Offer and Acceptance

The words Proposal and Offer are synonyms and are used interchangeably.

Section 2 (a) of Indian contract 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 obtain assent of that other to such act or abstinence, he is said to make a proposal”

Thus, a proposal or offer is an expression of willingness by one person to another to enter into an agreement on the terms stated by him with an intention to obtain the assent of the other.

Illustration: Tanu says to Tanushree “I want to sell my wrist watch for ₹200. Will you buy it” Here, Tanu is expressing her willingness to sell her wristwatch at her terms i.e. for ₹200. With a view to obtaining the assent of Tanushree to buy it. This is a Proposal from Tanu.

The person who is making the proposal is Proposer and the person to whom it is made as known as offeree. Once the proposal is accepted by the offeree the proposer becomes Promisor and the offeree becomes Promisee.


Characteristics of an Offer:

  1. At least two parties: In order to make a proposal, there must be at least two parties. Proposer and offeree. A person cannot enter into contract with himself and cannot be under obligation to himself.
  2. A proposal may be positive or negative: A proposal is positive when the proposer puts a positive proposal to someone. For example, Ekta Kapoor offers Shubh to make a TV serial. Here Ekta Kapoor is putting a positive proposal to Shubh to do something. Suppose, some conflict arises between them and Ekta Kapoor slaps Shubh. Shubh says that he would file a harassment case on Ekta Kapoor. Ekta requests Shubh not file a case of harassment on her. Here, the proposal from Ekta for not filing a case on her is a negative proposal. As the proposal is to abstain from doing something, the proposal is a negative proposal.
  1. A proposal may be made to obtain assent from another: there must be an intention to get the assent of another when the offer is made. A proposal without intention to get assent of another is not a valid proposal in the eyes of law.
  2. The proposal must be made with an intention to create legal obligation: most of the domestic, social and friendly proposals do not have intention to create legal obligations. So they are not valid proposal in the eyes of law. The agreement which are of commercial nature have the intention to create legal obligation and they are valid.
  3. Proposal must be communicated: the proposal must be communicated from the offerer to the offeree. if it is not communicated then it will never be accepted and will never create an obligation.