Friday, November 19, 2010

Initialization of a Contract Under Indian Contract Act


Proposal and its acceptance is the universally acknowledge process for the making of an agreement. The proposal is the starting point.
A proposal is a declaration by the proposer of his intention to be bound by an obligation if the offeree fulfill certain conditions. It means an offer is an expression of willingness to contract on certain terms, made with the intention that it shall become binding as soon as it is accepted by the person whom it is addressed.
In other word an offer is an intimation by word or conduct, of willingness to enter into a legally binding contract, and which in its terms expressly or impliedly indicates that is  to become binding on the offer or as soon as it has been accepted.
S.2(a) –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.
Analysis the Section 2(a) –
The first part of the definition of proposal lays emphasis upon the requirement that the willingness to make a proposal should be signified. To signify means to indicate or declare. in the traditional language of the law of contract, it means that the proposal should be communicated to other party. The process of making a proposal is completed by the act of communicating it to the other party.
For making proposal there must be offer and its acceptance. The person who makes the offer is called the proposer or offeror , and the other person to whom the proposal is made is called as offeree or propose or promise. Section 2(c) – the person making the proposal is called a promisor, and the person accepting the proposal is called the promise.

Constituent of Proposal
Following are the  requisites of a valid offer-
  1. Purposer or Offerer- proposer is the initiator of an agreement by way of proposal.  According to Section 2(a), proposer's has two purposes-
    1. I.            An expression of the offero's willingness to do or abstain from doing something.
    2. II.            Make a proposal to obtaining the assent of the offeree to the proposed act or abstinence.
    3. Intention- Intention is not defined in Indian Contract Act 1872. But the offer initiated with the intention of offeror. But Section 2(a) defines the similar word of intention which is Willingness. The proposal must be made with willingness to do business on the proposed terms and conditions. Willingness shows that intention to be bound by the proposal when accepted is an integral part of the concept of agreement. The party who offers must know the legal consequences of the offer. An offer or its acceptance should be made with the intention of creating legal relations. The test of intention is objective not subjective. The intentions of the parties is naturally to be known the terms of the agreement and the surrounding circumstances.
Intention is the primary requisite of a valid offer, which later turns into a agreement, and creates legal relations between the parties.
Balfour vs Balfour
Brief Fact-
W and H were husband and wife. H was employed in Shri Lanka. Both went to England for leave. There W became ill and was compelled to stay in England. After completion leave H was to go to Shri Lanka. Before going to Shri Lanka H promised to W to send 30 Ponds per month. Initial few months he do so but after that he stop sending the money. W went to court  for the probable expenseof maintenance.
Judgment- The court rejected the claim.
Principle- it is not the contract when two parties agree to take a walk together or where there is an offer and acceptance of hospitality. Second the parties was not intended that they shall be attended by legal consequences
  1. Legal consequences- an offer must be intended to create legal relations and must be capable of creating legal relations. Offer is the first step of the agreement. When an agreement is enforceable by law it becomes the contract. Offer is the starting point of a contract, it must be the capacity of legal binding.

  1. Assent of other party- The proposal must be made with a view to obtaining assent of the other party. Contract requires the consensus ad idem (consent at the same time).
  2. Term- the terms of the contract must be certain and defined. There should be no ambiguity in the terms and conditions of the offer.
  3. Offer must be address- An offer may be addressed either to an individual or to a group of persons, or to the world at large, and it may be made expressly or by conduct.
For example-
A offer to sell his house and gives an advertisement in the newspaper given the particular of the house, it is the general offer.

A offer to sell his house to B for Rs 5000/- this is the specific offer.

Carlill Vs Carbolic Smoke Ball Co
Brief Facts- Carbolic some ball co, offered by advertisement to pay £ 100 to any one who suffered by influenza after having used the ball according to printed direction. It was added that £ 1000 deposited in the Alliance Bank showing our sincerity in the matter.
The plaintiff used the smoke ball according to the direction but she nevertheless subsequently suffered from influenza. She was held liable to entailed for the amount.
But the co refused to give the amount to Carlill, by saying that-
  • There was no intention to enter into a legal relation as it was simply a puffing advertisement.
  • It was not made for one person in particular, and the plaintiff had not expressed his intention to accept it.
Judgment- it was the general offer, and the sanity of the contract was amount deposited in the bank.


  1. 7. Words or Conduct- An offer my be express by word of mouth or by writing, or it may even be made by conduct. An offer made by conduct called the implied offer. An offer which is expressed by word or spoken is called the express offer.

  1. Communication- offer must be communicated to the offeree

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Friday, November 19, 2010

Initialization of a Contract Under Indian Contract Act


Proposal and its acceptance is the universally acknowledge process for the making of an agreement. The proposal is the starting point.
A proposal is a declaration by the proposer of his intention to be bound by an obligation if the offeree fulfill certain conditions. It means an offer is an expression of willingness to contract on certain terms, made with the intention that it shall become binding as soon as it is accepted by the person whom it is addressed.
In other word an offer is an intimation by word or conduct, of willingness to enter into a legally binding contract, and which in its terms expressly or impliedly indicates that is  to become binding on the offer or as soon as it has been accepted.
S.2(a) –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.
Analysis the Section 2(a) –
The first part of the definition of proposal lays emphasis upon the requirement that the willingness to make a proposal should be signified. To signify means to indicate or declare. in the traditional language of the law of contract, it means that the proposal should be communicated to other party. The process of making a proposal is completed by the act of communicating it to the other party.
For making proposal there must be offer and its acceptance. The person who makes the offer is called the proposer or offeror , and the other person to whom the proposal is made is called as offeree or propose or promise. Section 2(c) – the person making the proposal is called a promisor, and the person accepting the proposal is called the promise.

Constituent of Proposal
Following are the  requisites of a valid offer-
  1. Purposer or Offerer- proposer is the initiator of an agreement by way of proposal.  According to Section 2(a), proposer's has two purposes-
    1. I.            An expression of the offero's willingness to do or abstain from doing something.
    2. II.            Make a proposal to obtaining the assent of the offeree to the proposed act or abstinence.
    3. Intention- Intention is not defined in Indian Contract Act 1872. But the offer initiated with the intention of offeror. But Section 2(a) defines the similar word of intention which is Willingness. The proposal must be made with willingness to do business on the proposed terms and conditions. Willingness shows that intention to be bound by the proposal when accepted is an integral part of the concept of agreement. The party who offers must know the legal consequences of the offer. An offer or its acceptance should be made with the intention of creating legal relations. The test of intention is objective not subjective. The intentions of the parties is naturally to be known the terms of the agreement and the surrounding circumstances.
Intention is the primary requisite of a valid offer, which later turns into a agreement, and creates legal relations between the parties.
Balfour vs Balfour
Brief Fact-
W and H were husband and wife. H was employed in Shri Lanka. Both went to England for leave. There W became ill and was compelled to stay in England. After completion leave H was to go to Shri Lanka. Before going to Shri Lanka H promised to W to send 30 Ponds per month. Initial few months he do so but after that he stop sending the money. W went to court  for the probable expenseof maintenance.
Judgment- The court rejected the claim.
Principle- it is not the contract when two parties agree to take a walk together or where there is an offer and acceptance of hospitality. Second the parties was not intended that they shall be attended by legal consequences
  1. Legal consequences- an offer must be intended to create legal relations and must be capable of creating legal relations. Offer is the first step of the agreement. When an agreement is enforceable by law it becomes the contract. Offer is the starting point of a contract, it must be the capacity of legal binding.

  1. Assent of other party- The proposal must be made with a view to obtaining assent of the other party. Contract requires the consensus ad idem (consent at the same time).
  2. Term- the terms of the contract must be certain and defined. There should be no ambiguity in the terms and conditions of the offer.
  3. Offer must be address- An offer may be addressed either to an individual or to a group of persons, or to the world at large, and it may be made expressly or by conduct.
For example-
A offer to sell his house and gives an advertisement in the newspaper given the particular of the house, it is the general offer.

A offer to sell his house to B for Rs 5000/- this is the specific offer.

Carlill Vs Carbolic Smoke Ball Co
Brief Facts- Carbolic some ball co, offered by advertisement to pay £ 100 to any one who suffered by influenza after having used the ball according to printed direction. It was added that £ 1000 deposited in the Alliance Bank showing our sincerity in the matter.
The plaintiff used the smoke ball according to the direction but she nevertheless subsequently suffered from influenza. She was held liable to entailed for the amount.
But the co refused to give the amount to Carlill, by saying that-
  • There was no intention to enter into a legal relation as it was simply a puffing advertisement.
  • It was not made for one person in particular, and the plaintiff had not expressed his intention to accept it.
Judgment- it was the general offer, and the sanity of the contract was amount deposited in the bank.


  1. 7. Words or Conduct- An offer my be express by word of mouth or by writing, or it may even be made by conduct. An offer made by conduct called the implied offer. An offer which is expressed by word or spoken is called the express offer.

  1. Communication- offer must be communicated to the offeree

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