ESSENTIAL ELEMENTS OF A VALID OFFER
When two or more persons want to make an agreement, then two essential elements are necessary to be fulfilled to make it a valid agreement. They are offer and acceptance. This article speaks about the offer. One person communicating his willingness to do or not do an act, hoping for the other person’s approval or acceptance is called an offer/proposal which is defined under Section 2(a) of the Indian Contract Act, 1872. A proposal when gets accepted, it will become a promise as defined under Section 2(h) of the Indian Contract Act, 1872.
There are certain essentials elements of a valid offer. They are:
Offer must be of creating legal relations
An offer must be made with the intention to create a legal relationship, which creates legal rights and obligations which help to sue the other party who is not fulfilling the obligations mentioned in the agreement.
Generally, many foreign judgments were cited in contract law due to their persuasive value.
For ex:
A and B agreed to marry each other. Girl’s father wrote a letter to boy saying that he may give a part of his property to his daughter. Not basing on this statement they agreed to marry each other. Father-in-Law passed away after few months. Based on the letter, son-in-law claimed the property. The son-in-law cannot claim the property as it was not a promise.
Mr. & Mrs. Balfour were residents of London. Mr. Balfour got job as Geology Professor in Ceylon, Sri Lanka. During vacation they went back to London. Then Mrs. Balfour fell ill. When diagnosed, they were informed that she was suffering from rheumatic arthritis. Doctors advised her not to move to Sri Lanka; due to climate changes her illness may increase. Mr. Balfour before leaving London promised her to send 30 pounds as maintenance. He sent the agreed amount only for 2 months. Later, Mrs. Balfour asked Mr. Balfour to leave the job, but Mr. Balfour denied and they agreed to divorce. She demanded 13000 pounds every year. She also demanded money from her husband which he failed to give her before divorce. Court held that he was not liable to pay those 30 pounds. But if she wants maintenance she can file another case. Because the parties, in the inception of the arrangement, never intended that they should be sued upon. Agreements such as these are outside the realm of contracts altogether since the offer was not intended to create a legal relation; it was merely a domestic arrangement and a friendly agreement between wife and husband.
An agreement was made between mother & daughter. A divorcee was us to live with her daughter in London. The mother of the daughter asked her to leave the job and promised to pay the maintenance and asked her to study BAR. She resigned her job in Indian Embassy. But the amount paid by the mother was insufficient to the daughter and this situation was observed by the mother. So, the mother gave her a house in which she lived in one part and collected rent from the other part of the house. Later, she married a person which her mother dislikes. Even though she joined BAR before 5 years, daughter could not clear it. By seeing that, the frustrated mother acted her to leave the house along with her husband. Later, the daughter filed a case against the mother. Since the mother has not given the house for her daughter's entire family, the mother has a valid reason to her daughter to vacate her house. The mother asked her to complete BAR and the term of 3 years completed, even 5 years completed, even though she didn't completed her course and the term in mother's intention exceeded so the daughter can't get claims over the house.
The terms of an offer must be certain or capable of being made certain.
According to Section 29 of the Indian Contracts Act, 1872 the agreements meaning of which is not certain or capable of being made certain are void.
For ex:
A tenant made an agreement with the owner of a house, stating that the house should be in present style. Later tenant rejected the house, stating that he didn’t like it. Owner filed a case against the tenant. Court held that there is no certainty in the offer of the contract and it is void.
A contract was made between two parties stating that if your horse proves lucky, I will pay extra 5 pounds to this horse, or else I will buy another horse from you if I failed to pay the amount. The horse won the race. So, the owner of the horse filed a case against buyer as he rejected to pay extra 5 pounds or buy the new horse. Court held that as we can't define luck, it is an illusionary promise and as the contract is uncertain it was made void.
R&F Co. were the American distributors for Crompton’s new paper product. In their agreement there was a clause included stating that the agreement was not intended to be a formal legal agreement and was not intended to Legal Jurisdiction of either US or UK. Crompton cancelled the agreement. R&F Co. sued for breach. In contracts, the intention of the parties matter. Here, they clearly stated that they didn't intend be bound. So, there is no legally enforceable contract. The Court held that the fact that the arrangement does not constitute a legal contract does not preclude the orders and acceptances from constituting legally-binding contracts. So, the orders and responses between the parties in the process of business constituted enforceable contracts of sale.
Offer must be communicated to the offeree.
Section 4 of Indian Contracts Act, 1872 state that, “the communication of a proposal is complete when it comes to the knowledge of the person”.
An offer must be of specific or general. An offer need not be made to an ascertained person, but no contract has can arise until it been accepted by an ascertained person.
Gauri Datt had a nephew. When they had an altercation, her nephew ran away from the home. She ordered her servant, Lalman Shukla to search for him. Later she gave an advertisement stating a reward of Rs. 500 who finds him. Servant found the boy and bought back him to home. When the servant come to know about the advertisement and asked for reward, she refused. Lalman Shukla filed a case against Gauri Datt seeking reward. Court held that since communication of offer was not made to the servant before the nephew was found, Gauri Datt was not liable to give him any reward.
If any capable person marries my daughter, I will give 100 pounds to him. When a person proposed her and married and later went to ask for 100 pounds, the Father-in-law rejected and the son-in-law filed a case. At that time, the concept of general offer was not there. So, the Court held that contract should be made to a specific person and father in law is not liable. Later, the condition changed in 1615, and the concept of general offer introduced.
These are some of the essential elements of a valid offer.
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