I. MEANING OF OFFER OR PROPOSAL UNDER INDIAN CONTRACT ACT, 1872

Under Indian Contract Act, 1872 the term ‘Offer’ and ‘Proposal’ is used interchangeably. An offer and its acceptance is the universally acknowledged process for the making of an Agreement.

“Agreement” is defined in section 2 (e) of Indian contract act,1872 as “every promise and every set of promises forming the consideration for each other”. And a Promise is defined as accepted proposal. Section 2 (b) of Contract act says: “a proposal, when accepted, becomes a promise”. This is another way of saying that an agreement is an accepted proposal. The process of definition thus, comes down to this:

“A contract is an agreement; an agreement is a promise and a promise is an accepted proposal”

‘An Offer’ or ‘Proposal’ is the basic block upon which the concept of Indian Contract Act,1872 lies. Offer defined under Section 2(a) of Indian Contract Act,1872:

“When one person signifies to another his willingness to do or to abstain from doing anything, with a view to obtaining the assent of that other to such act or abstinence, he is said to make a proposal.”

In view of the above definition, an offer is in the first place and expression of the offeror’s willingness to do or to abstain from doing something. Secondly, it should be made with a view to obtaining the assent of the offeree to the purposed act or abstinence.

II. PARTIES INVOLVED IN OFFER

1. Offeror- The person who is making an offer to others is called the promisor or “offeror”.

2. Offeree- The person to whom the offer has been made is called “offeree”. And when he accepts the offer, he is called a “promisee”.

In the terminology of Section 2(c), when the offeree accepts the proposal by the offeror then he becomes the Acceptor of that offer.

III. TYPES OF OFFER

According to the Indian Contract Act of 1872 (ICA), there are several types of offers as follows:

1. EXPRESS OFFER

The first type of offer as described by Section 9 of the ICA is one in which the proposal is communicated in a straightforward manner. An "express offer" is one that is made by the use of words, whether they be spoken or written. This type of offer involves making a proposal via mail, phone, or the internet. It becomes necessary to use language and words. The offeror expressly makes the offer and communicates it to the offeree. The intention to do or refrain from doing something must be clearly communicated. Therefore, of all types of offers, an express offer is the most common.

2. IMPLIED OFFER

An offer and its acceptance don't always have to be official; they can also be inferred from the parties' behaviour, which includes both their acts and omissions. This forms the basis of the second type of offer described by Section 9 of ICA i.e., "Implied Offer" where the communication is non-verbal and part of the behaviour.

Second type of offer defined by Section 9 of ICA, when the communication is not through words and it becomes part of the conduct, then it can be termed as an ‘Implied Offer’. An offer and its acceptance need not always be formal, offer and acceptance can also be spelt out from the conduct of the parties which covers not only their acts but also the omissions.

To give validity to such kinds of offers, the courts relies on the maxim “consensus ad idem” which means “meeting of the minds”. In particular, it refers to the situation where there is a common understanding in the formation of the contract. The consent can be express or implied. Important thing is that the minds of the parties have to meet.

Examples of Implied Offer:

• The best illustration is the case of the builder who was given the assignment to construct a building. The condition regarding the fitness of dwelling was not addressed anywhere in the contract's complete set of expressly stated clauses. However, the court ruled the contractor to be thus liable based on the case's facts, which suggested that the contractors had the knowledge necessary to build liveable homes. It is but natural also, in the given facts, that if a consumer asks for the construction of a building, it should be habitable.

• A bid at an auction is an implied offer to buy.

• Consuming eatables at a self-service restaurant, create implied promise to pay for the benefits enjoyed.

3. CROSS OFFER

Cross Offer refers to a tricky situation, where two people make simultaneous and similar offers to each other. Cross offer resembles to a situation of ‘double coincidence of wants’. A cross offer is quite identical to the ancient Barter System of Exchange.

The concept of cross offer is can be understood in detail through the classic case of ‘Tinn V Hoffman’. In the case of Tinn V Hoffman, the defendant offered to sell 800 tons of iron at 69s per ton to the petitioner. At the same time, the petitioner also made an offer to purchase the same quantity of iron from the defendant at the same price. The court held that these cross offers are made side by side and both parties did not have any idea about the such offer, so the parties are not bound to honour the contract. A cross offer cannot be treated as any mutual acceptance. Thus, no binding effect would accrue on either party.

Cross Offer Example:

• A situation where A offers to sell his horse to B for 20 lakhs and B, unaware of A's offer, offers to buy the same horse from A for 20 lakhs is an example of cross offer. In this circumstance, both A and B are considered to be making the cross offer. Moreover, it cannot be viewed as mutual acceptance because there is no acceptance in this situation.

4. COUNTER OFFER

Sometimes, after communicating the original offer to the other party, the interested party comes back with revised or newer terms under which he or she wants the contract to be formed. Some technical details may be changed or some other details as the offeree may like might be added. In simple term, a counter offer is the type of offer involving rejection of original proposal made by the Offeror.

Examples of Counter Offer:

• A offers B a horse for 20 Lakhs, B agrees to buy the horse for 15 Lakhs, this amounts to a
• counter offer and would mean the rejection of the original offer.

• A offers B a white horse for 20 Lakhs, B agrees to buy the black horse instead of white for 20 lakhs, this amount to counter offer.
In the case of Haji Mohd Haji Jiva v. Spinner, it was observed by the Court that once the offeror accepts the conditions so mentioned by the offeree in the new offer, the same becomes the true offer and an integral part of the contractual relationship that would be so affected.

5. GENERAL OFFER

Pamphlets and TV commercials are two prominent examples of how big offers are made to the public in exchange for, instance, a reward. A type of offer, where proposals are being made publicly and are available for acceptance by anybody, qualify as ‘General Offers’.

General Offer Examples:

• The famous case of "Carlill v. Carbolic Smoke Ball Company," in which the defendant company was well-known for producing a smoke ball, is a classic example of a general offer. The defendant company promised to award consumers of the smoke ball with 100 pounds if they contract the flu. The court determined that the terms of the unilateral offer were satisfied when the appellant contracted influenza. After all, there were requirements attached to that general offer, which were promptly met.

• Another example of general offer is the case, where a father announced a prize for anyone who can help him find his son, was viewed as a general offer. When someone did find his son, the court ordered the father to provide the appropriate payment.

6. SPECIFIC OFFER

As the name itself suggests, this is a type of offer where the communication of a proposal happens towards a particular individual. This type of offer would fructify into a contract only when the assent is accorded by that particular individual. Specific offer can be accepted only by that person to whom it is made. It demonstrates how unique and exclusive of an element specific type of offer contains.

Example of Specific Offer:

• If A wants to buy a car from B, considering this is a specific offer only B can agree to this offer and not anyone else.

• Another example of Specific Offer can be understood through the case of ‘Boulton v. Jones’. In Boulton v. Jones, the plaintiff had acquired the business of one Brocklehurst, and the defendant had previously done business with Brocklehurst; unaware of the change in ownership, the defendant had sent Brocklehurst an order for specific products. The alteration was only made known to the defendant after he received an invoice, by which time he had already used the products. The plaintiff sued the defendant after he refused to pay the sum because he had a set-off against the original owner. In a unanimous ruling, the judges found the defendant not responsible.

7. STANDING OR OPEN OFFER

The standing offer is comparable to a general offer presented to the entire populace. However, it is kept open for a specific amount of time. People may still apply throughout that time since it is known as an ongoing offer. A standing or open contract is considered to have been concluded, after the other party accepts the offer. The best example of standing or open proposal is a tender, which is nothing more than an offer. The contract won't be created unless it is accepted and that acceptance is communicated.

CONCLUSION

Offer is the starting point of any contract, thus it is essential to figure out which type of offer the offeror has made. Above article makes it quite evident that there are numerous types of offers that can be used to communicate a proposal to do or abstain from doing something to the other party.