PROPOSAL AND TYPES OF OFFER
Define the term “Proposal” as per the Indian Contract Act 1872 and also explain in brief the kinds of offers.
In the Indian Contract Act, 1872, a “Proposal” is defined as the term equivalent to what is commonly known as an “offer” in contract law. Section 2(a) of the Act defines a proposal as:
“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 the act or abstinence, he is said to make a proposal.”
The kinds of offers under contract law are: 1. Express Offer (Sec-9): An “express offer” is one that is made by the use of words, whether they are spoken or written. For example, offering to sell a house for a certain price is an express offer.
2. Implied Offer (Sec-9): This type of offer is inferred from the conduct, actions, or circumstances of the parties involved. For instance, entering a restaurant, sitting down, and ordering food implies an offer to purchase the meal at the menu-listed price.
3. Specific Offer: 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 the person to whom it is made. For instance, if someone offers to sell their books to a specific friend, only that friend can accept the offer.
4. General Offer: A general offer is made to the public at large, and anyone who fulfills the specified conditions can accept the offer. An example of a general offer is a reward for finding a lost item, where anyone who finds it and meets the stated conditions can claim the reward.
5. Cross Offer: A cross-offer occurs when two parties make identical offers to each other without being aware of the other’s offer. Since the offers are the same, they don’t result in a valid contract as there is no clear acceptance. For instance, A offers to sell his house to B for 20 lakhs and B, unaware of A’s offer, offers to buy the same house from A for 20 lakhs.
6. Counter Offer: A counter offer is made as a response to an original offer, but it introduces new terms or modifies some of the existing terms. A counter offer is considered a rejection of the original offer and becomes a new proposal that the original offeror can either accept or reject. For instance, A offers B a house for 20 Lakhs, B agrees to buy the house for 15 Lakhs, this amounts to a counter offer and would mean the rejection of the original offer.
7. Standing Offer: A standing offer is an open offer that remains valid for a specific period or until it is revoked by the offeror. For instance, Tender for the supply of the products through an advertisement.
