Offer under the Indian Contract Act 1872: the first essential element of a valid contract.
## Core concept
An offer is a proposal made by one person to another with an intention to create a legal relationship, made so as to give the other person a power of acceptance by assent.
Key definition (Section 2(a), ICA 1872): > "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 an offer."
Essential characteristics of an offer: - Must be clear, definite and complete — capable of acceptance without further negotiation - Must show present intent to be bound (not merely invitation to treat) - Must be communicated to the offeree - Must be made with intention to create legal relations - Must contemplate a response (power of acceptance in offeree)
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## Offer vs. Invitation to treat
| Aspect | Offer | Invitation to treat | |--------|-------|-------------------| | Definition | Proposal to create binding contract | Mere invitation to negotiate / display of willingness | | Legal effect | Acceptance creates contract | No contract until offer made and accepted | | Examples | "I will sell my car for ₹5 lakhs" | Shop display, catalogue, auction without reserve, price list | | Offeree liability | Offeree can accept and bind offeror | Person making invitation not bound to accept |
Case principle: Display of goods in a shop window = invitation to treat, not offer (*Fisher v Bell*).
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## Formula / rule
When an offer becomes effective and when it lapses:
- Offer effective when: Communicated to the offeree (Section 3, ICA 1872)
- Offer lapses when:
- - Offeree rejects it expressly
- - Offeree makes counter-offer
- - Offeree fails to accept within time stipulated (or reasonable time if none stated)
- - Death or insanity of offeror (before acceptance)
- - Offeror revokes it (if revocation communicated before or at time of acceptance)
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## Common exam applications
Scenario 1: A shopkeeper displays items with price tags in the window. - Answer: This is an invitation to treat, not an offer. The customer makes the offer by taking goods to counter; shopkeeper accepts by charging the bill.
Scenario 2: X writes to Y: "I offer to sell my mobile for ₹20,000. Reply within 5 days." - Answer: This is an offer. It is clear, definite, and capable of acceptance. Y can accept within 5 days; after that it lapses.
Scenario 3: X says "I might sell my land for ₹10 lakhs" at a party. - Answer: Not a definite offer — lacks certainty and present intent to be bound. It is merely an expression of willingness to negotiate.
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## Common mistakes
- Mistaking invitation to treat for offer: Auction catalogues, price lists, and advertisement of goods are invitations to treat unless specifically stated otherwise.
- Confusing vague statements with offers: "Let me think about it" or "It might be possible" are not offers.
- Assuming silence = acceptance: Offeree's silence does not imply acceptance unless prior course of dealing suggests otherwise.
- Overlooking communication requirement: An offer not communicated to offeree cannot be accepted. (Section 4, ICA 1872)
- Ignoring counter-offer effect: A counter-offer destroys the original offer; the original offeror then becomes the offeree (Section 7, ICA 1872).
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Exam note: Always identify whether the statement contains a clear, definite proposal with intent to be bound and communicated to the other party. If any element is missing, it is not an offer.