1

TITLE: A STUDY ON INFLUENCE OF INTERNATIONAL LABOR ORGANISATION

(ILO) IN BRINGING CHANGES IN THE CONSTITUTION AND NATIONAL
LEGISLATION

SUBJECT: LABOUR LAW AND INDUSTRIAL RELATIONS - I

STUDENT NAME: VIREN DIPAKBHAI SARVAIYA

ROLL NUMBER AND DIVISION: 51 – A (FY LL.B.)

COLLEGE: JITENDRA CHAUHAN COLLEGE OF LAW

FACULTY NAME: PROF. DR. SHARMILA GHUGE

PROF. SUSHMA MHASKE
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ACKNOWLEDGEMENT

This research was carried out under the able direction of numerous people who helped and
inspired me. I want to take a moment to thank everyone who has supported me during my
academic journey before you read this project.

I want to express my gratitude to the University of Mumbai and the Jitendra Chauhan College
of Law at SVKM for providing me with the chance to study and improve my abilities in this
area.

I want to express my gratitude to our Principal Dr. Priya J. Shah Ma’am for giving the
resources and access needed to finish this project.

I would like to express my sincere gratitude to the Faculty Incharge and other Faculty of
LABOUR LAW AND INDUSTRIAL RELATIONS - I for their unwavering support and
direction over the course of this endeavour.

Last but not least, I want to express my gratitude to my parents, family, and peers for their
unwavering support and encouragement as I worked on this project and continued to develop
my talents.

DATE: VIREN DIPAKBHAI SARVAIYA

3rd December, 2023 51 – A

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TABLE OF CONTENTS

SR. NO. PARTICULARS PAGE NO

1. ABSTRACT 4

2. INTRODUCTION 4

3. BACKGROUND 5

4. ESSENTIALS OF A VALID PROPOSAL / OFFER 5

5. COMMUNICATION OF PROPOSAL / OFFER 8-9

6. REVOCATION OF PROPOSAL / OFFER 9-10

7. TYPES OF PROPOSAL / OFFER 10-11

8. LEGAL PROVISIONS 12

9. SUPREME COURT JUDGMENT 12-13

10. RELEVANT CASE LAWS 13-14

11. CONCLUSION 14

12. BIBLIOGRAPHY 15
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 INTRODUCTION 2

Section 2(a) of the Indian Contract Act of 1872 states that, 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. With a few rare exceptions, practically all of human behaviour is
constrained by the law.

The person making the proposal is called the Promisor / Offeror and the person to
whom the proposal is being made is called the Promisee / Offeree. When the person
to whom the proposal is being made accepts the proposal then it becomes a promise.

1
Proposal - Indian Contract Act 1872, Legal Services India,
https://www.legalservicesindia.com/law/article/1591/4/Proposal-Indian-Contract-Act-
1872?id=1591&u=4

2
Proposal - Indian Contract Act 1872, Legal Services India,
https://www.legalservicesindia.com/law/article/1591/4/Proposal-Indian-Contract-Act-
1872?id=1591&u=4
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 BACKGROUND 3

In 1861, the third Indian Law Commission in England drafted the current version of
the Indian Contract Act which included the Interpretation Clause in Section 2 of the
Indian Contract Act, 1872 which described the term Proposal.

Although the bill was not the entire law of contracts, its purpose was to meet the
country's needs for a significant amount of time. During this time, judges of the
courts relied on English laws to decide cases when they were unable to do so in
accordance with fairness, skill, and morality. A person is obligated to keep a promise
until the end of their life.

Even though it may appear that following such a rigid principle would make sense,
there must be some exceptions or the community would suffer greatly. The contract
law came into effect despite this vice. The bill's author was aware that different
religious people adhered to personal laws and that it would be difficult for them to
follow the new rules. This ensured that the unique personal laws governing any
aspect of the contractual relationship would not be affected by the new rules, unless
they were in direct opposition to them.

 ESSENTIALS OF A VALID PROPOSAL / OFFER 4

1) An offer must be made with an intention to create legal obligations

According to section 10 of the Indian Contract Act of 1872, the intention to establish
legal relations is not a requirement for a contract; however, English law considers
this principle to be a requirement for an offer. In the case of Balfour v. Balfour, Mr.
Balfour and his Sri Lankan wife went on vacation to England. While there, Mrs.
Balfour got very sick and was told not to go back to Sri Lanka. After promising to
pay his wife 30 Euros per month, Mr. Balfour consented to his wife remaining in
England while he returned to Sri Lanka.

3
Historical Background Of Indian Contract Act 1872, Sujoy Paul, Legal Service India E-
Journal https://www.legalserviceindia.com/legal/article-7749-historical-background-of-
indian-contract-act-1872.html
4
Proposal - Indian Contract Act 1872, Legal Services India,
https://www.legalservicesindia.com/law/article/1591/4/Proposal-Indian-Contract-Act-
1872?id=1591&u=4
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The couple's relationship soured over time, and Mr. Balfour stopped paying his wife
a monthly salary. Mr. Balfour made that promise to his wife without intending to
create legal obligations, and the judge ruled that the courts do not have dominion
over social agreements when Mrs. Balfour filed a case against her husband.

2) An offer may be express or implied

According to Section 3 of the Indian Contract Act, an express offer is one that is
made verbally or in writing. On the other hand, an implied offer is one that is made
by the act or behavior of the offeror. In the Uptron Rural District Council v. Powell
case, the defendant had called Uptron Fire Brigade because he believed he was
entitled to its free service after a fire broke out on his farm. Since the defendant's
farm did not lie within the brigade's free service zone, the brigade claimed payment
for its efforts to put out the fire. The court decided that the defendant wanted and
asked for Upton's assistance, and that Upton provided it. As a result, it was decided
that the services were provided with an implied promise to pay.

3) The terms of the offer must be definite and not vague

At the time of signing the contract, all of its terms must be agreed upon. Because the
terms are unclear, an agreement to agree in the future is not a contract. Because the
term "present style" is very ambiguous and can mean different things to different
people, an agreement to take a lease of a house for a certain amount of time at a
certain rate when a condition in the lease states that the lease will be completed if the
house is put through repair and the drawing room is decorated according to the
current style is not a valid offer.

4) An offer cant prescribe silence as a mode of acceptance

If the offeror states that if the acceptance of the offer is not communicated by a
particular date, then the offer would be presumed to have been accepted, then the
offer is deemed invalid.

In Felthouse v. Bindley, a person made an offer to his nephew to buy his horse and
wrote that the offer would be considered accepted if the acceptance was not
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communicated by a certain date. The nephew did not respond to the offer, but he did
tell his auctioneer not to sell that horse. However, the auctioneer sold the horse by
accident, and the uncle then filed a lawsuit against the auctioneer. The court ruled
that the nephew and his uncle had no communication regarding the sale of the horse.

5) A general offer need not be specifically accepted

An offer that is made to the entire world can be accepted by anyone, and the offeror
need not be informed of this acceptance. In the Carlill V. Carbolic Smoke Ball Co.
case, the defendants were in the business of making some balls—a medical
preparation against influenza—and had published an advertisement in a newspaper
promising a reward of 100 Euros to anyone who contracted influenza after using
their balls. The defendant made a charitable bank deposit of one thousand euros.
Mrs. Carlill, the plaintiff, sued the defendants for compensation after contracting
influenza while using the ball as directed. Because it was a general offer and they
had broken it as soon as Mrs. Carlill got the flu, the defendants were held liable.

6) An offer differs from an invitation to offer

The Latin expression "Invitatio ad offerendum," which indicates a willingness to

negotiate, is the origin of the term "invitation to offer." A person who sends an
invitation to offer does not intend to be bound by it as soon as the person to whom it
is addressed accepts it. It's a move that makes an offer to the other party. In contrast,
an offer specifies the fundamental terms of the agreement so that no further
negotiations will be necessary. Tender, product display, auction, advertisement, etc.
are a few examples of the invitations you can give. In the Pharmaceutical Society of
Great Britain v. Boots Cash Chemists (Southern) Ltd. case, a customer bought a drug
at the cash register after selecting it from a self-service shelf. The customer's action
raised the issue of whether it was an acceptance of the offer or an offer that was
being made. It was determined by the courts that it was an offer to buy, and no sale
would take place until the buyers accepted the offer at the price it was offered.

7) Offer must be Communicated

It is essential for an offer to be communicated for it to be valid. In accordance with

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Section 4 of the Indian Contract Act, a proposal is considered complete when it

reaches the recipient's knowledge. An offer cannot be accepted until it has been made
known to the person who is making it. In the case of Lalman Shukla v. Gauri Dutt[6],
the defendants' nephew fled, and they sent his servants to various locations to find
him. When the defendant advertised for a reward of Rs., the plaintiff, one of the
defendant's servants, was sent to Haridwar. 501 for the boy's recovery. The boy was
found by the plaintiff, but he was unaware of the reward. He continued working for
the defendant until he was fired, at which point he filed a lawsuit to get the reward.
Because the plaintiff was unaware of the offer, the courts decided that he was not
entitled to the reward.

5
 COMMUNICATION OF PROPOSAL / OFFER

According to Section 4 of the Indian Contract Act, 1872 the communication of a

proposal is complete when it comes to the knowledge of the person to whom it is
made.

Communication of an acceptance of a proposal to the proposer is complete when it is

sent to him in a way that is beyond his control, whereas communication of an
acceptance of a proposal to the proposer is complete when it is known to the
proposer.

In the case of Household Fire Insurance Co. v. Grant, the court ruled that even if the
letter is lost in the mail and does not reach the offeror, the acceptance is complete
and a legally binding contract is formed as soon as it is posted.

The plaintiff in the Entorse Ltd. v. Miles Far East Corporation case was a London-
based company that made a telex offer to the defendant, an American company, to
sell a certain amount of meat.

5
Proposal - Indian Contract Act 1872, Legal Services India,
https://www.legalservicesindia.com/law/article/1591/4/Proposal-Indian-Contract-Act-
1872?id=1591&u=4
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The defendant's company accepted the telex offer itself. The location of the contract
and which court would have jurisdiction over any disputes were the two issues that
came up. Since a contract is considered to have been made at the location where the
offeror receives acceptance, it was decided that the transaction took place in London.

6
 REVOCATION OF PROPOSAL / OFFER

According to Section 5 of the Indian Contract Act, 1872 a proposal may be revoked
at any time before the communication of acceptance is complete as against the
proposer, but not afterwards. This implies that the communication of revocation of
offer can be effective only when the revocation reaches the offeree before he posts
his acceptance and makes it out of his power.

In Henthorn v. Fraser, the appellant was summoned to the Liverpool office of a

building society to talk about buying some houses from the society. He could
purchase it for 750 Euros for 14 days from the society. Between 12 and 1 p.m. the
following day, the society sent out a letter withdrawing the offer. The appellant
posted his letter of acceptance around 4 p.m. that same day, while the letter of
withdrawal did not reach him until after 5 p.m. The secretary in the society office
opened the acceptance letter the following day because it arrived after the office had
closed for the day. Since the appellant had no control over the acceptance at 4 p.m.
and had not received the letter of revocation prior to that time, it was determined that
the contract was valid.

A proposal can be revoked in the following situations:

1) By sending notice of revocation to the proposee, the proposer can revoke a proposal.

2) A proposal can be revoked if the time specified in the proposal has passed, or if the
offer does not specify a time, the proposal will expire after a reasonable amount of
time has passed.

3) When the proposer dies or becomes insane, and if the acceptor learns of the
proposer's death or insanity before accepting.

6
Proposal - Indian Contract Act 1872, Legal Services India,
https://www.legalservicesindia.com/law/article/1591/4/Proposal-Indian-Contract-Act-
1872?id=1591&u=4
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4) If an acceptor fails to fulfill a prerequisite to the proposal's acceptance, the proposal

can be withdrawn.

 TYPES OF PROPOSAL / OFFER 7

1) GENERAL OFFER

An offer that is made to the general public and does not specify who can accept it is
known as a general offer. The case of Harbhajan Lal v. Harcharan Lal, in which the
defendant's son ran away from his home and the defendant sent out a notice stating
that anyone who found his son would be rewarded Rs., is an example of a general
offer. 500. The defendant was informed after the plaintiff discovered the son who had
vanished at a railway station. Because the defendant's notice was a general offer that
could be accepted by anyone, the plaintiff had received the reward.

2) SPECIFIC OFFER

A specific offer is one that is only made to a specific group of people and has
restrictions on who can accept it. For instance, X proposes to purchase a car from Y
for Rs. 10 lakh. This is a specific offer that has been made to a specific person named
Y, and only Y can accept it. In Boulton v. Jones, the defendant used to deal with
Brockle Hurst. He sent Hurst an order to buy some goods, but Hurst had already sold
his business to Boulton by the time the offer got to Hurst. After receiving the order,
Boulton sent the items to Jones without informing him of the business's ownership
change. Jones claimed that he intended to enter into a contract with Hurst rather than
Boulton when he learned of the business's new ownership and refused to pay Boulton
for the items he had purchased. As a result, it was decided that Jones was not obligated
to pay Boulton because he made a specific offer to Hurst.

7
Proposal - Indian Contract Act 1872, Legal Services India,
https://www.legalservicesindia.com/law/article/1591/4/Proposal-Indian-Contract-Act-
1872?id=1591&u=4
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3) COUNTER OFFER

When the offeree rejects the initial contract but is willing to accept the offer after
making some modifications, such as additions or deletions from the original contract,
it is said that a counter offer has been made. In this case, the initial offer is declined
and cannot be reconsidered later. In such circumstances, both the offeror and the
offeree change roles and become the new parties. Only the person who made the initial
offer has the authority to accept or reject a counteroffer, and a contract is only
established if that party does.

Hyde V. Wrench was a sale of the defendant's farm to the plaintiff for £1,200, but Mr.
Hyde turned down the offer. The defendant subsequently made a second offer to
purchase the farm for £1,000 while announcing that it was his last bid for the property.
Mr. Wrench rejected Mr. Hyde's offer of £950 for the farm in response. Mr. Hyde then
consented to pay the previously proposed price of £1,000 to purchase the farm. When
Mr. Hyde rejected the offer, Mr. Wrench made a counter offer, but the defendant
rejected it, invalidating the first one. As a result, Mr. Wrench refused to sell his farm.

4) CROSS OFFER

When two parties make the exact same offer to each other at the exact same time, it is
said that a cross offer has occurred. Since such an offer is entirely dependent on
chance, it rarely occurs in the real world. There won't be a contract in this case
because it cannot be said that one party's offer has been accepted by the other.

5) STANDING OFFER

If an offer is intended to be valid for a specific period of time and may be accepted at
any moment prior to the deadline, it is referred to as a standing offer. It is also known
as an ongoing or open offer. In the case of Ramsgate Victoria Hotel Firm v.
Montefeire, M offered to purchase shares in company R on June 8th, and on
November 23rd, he received his letter of allotment. M declined to accept the shares
because M was allowed to decline the offer because it was not a standing offer and the
5-month period was not a fair one.
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 LEGAL PROVISIONS 8

The Indian Contract Act, 1872 lays down all legal provisions with respect to the term
Proposal. The term Proposal is interpreted in Section 2 (a) of the The Indian Contract
Act, 1872 as stated earlier in this Research Paper.

Section 3 states Communication, acceptance and revocation of proposals:

The communication of proposals the acceptance of proposals, and the revocation of

proposals and acceptances, respectively, are deemed to be made by any act or
omission of the party proposing, accepting or revoking by which he intends to
communicate such proposal, acceptance or revocation, or which has the effect of
communicating it.

Section 5 states Revocation of proposals and acceptances:

A proposal may be revoked at any time before the communication of its acceptance
is complete as against the proposer, but not afterwards. An acceptance may be
revoked at any time before the communication of the acceptance is complete as
against the acceptor, but not afterwards.

 SUPREME COURT JUDGMENT 9

Bhagwandas Goverdhandas Kedia vs M/S. Girdharilal Parshottamdas [AIR 1966 SC

543]

The Honorable Supreme Court held that the Trial Court was right and that the
decision should have been made under its jurisdiction because the offeror heard the
acceptance communication over the phone. As a result, the appeal was denied.

Hence, the scope of offer and acceptance communication was expanded by this case.
In a case where the breach was committed, the court made the decision to question
the cause of action's origin. It clarified the guidelines for telephone offer,
acceptance, and revocation communication.

8
The Indian Contract Act, 1872
9
Bhagwandas Goverdhandas Kedia vs M/S. Girdharilal Parshottamdas, All India Reporter of 1966
Supreme Court 543
 13

It stated that the rule that applies to postal acceptance does not apply to phone
acceptance. The situation resembles a face-to-face conversation when agreement is
reached over the phone. Therefore, when communication is instantaneous, such as
over the phone, acceptance of the offer is made at the offeror's location.

 RELEVANT CASE LAWS

10
1) Balfour vs Balfour [1919 2 K.B. 571]

In an English case, Mr. Balfour, who was posted in Ceylon, promised his wife living
in England, to pay her a monthly allowance, so long as she could not go to Ceylon
for reasons of health. When Mr. Balfour failed to honour his promise, and she filed a
suit against him, the Court held that she could not enforce the obligation, as from the
nature of the contract, it was clear that no intention existed to give rise to a legal
obligation. It was merely a domestic, arrangement.

2) McGregor vs McGregor [1888 21 Q.B.D. 424] 11

In this case, a husband and wife withdrew the complaints which they had filed
against each other under an agreement by which the husband promised to pay an
allowance to the wife, and she, in turn, agreed to refrain from pledging his credit.
The Court held that the agreement was a valid contract.

3) Appleson vs Littlewood [1939 1 All Eng. Rep. 464] 12

A football pool competition was run on the understanding that as between the
competitors and the organisers, no legal relationship whatsoever would arise. X, who
sent a successful forecast of the result, could not sue for the prize, as no legal claim
existed, which a Court would enforce.

10
The Law of Contracts 2018 by N.H. Jhabvala, Page No. 7
11
The Law of Contracts 2018 by N.H. Jhabvala, Page No. 7
12
The Law of Contracts 2018 by N.H. Jhabvala, Page No. 7
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4) Montreal Gas Company vs Vasey [1900 A.C. 595] 13

A promises to consider favourably the application of B, a contractor, for renewal of

a contract, if satisfied with B’s bonafides. The Court held that this did not create
legal relations between the parties.

5) Harshad Chiman Lal Modi v. DLF Universal Ltd. [(2005) 7 SCC 791] 14

According to this case, a proposal can be withdrawn at any time prior to acceptance
unless the proposer explicitly or implicitly prohibits it.

 CONCLUSION

In conclusion, a proposal or offer is an essential component of a contract's formation.

The parties involved, clear communication of the offer, the establishment of legal
relations, obtaining consent, clear and unambiguous terms, and the absence of a
negative condition must all be satisfied for an offer to be considered valid. Although
an offer can be conditional or explicit, the offeree cannot be required to accept it. To
ensure the contract's validity and avoid any legal disputes, it is essential to
comprehend these essentials.

13
The Law of Contracts 2018 by N.H. Jhabvala, Page No. 8
14
Harshad Chiman Lal Modi v. DLF Universal Ltd. [(2005) 7 SCC 791], Indian Kanoon
https://indiankanoon.org/doc/1475910/
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 BIBLIOGRAPHY

A) STATUTES

1) The Indian Contract Act, 1872

B) BOOKS

1) The Law of Contracts 2018 by N.H. Jhabvala

2) All India Reporter of 1966

C) ARTICLES

1) Proposal - Indian Contract Act 1872, Legal Services India,

https://www.legalservicesindia.com/law/article/1591/4/Proposal-Indian-Contract-
Act-1872?id=1591&u=4

2) Historical Background Of Indian Contract Act 1872, Sujoy Paul, Legal Service
India E-Journal https://www.legalserviceindia.com/legal/article-7749-historical-
background-of-indian-contract-act-1872.html

3) Harshad Chiman Lal Modi v. DLF Universal Ltd. [(2005) 7 SCC 791], Indian
Kanoon https://indiankanoon.org/doc/1475910/

D) CASE LAWS

1) Bhagwandas Goverdhandas Kedia vs M/S. Girdharilal Parshottamdas [AIR 1966

SC 543]

2) Balfour vs Balfour [1919 2 K.B. 571]

3) McGregor vs McGregor [1888 21 Q.B.D. 424]

4) Appleson vs Littlewood [1939 1 All Eng. Rep. 464]

5) Montreal Gas Company vs Vasey [1900 A.C. 595]

6) Harshad Chiman Lal Modi v. DLF Universal Ltd. [(2005) 7 SCC 791]