Coupon Accepted Successfully!


The offer must have its terms definite and clear

The terms of the offer must be certain, definite and clear. If the terms of the offer are not certain or definite, it is not a valid offer, as it is not clear as to what exactly the parties intend to do.



Ram offers to sell to Rahim his gold ring for ₹ 1, 00,000 or ₹ 1, 50,000. Here Ram’s offer is not certain because it is not clear as to which of the prices is to be paid by Rahim.



Note: According to Sec. 29, if the terms of the offer are capable of being made certain, the offer is not regarded as vague.




Amar who only deals in coconut oil offers to sell to Akbar (a regular customer) 100 tons of oil. Here, the offer cannot be said uncertain on the grounds that it is not clear what price is to be paid for the oil because if such an offer is accepted by Akbar, Akbar has to pay reasonable price or according to the custom of usage of trade.


The offer must be capable of creating a legal relationship

If the offer does not intend to give rise to legal relationship when accepted it is not a valid offer in the eyes of law. The offer must be such that when accepted it will result in a valid contract. A mere social invitation cannot be regarded as an offer because if such an invitation is accepted, will not result in a valid contract. It is generally contemplated in commercial dealings that the party making a offer is intending to create a legal relationship.



Amar invited Akbar to a dinner. Akbar accepted the invitation. This is a social agreement. If Amar fails to serve dinner to Akbar, Akbar cannot go to the court of law for enforcing the agreement. Similarly, if Akbar fails to attend the dinner, Amar cannot go to the court of law for enforcing the agreement.


The offer must be communicated to the other party

The offer is completed only when it has been communicated to the offeree. Until the offer is communicated it cannot be accepted. Thus, an offer accepted without its knowledge, does not confer any legal rights on the acceptor. This statement can be understood by a case law Lalman Shukla vs Gauri Datt.
Description: 24508.jpg

An offer must be distinguished from an invitation to offer

An invitation to offer is an action inviting other parties to make an offer to form a contract. In the case of an invitation to offer the person sending out the invitation does not make an offer but only invites the other party to make an offer. It is a prelude to an offer inviting negotiations or preliminary discussions. Thus such invitations for offers are therefore not offers in the eyes of law and do not become agreements by their acceptance.
Goods displayed in the shop with the price marked on them, an advertisement for sale of goods by auction, catalogues of prices are all examples of invitations to offer.
Description: 25322.jpg
Description: 24630.jpg


Invitation to offer Offer
The person sending out the invitation does not make an offer but only invites the other party to make an offer When one party (the offeror) makes a definite proposal to another party (the offeree)
It expresses initial intention It expresses final willingness
Example: Issue of prospectus by the company inviting applications Example: Application filled in by prospective applicants to the Company

Examples of invitation to offer

  • Catalogues, price lists and quotations
  • Circular inviting tenders or quotations
  • Railway time – table or guide
  • Bank’s catalogue of charge and interest or bank’s reply to an enquiry regarding the particulars of charges and interest
  • Prospectus of a company
  • Advertisement inviting applications for employment

An offer must be distinguished from a mere declaration of intention

A declaration by a person that he intends to do something, gives no legal right of action to another. Such a declaration only means that an offer will be made or invited in future and not that an offer is made now in the present.



Ram, a broker of Mumbai wrote to Rahim, a merchant of Mumbai stating the terms on which he is willing to do business. It was held that the letter was a mere statement of intention and not an offer.


A statement of price is not an offer

A mere statement of price or answer to a question cannot be construed as an offer. Generally parties negotiate and bargain before they enter into a contract and such a process includes conducting an enquiry. An answer made to such an enquiry is a part of negotiation and cannot be concluded as the final willingness of the parties.
Description: 24780.jpg


Note: The first telegram asked two questions. (i) the willingness of the party to sell and (ii) the lowest price, Facey replied only to the second question and gave his lowest price, i.e., he supplied mere information and such answer to a question does not amount to an offer to sell. There could be a contract only if he had accepted Harvey’s last telegram.

Offer should not contain a term, the non-compliance of which would amount to acceptance

While making the offer, the offeror cannot say that if the offer is not accepted before a certain date, it will be presumed to have been accepted. An offeror cannot impose the burden on the offeree to reply. Acceptance cannot be presumed merely by silence.



Amar writes a letter to Akbar stating, “I offer to sell my horse for ₹ 1, 00,000. If I do not receive your reply by the coming Friday, I shall assume that you have accepted the offer.” Akbar doesn’t reply. In this case, no contract will be created as the law does not permit a party to impose an unnecessary obligation on the acceptor if he does not want to accept the offer. Moreover, acceptance cannot be presumed from mere silence.


The offer may contain any number of conditions

The offeror is free to include any terms and conditions in his offer. The terms and conditions should be communicated to the offeree before or at the time of making the offer. Any terms and conditions made after the formation of contract, shall not be binding to the offeree.

Special terms of offer

No doubt, an offeror can attach any special terms and conditions to the offer he makes. But the special terms and conditions of the offer must be brought to the notice of the offeree before he accepts the offer. Further, the special terms and conditions of an offer must be stated in such a manner that the attention of the offeree is drawn to them.
Description: 24899.jpg
Description: 25018.jpg

Test Your Skills Now!
Take a Quiz now
Reviewer Name