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Unit 2: Offer and Acceptance

Acceptance of an offer “subject to a contract” or “Subject to a formal contract”, or ‘Subject Notes
to a contract to be approved by solicitors” – The significance of these words is that the

parties do not intend to be bound and are not bound until a formal contract is prepared
and signed by them. The acceptor may agree to all the terms of the offer and yet decline to
be bound until formal agreement is drawn up.
The acceptance of an offer cannot be implied from the silence of the offeree or his failure to
reply.
When one party abandons or refuses to perform the contract. Where there is a breach of
contract, the aggrieved party is entitled to claim reasonable compensation for what he has
done under the contract.
When a contract is divisible and the party, not in default, has enjoyed the benefit of the part

performance, the party in default may sue on quantum meruit.
When an indivisible contract is completely but badly performed. When an indivisible
contract for a lump sum is completely performed, but badly, the person who has performed
can claim the lump sum less deduction for bad work.

2.9 Keywords

Express offer: It means an offer made by words (whether written or oral). The written offer can be
made by letters, telegrams, telex messages, advertisements, etc. The oral offer can be made either
in person or over telephone.
Implied offer: It is an offer made by conduct. It is made by positive acts or signs so that the person
acting or making signs means to say or convey something. However, silence of a party can, in no
case, amounts to offer by conduct.
Offer by abstinence: An offer can also be made by a party by omission to do something. This
includes such conduct or forbearance on one’s part that the other person takes it as his willingness
or assent.
Specific and general offers: An offer can be made either to (i) A definite person or a group of

persons, or to (ii) the public at large.
2.10 Self Assessment

Fill in the blanks:
1. An offer, ........................ from the conduct of the parties or from the circumstances of the
case, is known as implied offer.

2. A ........................ by filling up a share application form, usually attached to the prospectus,
is making the offer.
3. ........................ is implied when it is said to be gathered from the surrounding circumstances
or the conduct of the parties.
4. The acceptor may agree to all the terms of the offer and yet ........................ to be bound until
formal agreement is drawn up.
5. The principle underlying a quasi contract is that no one shall be allowed unjustly to enrich
himself at the expense of another, and the ........................ based on a quasi-contract is
generally for money.

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