C2: OFFER/PROPOSAL: MEANING, ESSENTIALS & TYPES

CAPACITY OF PARTIES
24 August 2023 12:58

• MEANING OF AN OFFER/PROPOSAL
○ THREE ESSENTIALS OF A PROPOSAL/OFFER
○ CONNECTING OFFER TO CONTRACT THROUGH ACCEPTANCE, AGREEMENT & OTHER
ESSENTIAL ELEMENTS
○ SPECIFIC & GENERAL OFFER
• LEGAL RULES FOR MAKING A VALID OFFER/PROPOSAL
• MEANING & ESSENTIALS OF A VALID ACCEPTANCE
○ LEGAL RULES FOR A VALID ACCEPTANCE
• LEGAL ASPECT OF CAPACITY OF PARTIES
○ MINOR
○ PERSON OF UNSOUND MIND
○ DISQUALIFIED PERSONS BY STATUS

• OFFER/PROPOSAL: "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"

• Three essentials in this definition:

1. Expression of willingness
2. Two parties
3. One party wants to extract assent (yes), from another

• RULES FOR A VALID OFFER:

1. An offer may be Express or Implied
2. capable of creating legal relations
3. Terms must be certain
4. Invitation to offer is not an offer
5. May be specific or general
6. Must be communicated to the offeree
7. Should not contain a term the non-compliance of which would amount to acceptance
8. Can be made subject to any terms and conditions
9. To identical cross offers do not make a contract

• PROPOSAL/OFFER TO PROMISE: "A proposal when accepted becomes a promise"

• ACCEPTANCE: "when the person to whom the proposal is made signifies his assent thereto, the
proposal is said to be accepted."

• RULES OF ACCEPTANCE:
1. Must be given only by the person to whom the offer was made

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 1. Must be given only by the person to whom the offer was made
2. Must be absolute and unconditional
3. Must be in some usual and reasonable manner
4. Must be communicated by the acceptor
5. Must be given within reasonable time
6. Must succeed the offer
7. Rejected offers can be accepted only if renewed

• CAPACITY OF PARTIES:

"Every person is competent to contract who has attained the age of majority according to the law
to which he is subject, and who is of sound mind, and is not disqualified from contracting by any
law to which he is subject."

1. MINOR:
 Minor’s agreement inoperative against him and is absolutely void
 Ratification of minor’s contract is not valid
 Minor is considered a beneficiary
2. PERSON OF UNSOUND MIND: The Soundness of mind of a person depends on two facts:
 his capacity to understand the terms of the contract, and
 his ability to form a rational judgment as to its effect upon his interests.
 Three Types:
a. Lunatics
b. Idiots
c. Drunken or Intoxicated Persons – burden of proof
 Contracts with a person of unsound mind is voidable at the option of an unsound
mind person
3. DISQUALIFIED PERSON:
I. Alien Enemies
II. Foreign sovereigns brand ambassadors
III. Convict
IV. Married Women – with qualified rights
V. Insolvent
VI. Joint stock company

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