1.
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. Section 2(a)
a. Proposal
or Offer
A
proposal is merely an offer to be bound by a promise. It is declaration by the
proposer of his intention to- be bound by an obligation if the offeree fulfils
or undertakes to fulfill certain conditions. It is only on the acceptance of
the offer or proposal that the offer becomes a promise. Therefore, when an
instrument is so worded as to be binding on the proposer, it is in point of law
only an offer and until both parties are bound, neither party is bound. Such
instrument was no more than a proposal because unless the person to whom the
offer was made signifies his willingness to accept it, the proposer would not
in law, ripens into an agreement.
(b)
Offer must be clear
An
offer which does not contain any particulars as to the thing offered does not
constitute a proposal properly so called. Therefore where one person by a
letter asks the consent of another to a certain transaction without stating the
consideration, it is, not an offer.
c. Term
of proposal
A
"term of the proposal" signifies a condition without the fulfillment
of which the proposer is not willing to undertake the obligation. Whether a
particular condition proposed amounts to a term of the proposal depends upon
the intention of the proposer.
d. Undertaking
to make an offer
A
mere undertaking to make an offer in the future in case of a certain
contingency is not an offer. Thus a term in a partition deed that in the event
of any of the brothers wishing to sell his share of the house, he should sell
it to the other brothers at the market value is not an offer itself but merely
an undertaking to make an offer of sale upon the arising of a certain
contingency.
e. Invitation
to offer
In
cases of invitations for orders, a contract would come into being only when the
invitee places an order and the inviter accepts the same. A catalogue of the good of a company for sale
is not a series of offers but only invitation for offers.
f. Pre-conditions
for making a proposal
Where
there is a precondition for making an offer such as pre-qualification for
making a bid for a contract. An offer made by petitioner who had not applied
for pre-qualification in response to respondent's notice, having missed the bus
had to lag behind on account of their own lethargic conduct. The petitioner
would thus be disqualified from making an offer and their offers may not be
considered while granting the contract.
2. Revocation
of proposals and acceptances
A
proposal may be revoked at any time before the communication of its acceptance
is complete as against the proposal, but not afterwards. An acceptance may be
revoked at time before the communication of the acceptance is complete as
against the acceptor, but not afterwards. Section 5
(a)
Revocation of proposal
Under
section 5 of the Contract Act a proposal may be revoked at any time before the
communication of its acceptance is complete as against the proposer. An offer
to sell and to keep the offer open till a certain time is Nudum Pactum and,
can, at any time before acceptance, be recalled.
b. Conditional
Acceptance
A
proposal which is accepted conditionally may be revoked before the acceptance
becomes unconditional. A bidder at an auction sale only makes an offer which he
can withdraw before its acceptance by the fall of the hammer. Where an auction
sale is held under the express condition that the acceptance of the highest bid
would be subject to confirmation by a particular authority, the bidder could
withdraw his offer before such confirmation in spite of the bid having been
provisionally accepted.
(c)
Completed contract
After
a transaction has ripened into a contract it requires the consent of parties to
revoke or modify it. Thus once an offer to be bound by the, special oath of the
other party has been made by a party and accepted by the. other, it cannot be
revoked. He cannot, therefore, be allowed to resile from his offer before the
special oath has actually been taken.
d. Counter-proposal
An
original proposal becomes superseded by the counter-proposal made by the other
party and would not be revived even if the maker of the proposal rejects the
counter offer. Quite a different result would however follow if the person
making the counter-proposal withdraws it before the other either accepts the
counter proposal or rejects it.
3. How
revocation is made
A
proposal is revoked
i. by
the communication of notice of revocation by the proposer to the other part,.
ii. by
the lapse of the time prescribed in such proposal for its acceptance, or, if no
time is So prescribed, by the lapse of a reasonable time, without communication
of the acceptance:
iii.
by the failure of the acceptor to fulfill a condition precedent to acceptance;
or
iv. by
the death or insanity of the proposer, if the fact of his death or insanity
comes to the knowledge of the acceptor before acceptance.
Lapse
of time after proposal
Where
a proposal is not accepted within a reasonable time and no time has been fixed
for the acceptance of the proposal, the proposer may revoke the proposal. Thus
where application for shares-of a company was made in March and July, 1933 and
December, 1934, but there was, no allotment of shares till August, 1935, no
notice of allotment being given to the proposer till then: and there was
nothing in the conduct of the applicant amounting to waiver of revocation; it
was held that S.6(2) applied and the proposals must be defend to have been
revoked.
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