Define offer and acceptance what are the essentials of these?
11/September/2025 10:47
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Let’s go step by step to clearly understand Offer and Acceptance, and their essentials, as these two form the foundation of a valid contract.
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1. Definition of Offer
An offer (or proposal) is defined under Section 2(a) of the Indian Contract Act, 1872:
> “When one person signifies to another his willingness to do or 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 simple words, an offer is when one party expresses readiness to enter into a contract on certain terms, intending that the other party should agree.
Essentials of a Valid Offer
1. Intention to create legal relationship – The offer must show willingness to be legally bound, not just casual talk.
Example: A saying to B, “I’ll sell you my car for ₹5,00,000” is an offer. But saying “I may sell my car” is not.
2. Certain and definite terms – The terms of the offer must be clear, not vague.
Example: “I will sell you a car at a reasonable price” is vague, but “I will sell you my Honda City for ₹5,00,000” is valid.
3. Communication of offer – The offer must be communicated to the offeree.
Example: If A leaves a reward notice in his cupboard and B finds a lost item without seeing it, no contract arises.
4. Can be general or specific:
Specific offer: Made to a specific person (e.g., A offers to sell his car to B).
General offer: Made to the world at large (e.g., reward for finding a lost pet).
5. Not mere invitation to offer – Display of goods in a shop, price lists, or advertisements are invitations to offer, not offers themselves.
6. Offer must be lawful – Illegal or impossible acts cannot form valid offers.
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2. Definition of Acceptance
According to Section 2(b) of the Indian Contract Act, 1872:
> “When the person to whom the proposal is made signifies his assent thereto, the proposal is said to be accepted. A proposal, when accepted, becomes a promise.”
? Acceptance means the offeree agrees to all the terms of the offer without any changes.
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Essentials of a Valid Acceptance
1. Absolute and unconditional – Acceptance must agree to all terms of the offer.
Example: If A offers to sell his bike for ₹1,00,000 and B says, “I accept but will pay ₹90,000,” it is a counter-offer, not acceptance.
2. Must be communicated – Silence is not acceptance. The acceptance must reach the offeror (can be oral, written, or through conduct).
3. Must be made in prescribed mode – If the offer specifies a mode (email, letter, etc.), it should be followed. If not, reasonable mode is allowed.
4. Must be given within stipulated/reasonable time – If no time is fixed, it must be within a reasonable period.
5. Acceptance must be given by the offeree only – A stranger cannot accept the offer.
6. Acceptance must be made before the offer lapses or is revoked – Once an offer is withdrawn or expired, it cannot be accepted.
7. Acceptance creates legal relationship – There must be an intention to create binding obligations.
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3. Example of Offer and Acceptance
Offer: A tells B, “I will sell you my laptop for ₹40,000.”
Acceptance: B replies, “I agree to buy it at ₹40,000.”
? Here, the offer + acceptance = promise, which is the foundation of a valid contract.
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✅ Conclusion:
Offer is the first step in creating a contract.
Acceptance converts an offer into a promise.
Together, they are the base of all contractual relationships.
