Law of Contracts: Offer, Acceptance, and Revocation

Vocabulary practice flashcards covering legal principles, definitions, case laws, essential elements, and methods of revocation related to offers and contracts under Indian Law.

Offer (Proposal)

According to Section 2(a) of the Indian Contract Act, a proposal is made when a person signifies to another their willingness to do or abstain from doing anything, with a view to obtaining the assent of that other to such act or abstinence.

Recognizance

A written acknowledgement to the king or authority to pay a debt, such as a tax amount or fine amount.

Contract

An agreement that is enforceable by law, represented by the formula: $\text{Offer} + \text{acceptance} + \text{enforceability} = \text{contract}$.

Express Offer

An offer made either orally (when parties are face to face) or in written form (such as by letter when parties are far away).

Implied Offer

An offer that is not expressed in oral or written words, but is understood through the actions, conduct of the parties, or surrounding circumstances (e.g., a bus standing at a bus stand).

General Offer

An offer made to the public at large, which can be accepted by any offeree who fulfills the required condition without needing to expressly communicate acceptance.

Carlill Vs Carbolic Smoke Ball Co.

A landmark court case establishing that in the case of a general offer made to the public, performing the conditions of the offer constitutes implied acceptance and creates a binding contract.

Specific Offer

An offer made specifically to a particular person or a specific group of persons, which can only be accepted by that specified person or group.

Counter Offer

An offer made by the offeree to the offeror in response to an original offer, introducing variations or modifications; it operates as a rejection of the original offer.

Cross Offer

Identical offers made simultaneously by two parties to each other without the knowledge of each other's offer, which does not result in a valid contract due to lack of mutual acceptance.

Standing Offer (Open Offer)

An offer that remains open for acceptance over a continuous period of time, allowing the offeree to give acceptance at any time within that period.

Balfour V Balfour

A case establishing that an offer must be capable of creating a legal relationship; agreements of a social or family nature do not create legal relations and are not maintainable in court.

Guthing V Lynn

A case illustrating that all terms of an offer must be clear, specific, and certain; a promise to pay extra money if a horse turned out to be "lucky" was held invalid for uncertainty.

Taylor V Portington

A case holding that an offer to lease a house on the condition that it be "beautifully decorated" was invalid because the terms were uncertain and not clearly defined.

Lalman Shukla V Gauri Dutt

A case establishing that an offer must be communicated to the offeree; a servant who returned a missing boy without knowledge of the reward offer could not claim the reward.

Harvey V Facey

A case ruling that responding to an inquiry regarding the lowest price of an item (Bumper Hall Pen) is merely an invitation to offer/information, not an offer to sell.

Felthouse V Bindley

A case ruling that an offer cannot contain a term stating that non-compliance or silence will be treated as acceptance.

Henderson V Stevenson

A case holding that conditions attached to an offer must be reasonable; uncommunicated conditions printed on the back of a ship ticket limiting liability were held invalid.

Raja of Bobbili V A. Surya Narayana

An auction case establishing that an auction is an invitation to offer, and a bidder's bid lapses if they die before the auctioneer accepts it by knocking down the hammer.

Invitation to Offer

An act intended to initiate negotiation or invite offers according to information provided (e.g., catalogue of goods, job applications, company prospectus, showcase displays), which is not an offer itself.

Communication of Offer

The act of conveying an offer to the offeree, which is legally completed when it enters the knowledge of the person to whom it is made.

Revocation of Offer

The taking back or withdrawal of an offer, which under Indian Law can be done at any time before the offeree gives acceptance or before it comes to the knowledge of the other person.

Revocation by Notice

Revoking an offer by sending notice through a faster method of communication than the original offer (e.g., revoking a letter offer by telegram).

Revocation by Death or Insanity

The revocation of an offer occurring when the offeror or offeree dies or becomes insane before the completion of the offer/promise.

Revocation by Non-fulfillment of Condition

The revocation of an offer that occurs when the offeree fails to fulfill any condition precedent placed upon the offer by the offeror.

Revocation by Failure to Accept in Prescribed Mode

Revocation that takes place when the offeror expressly specifies a method of acceptance (e.g., telegram) and the acceptor fails to follow that prescribed mode (e.g., accepting by letter).

Revocation by Lapse of Time

The withdrawal or termination of an offer when the offeree fails to give acceptance within the time limit expressly specified by the offeror.