Class Notes for BBIS

Santosh K.C

Offer

Generally Offer mean will present by the one party in front of other to do or not to do something. It is the
starting point of any agreement or contract. The offer and its acceptance is the universally acknowledge
process for the making of a contract.

According to section 2(b) of NCA 2056 offer means “offer put forward by one person to another with the
expectation of obtaining his consent for performing of not performing any work."

Similarly Indian Contract Act 1872 define offer 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 such act or
abstinence, he is said to make offer."

Thus to be offer there should be at least,

a. presentation of will by party

b. To do or not to do anything
c. with the intention to get consent or acceptance
Here those who makes the offer is called the offeror and to whom the offer has been made is called the
offeree.

Kind of offer

1. Express – Oral or Written

2. Implied – By showing the behavior or activities that indicate the offer
3. Offer to the certain person – Can only be accept by a person to whom it is directed
4. Offer to the particular group - only be accept by a group to whom it is directed
5. Offer to the general public (visit section 10 of NCA 2056) – Anyone can accept

Rules regarding valid Offer

Since offer is the starting point of the contract, it should be valid one and there are some rules for the
validity of offer

1. Intention to create legal relationship

For the creation of valid contract offer should be made with the intention to create legal relationship. Until
and unless an offer doesn’t owe the intention to create legal relationship it doesn’t make a valid offer and
contract itself. Generally following statement doesn’t have intention to create legal relationship and are
not the valid offer in the eye of law

a. Social invitation – Invitation for marriage ceremony

b. offer made in joke or in excitement – I want to sell my motorbike for 5 rupees
c. invitation to offer/treat – Display of goods in glossary shop
d. Statement of intention – I would like to sell my house

2. Offer should be communicate to the offeree.

Offer should be communicate to the offeree for the validity of offer. If offeree doesn’t have knowledge
about the offer or offer is not communicated then it can't create any valid contract and legal obligation to
the parties.
 Class Notes for BBIS
Santosh K.C

In the case of LalMan Sukla v. Gauri Dutta, AIR 1913 489 the Indian Court of law held that " For the
creation of contract and legal obligation to the parties, offer should be communicate to the offeree for the
acceptance and since there is not knowledge of offer to the offeree no contract has been made."

3. Offer should be certain

Offer should be certain and unambiguous. The terms and condition of offer should be definite and clear.
If there is confusion in terms of offer then it may give the confusion in obligation to the parties itself.
Thus offer should be certain for its validity. E.g. If X Offer Y to Purchase his bike then X has to disclose
all the fact and related thing like price, color etc.

4. Offer could be revoked

Visit section 8 of the NCA 2056

5. Offer is terminated in certain situation ( Refer section 9 of NCA 2056)

a. By the death or insanity of offeror
b. Lapse of time
c. Alteration of term of offer ( Cross offer)
d. Subsequent illegality
e. Death or insanity of offeree
f. If offer is revoked as per section 8 of NCA 2056 etc.

Acceptance

Acceptance is the act of assenting by the offeree to an offer. In other word, it is the manifestation by the
offeree of his willingness to be bound by the terms of the offer.

Acceptances give the validity to the offer and contract. Moreover acceptance must also be clear,
unambiguous and certain.

According to section 2(c) of NCA 2056 Consent means "Consent given by a person in the same sense in
which the offeror has taken the substance of the proposal presented by him/her to the former is called the
acceptance.

Here for the valid acceptance there should be "meeting of mind" of the both the parties to the contract.
That means the acceptance should be given as to what the offeror has the intention in offer.

Kinds of acceptance

a. Express/direct – Oral or written

b. Implied – by Conduct or Activities

Rules regarding valid acceptance

1. Acceptance should be absolute and unqualified

Acceptance should be absolute and unqualified if there is acceptance with the reservation in offer it is not
the valid acceptance and doesn’t give emergence of valid contract and legal obligation there upon to the
parties”
 Class Notes for BBIS
Santosh K.C

Test case: Nihal Chand v. Amarnath, AIR 1926 Lal 645

2. Acceptance should be given by the person to whom offer is made; another person can't give
acceptance to the offer.
a. Person – only person to whom offer is made
b. Group- Only a person of than group
c. General Public- all the general public

3. Acceptance should be given before lapse of offer.

Since acceptance is given to the offer, it must be given before lapse of offer. Acceptance given to the
offer that was lapsed before doesn’t have any meaning and won’t create any contract.

4. It must be give according to the mode prescribe or usual mode

If offeror prescribe certain mode to give acceptance to the offer then the offeree should use that mode.
But is there is no any prescription of mode for acceptance for the communication then the offeree should
use usual mode.

5. It must be given within reasonable time

If offer doesn’t contain the specific time for the acceptance then the acceptance should be given within
reasonable time. Acceptance after reasonable time doesn’t create any valid contract and obligation upon
the parties.

Like Apurba offer the the Ajaya to send 10 tons of sugar for Tihar before 15 days of Tihar and Ajaya
accept that offer after Tihar will not make any valid acceptance.

6. Acceptance should be given with the intention to create legal relationship

This is most important rule to the formation of valid contract. Parties should have intention to create legal
relationship while giving the acceptance to the offer. Mere jocular acceptance doesn’t create any legal
obligation upon the parties and it won’t create valid contract either.

7. Silence doesn’t amount to acceptance

Section 7(4) of Nepalese Contract Act 2056 provides that although the offer mentions that in case of
failure to communicate refusal within prescribe time shall be regarded as acceptance. The failure to do so
shall not be regarded as acceptance. Thus silence doesn’t amount to acceptance.

8. Indirect performance of term of offer signifies assent for acceptance.

When the offeree acts or performs certain behavior as to the offer then it signifies the assent for
acceptance. This is also called the indirect acceptance

9. Acceptance should be communicate the offeror

Once an offer is accepted by the offeror it must be communicated to the offeree. Only accepting the offer
is not enough, the notice of acceptance should be given to offeror.

10. Acceptance can revoke

See Section 8 of NCA 2056.