The owner did not reply and did not sell.

Held: There was no contract. "Lowest price £900" only answered a question about price. The buyer's reply was the offer, and the owner never accepted it.

CasePharmaceutical Society v Boots (1953, CA)

Facts: Boots ran a self-service chemist. The law required a pharmacist to supervise the sale of some drugs. The Society said the sale was complete when a customer took a drug from the shelf.

Held: Goods on display are an invitation to offer. The customer makes the offer at the counter, and the pharmacist can accept or refuse it.

Continue on page 2Acceptance5 more sections: Acceptance, When acceptance is complete, Exam traps, Also came up in class, Coming next
Practice · Session 2

Test yourself on this session

3 of 5 adapted from past NLSIU exam papers, 2022–25
Question 1 of 5Invitation to offerA jacket in a shop window carries a tag: "₹2,000". R takes it to the counter and hands over ₹2,000. The owner says demand has gone up and the price is now ₹3,500. While they argue, another customer pays ₹3,500 and the owner sells her the jacket. Did the owner break a contract with R?
Answer all of them, then submit to see your score.5 questions · about 4 minStart MCQsAnswers and why after you submit. Your score is saved to Session 2.