Offer and Acceptance: Rules, Communication, Revocation and Case Scenarios Questions

Question 1

State any three rules of a valid acceptance.

Accepted Answer

Rules of valid acceptance (any three):

1) Must be absolute and unqualified.
2) Must be communicated to the offeror.
3) Must be given within time and in prescribed manner (if any).

Question 2

Define offer (proposal).

Accepted Answer

An offer (proposal) is an expression of willingness to do or not to do something with a view to obtaining the assent of another person.

Question 3

Define acceptance.

Accepted Answer

Acceptance is the expression of assent by the offeree to the offer; when accepted, the offer becomes a promise.

Question 4

What is invitation to offer?

Accepted Answer

Invitation to offer is an invitation to others to make an offer; it is not an offer itself.

Question 5

What is revocation?

Accepted Answer

Revocation means withdrawal of an offer or acceptance.

Question 6

What is counter-offer?

Accepted Answer

A counter-offer is a response that changes the terms of the original offer; it rejects the original offer and proposes new terms.

Question 7

State one rule of valid acceptance.

Accepted Answer

Acceptance must be absolute and unqualified.

Question 8

State any three essentials of a valid offer.

Accepted Answer

Essentials of a valid offer (any three):

1) Offer must be definite and certain.
2) Offer must be communicated to the offeree.
3) Offer must show intention to create legal relations and be lawful.

Question 9

Differentiate between offer and invitation to offer (any three points).

Accepted Answer

Offer vs invitation to offer:

| Basis | Offer | Invitation to offer |
|---|---|---|
| Meaning | definite proposal to be bound | invitation to make an offer |
| Result | acceptance creates contract | acceptance does not create contract |
| Example | reward offer to public | display of goods, price list |

Question 10

Explain revocation of offer and acceptance (brief, any three points).

Accepted Answer

Revocation means withdrawal.

1) Offer can be revoked any time before a valid acceptance becomes effective as per rules.
2) Acceptance can be revoked before it comes to knowledge of offeror (typical exam point).
3) Revocation must be communicated to be effective.

Question 11

Write any three situations when an offer lapses.

Accepted Answer

Offer lapses in these cases (any three):

1) Expiry of time for acceptance.
2) Revocation of offer.
3) Rejection/counter-offer by offeree.
(Also: death/insanity known to offeree.)

Question 12

Explain cross offer with example (any three points).

Accepted Answer

Cross offers are identical offers made by two parties to each other in ignorance of each other’s offer.

Example: A posts offer to sell car to B for ₹2 lakh; B posts offer to buy the same car for ₹2 lakh at the same time, without knowing A’s letter.

Cross offers do not amount to acceptance, so no contract is formed.

Question 13

Explain offer and its essentials. Write in exam style and include a table.

Accepted Answer

Offer (proposal) is an expression of willingness by one person to do or not to do something with a view to obtaining the assent of another person. Offer is the first step in forming a contract.

**Essentials of a valid offer:**

| Essential | Explanation |
|---|---|
| Definite and certain | terms must be clear and not vague |
| Intention to be bound | must show intention to create legal relations |
| Communication | must be brought to knowledge of offeree |
| Lawful | object must be lawful |
| Not a mere invitation | price list/display usually invitation, not offer |

Thus, only a lawful and clear offer communicated to the offeree can be accepted to form a contract.

Question 14

Explain acceptance and rules of valid acceptance. Use a table and examples.

Accepted Answer

Acceptance is the assent given by the offeree to the offer. When the offer is accepted, it becomes a promise and can result in a contract if other essentials are present.

**Rules of valid acceptance:**

| Rule | Meaning | Example |
|---|---|---|
| Absolute and unqualified | no change in terms | changing price becomes counter-offer |
| Must be communicated | silence is not acceptance | not replying generally is not acceptance |
| By the right person | only offeree can accept | stranger cannot accept specific offer |
| In prescribed manner & within time | follow required method and time | late acceptance invalid unless accepted by offeror |

Therefore, acceptance must match the offer completely and be properly communicated to create contractual obligation.

Question 15

Discuss communication and revocation of offer and acceptance with a flowchart and a short case scenario.

Accepted Answer

Communication is essential in offer and acceptance. An offer must be communicated to the offeree, and acceptance must be communicated to the offeror. Revocation means withdrawal and must also be communicated.

```mermaid
flowchart LR
  A[Offer made] --> B[Offer communicated]
  B --> C{Valid acceptance?}
  C -->|Yes| D[Acceptance communicated]
  C -->|No / counter-offer| E[No contract]
  B --> F[Offer revoked before valid acceptance?]
  F -->|Yes| E
  D --> G[Contract formed]
```

**Case:** A offers to sell a laptop to B for ₹30,000. Before B accepts, A informs B that the offer is withdrawn. After receiving the withdrawal, B says “I accept.” Here, acceptance after valid revocation is ineffective, so no contract is formed.

Thus, timing and communication of revocation and acceptance are crucial in contract formation.

Offer and Acceptance: Rules, Communication, Revocation and Case Scenarios

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