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October 21, 2016

Offer & Acceptance in Business Law | Definition & Essentials


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. – Section 2(a) Contract Act


Offeror: Person making an offer

Offeree: Person to whom the offer is made

Essentials of Valid Offer

  • It may be express or implied
  • It must create legal relations
  • It must be definite and clear
  • It is different from invitation to offer
  • It may be specific or general
  • It must be communicate to offeree
  • It should not contain negative condition
  • It may be subject to any terms and conditions
  • It must not contain cross offers

Revocation or Termination of Offer

  • Notice of revocation
  • Lapse of time
  • Failure to fulfill condition
  • Revocation of offer by offeree
  • Counter offer by offeree
  • Death or insanity of the Offeror or offeree
  • Subsequent illegality
  • Destruction of subject matter


When the person to whom the proposal is made signifies his assent thereto, the proposal is said to be accepted. A proposal when accepted becomes the promise. – section 2(b) Contract Act

Essentials of Acceptance

  • It must be given by the offeree
  • It must be absolute and unconditional
  • It must be in a prescribed manner
  • It must be communicated to the offeror
  • It may be express or implied
  • It must follow the offer
  • It must be given within reasonable time

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