Page 8 - DCOM404_CORPORATE_LEGAL_FRAMEWORK

Unit 1: Laws of Contract

Harvey v/s facey (1893) AC 553 X telegraphed to A” will you sell bumper hall pen? Telegraph Notes
lowest cash price answer paid
A replied by telegram” lowest price bumper hall pen $ 900” X telegraphed “we agree to buy $900
added by you”

It was held that it was a mere statements of the lowest price at which the vendor would sell it
contained no implied offer to sell. Hence no concluded contract between parties
Every offer must be communicated to the offeree

Example: Anna offer to sell her book to Begum. Anna is making an offer to do something,
i.e., to sell her a book. It is a positive act on the part of the offeror.

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. An offer made either to a definite person or a group of persons is a specific offer. The
specific offer can be accepted by that person to whom it has been made. Thus, if a real estate

company offers to sell a flat to Amar at a certain price, then it is only Amar who can accept it. The

offer made to the public at large is a general offer. A general offer may be accepted by any one by
complying with the terms of the offer. The celebrated case of Carlill v Carbolic Smoke Ball Co (1813)
1 Q.B.256 is an excellent example of a general offer.
Example: A Patent Medicine company advertised that it would give a reward of £100
to anyone who contacted influenza after using smoke balls of the company for a certain period

according to the printed directions. Mrs Carlill purchased the advertised smoke ball and contacted

influenza inspite of using the same according to the printed directions. She claimed the reward
of £100. The company resisted the claim on the ground that advertisement was only an invitation
to offer. They argued further that no offer was made to her, and that in any case she had not
communicated her acceptance assuming the advertisement was an offer. She filed a suit for the

recovery of the reward. Held that the advertisement in such type of cases amounted to general
offers. She could recover the reward as she had accepted the offer by complying with the terms
of the offer.
Implied Offer

An offer, implied from the conduct of the parties or from the circumstances of the case, is known

as implied offer. If the company proposes, over telephone, to sell the flat to Rajiv at a certain price
then this is an offer by an act (by oral words). This is an express offer.
Acceptance of an Offer

When the person to whom the offer is made signifies his assent thereto, the offer is said to be
accepted [s.2(b)]. Thus, acceptance is the act of giving consent to the proposal. The offeree is
deemed to have given his acceptance when he gives his assent to the proposal. The acceptance
of an offer may be express or implied. It is express when the acceptance has been signifi ed either
in writing or by words of mouth or by performance of some required act of the offeree. The

acceptance by performing the required act may be exemplified with reference to Carlill v. Carbolic
Smoke Ball Co. case (supra).
Rules regarding acceptance

1. An offer can be accepted only by the person to whom it is made
2. Acceptance should be unconditional and absolute

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