Essential Elements of Proposal and Kinds of Offer

What is Proposal?

According to section 2(A) of the Contract Act, when any person signifies his willingness to another person to do or not to do anything with a view to obtain his assent (permission) on it, is said to make a proposal.

Offer is also known as proposal under the Indian Contract Act 1872.

Essential Elements of Proposal

1. There must be two parties.

2. The proposal must be certain.

3. The offer must be communicated.
Related Case: Lalman Shukla vs. Gauri Dutt

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4. There must be an intention to create a legal relationship.
Related Case: Balfour vs. Balfour

Note: ‘Communication’ means the content of offer must come into the knowledge of the person to whom the offer is made.

Note: There are some offers where there is no intention to create a legal relationship.
For example: Family matter, Religious matter, Political matter, etc.

Kinds of Offer

There are seven kinds of offer. They are:-

1. General Offer: It is an offer to the whole world.

2. Specific offer: It is an offer made to a particular person or group of persons.

3. Express offer: It is an offer that is made by words, either oral or in writing.

4. Implied offer: It is an offer that is made by the conduct or gesture of the parties.

5. Counter-offer: When a person to whom the offer is made does not accept the offer [as it is], he counters the condition. This is called a counter-offer.

6. Cross offer: When two offers of the same terms and conditions cross each other at the same time, it is called cross offer.

7. Standing offer: An offer is a standing offer if it is intended to remain open for a specified period.

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