Page 24 - DMGT102_MERCANTILE_LAWS_I

Mercantile Laws-I

Notes insanity of the offeree before acceptance, (iii) An offer terminates when rejected by the offeror,
(iv) An offer terminates when revoked by the offeror before acceptance by the offeree, (v) An offer
terminates by not being accepted in the mode prescribed, or if no mode is prescribed, in some
usual and reasonable mode (or manner), (vi) A conditional offer terminates when the condition
is not accepted by the offeree, (vii) An offer terminates by counter-offer by the offeree.

Meaning of a Counter-offer

When in place of accepting the terms of an offer as they are, the offeree accepts the same subject
to certain conditions or qualifications, he is said to make a counter offer.

Example: An offer to sell rice was accepted by the offeree with an endorsement on the Sold
and Bought Notes that yellow and wet grain will not be accepted [Ali Shain v. Moothia Chetti, 2
Bom L R 556]. Held, there was no contract.

Special Terms in a Contract

Many times, there are certain special terms, which form part of the offer, but they are not duly
brought to the notice of the offeree (i.e., consumer or a customer or a client), at the time the offer
is made. If these special terms are not brought to the customer’s notice, then there is no valid
offer. In case the offer is accepted, and the contract is formed, the customer is not bound by
the special terms. The terms may be brought to the customer’s notice either (i) by drawing his

attention to them specifically or (ii) by inferring that a man of ordinary prudence could fi nd them
by exercising ordinary diligence.

The examples of the first case are where certain conditions are written on the back of a ticket for
a journey or deposit of luggage in a cloak room and the words, “For conditions see back” are
printed on the face of it. In such cases, the acceptor, i.e., the person buying the ticket is bound by
whatever conditions are written on the back of the ticket whether he has read them or not.
An example of the second case is where the conditions forming part of the offer are printed in a
language not understood by the offeree but his attention has been drawn to them in a reasonable
manner. In such a case, the law imposes an obligation upon the offeree to ask for the translation
of the conditions. If he fails to do so, it is presumed that he has constructive notice of these special
terms and he will be bound by them.

However, if the special conditions forming part of an offer are contained in a document which is
delivered after the contract is complete, then the customer is not bound by them. Such a document
is considered a non-contractual document as it is not supposed to contain the conditions of the
contract.

Task
Give examples related to counter-offer.

2.6 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).

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