RULES / CONDITION / ESSENTIALS OF VALID PORPOSAL / OFFER

by • 28/05/2012 • B.com part 2 Business LawComments (0)504

Q1. Describe Rules/Conditions or Essentials of valid proposal/offer.

 

RULES / CONDITION / ESSENTIALS OF VALID PORPOSAL / OFFER

 

Following are the conditions of valid proposal or offer.

 

  1. LEGAL RELATIONSHIP

An offer must intent to create legal relations, and offer must be such that when accepted, it will create legal relationship among the parties.

 

Example:

Ahmed invites Bilal to dinner and Bilal accepts this invitation. This is not a offer as it does not create legal relationship. So there is no agreement.

  1. CLEAR TERMS AND CONDITIONS

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 his car for Rs.100, 000 or 150,000. Here X’s offer is not certain because it is not clear which of the two prices was to be given by Y.

 

  1. GENERAL AND SPECIFIC OFFER

When proposal is opened to the general public it is called general proposal on the other hand when it is made to the specific person. It is called specific offer.

Example a:

“A” offers to sell his car to “B” for Rs. 500,000. it is a specific offer.

 

Example b:

“A” announces in a newspaper that he wants to sell his care to any one who wil pay him Rs. 500,000. It is general offer.

 

  1. MUST BE COMMUNICATED

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.

 

  1. ASSENT MUST BE AN OBJECT

Proposal without object will not be valid. The object of the proposal must be to get the assent of the other party to whom the offer has been made.

 

  1. DISTINCTION BETWEEN PROPOSAL AND INVITATION

Proposal is different that the invitation of tenders, price-list of goods and quotation. These are only invitation of an offer and not the proposal.

  1. METHOD OF COMMUNICATION

There are three methods of communication. Proposal can be made orally, in writing or by conduct. Generally proposals are made orally or in writing.

 

Example:

Ahmed wants to sell his car to Bilal but he does not inform him. It is not an offer.

 

  1. ACCEPTABLE PROPOSAL

If the acceptance of the proposal is not possible then it will be not a valid proposal. It is essential that acceptance must be possible.

 

Example:

Ali offers Rs. 50,000 to Baqir for breaking stars. It is not a valid proposal as its acceptance is not possible.

 

  1. COMMUNICATION OF SPECIAL TERMS

The special terms of the offer must also be communicated along with the offer. Is the special terms of that offer are not communicated; the offeree will not be bound by those terms.

Pin It

Leave a Reply