Offer and Acceptance under Indian Contract Act 1872

The Indian Contract Act, 1872, governs the legal principles of contracts in India. A contract is a legally binding agreement that creates an obligation between two or more parties. It is essential to understand the concept of offer and acceptance in contract law.

An offer is a proposal made by one party to another with the intention of creating a legal relationship. It is a statement of willingness to enter into a contract on certain terms and conditions. The offer must be communicated to the other party, and the terms of the offer should be clear and definite.

For example, if A offers to sell his car to B for Rs. 5 lakhs, it is a clear offer, and if B accepts the offer, a legally binding contract is formed.

Acceptance is the expression of assent by the offeree to the terms of the offer. It must be unconditional and absolute. The acceptance must be communicated to the offeror, and it should be within the specified time frame. Any proposal that does not conform to the terms of the offer is not an acceptance but a counter-offer.

For example, if B accepts A`s offer to sell his car for Rs. 5 lakhs without any conditions, a legally binding contract is formed. However, if B accepts the offer but proposes to pay Rs. 4 lakhs, it is not acceptance but a counter-offer.

The Indian Contract Act, 1872, lays down specific rules regarding the offer and acceptance of contracts. According to Section 2(a), when one person signifies to another his willingness to do or abstain from doing anything with the intention of obtaining the assent of that other to such act or abstinence, he is said to make a proposal.

On the other hand, Section 2(b) defines acceptance as “when the person to whom the proposal is made signifies his assent thereto, the proposal is said to be accepted. A proposal, when accepted, becomes a promise.”

The Act also specifies that an offer can be revoked at any time before acceptance, and an acceptance that is not communicated to the offeror is not valid. A contract is formed when there is a meeting of minds between the parties, and the terms of the contract have been agreed upon.

In conclusion, offer and acceptance are the fundamental elements of a contract. Both parties must be clear about the terms of the contract, and there must be an absolute and unconditional acceptance of the offer. The Indian Contract Act, 1872, sets out the rules governing the formation of contracts, and it is essential to understand these rules to ensure that any contract entered into is legally binding.