Communication of offer and acceptance

Section 2(h) of the Indian Contract Act, of 1872 defines a contract as a legally enforceable agreement. It may be expressed as an oral or written contract. A legal object that binds the parties to the contract must exist for it to be legally enforceable. Among the many kinds of legal contracts are lease agreements, employment contracts, loan agreements, sale agreements, insurance policies, etc. In addition, a contract is deemed legitimate if it satisfies the three primary components: Offer, Acceptance, and Compensation.

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This Story also Contains

1. What is Communication of Offer?
2. Parameters for a Valid Offer
3. What is Communication of Acceptance?
4. Parameters for a Valid Acceptance
5. Components of a Valid Acceptance
6. Communication of Offer and Acceptance
7. Conclusion

What is Communication of Offer?

• The Indian Contract Act, of 1872, Section 2(a), describes an offer. When one person expresses to another his desire to act or stop from doing so to get that other person's approval, that action or inaction is referred to as a proposal.

• The party proposing or promise for the contract is referred to as the offeror/promisor, and the party accepting the proposal or promise is referred to as the offeree/promisee.

Example: In a letter to B, A offers to mend his roof in exchange for 5,000 rupees. He mails the letter on July 2nd. B receives the mail on July 4. Thus, it is said that the contract would end on July 4.

Types of Communication of Offer

Four categories exist for an offer, these are described below:

Parameters for a Valid Offer

A legitimate offer and acceptance between the parties are necessary for a contract to be enforceable. The fundamental conditions for a legitimate offer and acceptance in a contract are outlined in the Indian Contract Act, of 1872. Here are the Parameter for a legitimate offer:

1. Specific and unambiguous conditions: The conditions of the proposal should be unambiguous, specific, and unambiguous. To permit acceptance and the creation of a legally enforceable contract, the offer needs to be specific enough.

2. Intention to establish legal relations: The offer has to make it clear that the parties want to establish legal relations. The offer will not be accepted if there is no desire to establish legal ties.

3. An offer needs to be made with the hope of being accepted: The objective behind making the offer must be to get the offeree to accept it.

4. Offer communication: The offer must be made verbally or in writing by the offeror to the offeree.

Revocation of Offer

• Section 5 of the Indian Contract Act specifies the procedures for withdrawing an offer. It states that the offer may be withdrawn at any moment before the proposer or offeror is fully notified of the acceptance.

• Revocation of the offer is no longer feasible after the proposer has been informed of the acceptance.

Example: On July 10th, A mailed the letter after accepting the offer. B receives the letter on July 14. However, B, the proposer, received notification of the acceptance on July 10th. Therefore, the offer may only be rescinded before July 10th.

What is Communication of Acceptance?

• The Indian Contract Act of 1872 defines acceptance in Section 2(b). When the individual making the suggestion indicates his or her approval, it is deemed accepted. A proposition becomes a promise as soon as it is accepted.

• According to the definition, an offer is considered accepted when the person to whom it is made unconditionally accepts it. Such an offer becomes a promise if it is accepted.

Example: B accepts an offer from A to buy his automobile for two lac rupees. This is now being promised.

Acceptance Mode

There are two things to think about in this transmission of acceptance: how it is accepted and when it is accepted. There are two approaches to acceptance:

1. Communication of Acceptance by Behaviour: The offeree may also express his acceptance of the offer by acting in a certain way or by acting in a certain way. Let's assume that by boarding the bus, you agree to pay the fare with your behaviour.

2. Communication of Acceptance by an Act: This might include verbal or written transmission of information. Thus, this will cover correspondence by phone, letter, email, telegraph, etc.

Parameters for a Valid Acceptance

Here are the prerequisites for a legitimate acceptance:

1. Acceptance communication: The offeror must be informed, either verbally or in writing, of the acceptance.

2. Acceptance needs to follow the conditions of the offer: Acceptance needs to follow the conditions of the offer. The acceptance will not be accepted if it does not comply with the terms of the offer.

3. Unqualified and unconditional acceptance: The acceptance needs to be both unqualified and unconditional. Any changes made to the offer's conditions will be viewed as counteroffers and will not be accepted.

4. Unqualified and unconditional acceptance: The acceptance needs to be both unqualified and unconditional. Any changes made to the offer's conditions will be viewed as counteroffers and will not be accepted.

Components of a Valid Acceptance

The most crucial components for an offeree's or promisee's acceptance to be considered legitimate are as follows:

• As per Section 7(1) of the Indian Contract Act, a proposition cannot become a promise until it is accepted unconditionally.

• The acceptance cannot be granted in response to threats, excessive pressure, or coercion. The offeree or promisee must freely consent to it being provided.

• The intention of the offeree/promisee to engage in a contract must be expressed.

• The offeror/promisor must be properly informed of the acceptance. Acceptance can be stated or implied.

• If an offer acceptance term is given, the promisee or offeree must accept the offer within that time frame.

• Accepting the offer means that there are no changes or requirements to be met. It needs to be welcomed with open arms.

• The offer does not necessarily indicate that the offeree or promisee has accepted it if they say nothing at all after receiving it. Regarding the same, appropriate communication is required.

Revocation of Acceptance

According to Section 5, acceptance may also be withdrawn before the completion of the communication regarding the acceptor. There can be no withdrawal of approval beyond that point.

Example: On July 14, the acceptance has been fully communicated against A (the acceptor). Therefore, A may withdraw their acceptance up to that point, but not after. Thus, theoretically, A has the option to withdraw the acceptance between July 10 and July 14.

Communication of Offer and Acceptance

An offer and an acceptance must be made in writing for any contract to be enforceable. An offer cannot be accepted unless it is made known. Consequently, no legal relationship between the parties is compelled by an uncommunicated acceptance.

At what point does the communication end? To prevent misunderstandings between all parties, the offer must be communicated effectively and understood by everyone.

This is not an issue if the parties are speaking face-to-face. Real-time communication ensures that there is no misunderstandings as the offer and acceptance are made immediately.

Conclusion

As a result, an offer or acceptance may be withdrawn before the creation of a contract. Revocation of a proposal is possible before acceptance, and revocation of acceptance is possible before final communication. But to produce contemporary forms of communication, the ICA's requirements need to be changed in light of recent innovations like e-contracts and smart contracts.