Page 16 - DMGT407Corporate and Business Laws

Unit 1: Laws of the Contract

2. Amin offers not to file a suit against Bedi, if the latter pays Amin the amount of Notes
` 10,000 outstanding. Here the act of Amin is a negative one i.e. he is offering to
abstain from filing a suit.
An offer is made with a view to obtaining the assent of the offeree to the proposed act or
abstinence. In Example (1) Anna is making an offer to sell a book with a view to obtaining the
assent of Begum. Similarly, in Example (2), Amin is making an offer to Bedi with a view to
obtaining Bedi’s assent thereto.

1.5.1 Modes of Making an Offer

1. 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 in spite 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.

Philosophy underlying general offers: The general offer creates for the offeror a liability in
favour of any person who happens to fulfil the conditions of the offer. It is not at all
necessary for the offeree to be known to the offeror at the time. When the offer is made; he
may be a stranger, but by complying with the conditions of the offer, he is deemed to have
accepted the offer.
2. Implied offer: An offer, implied from the conduct of the parties or from the circumstances
of the case, is known as implied offer.

Some examples of different types of offers:
(a) A real estate company proposes, by a letter, to sell a flat to Rajiv at a certain price.
This is an offer by an act by written words (i.e., letter). This is also known as an
express offer.
(b) 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.
(c) A company owns a fleet of motor boats for taking people from Mumbai to Goa. The
boats are in the waters at the Gateway of India. This is an offer by conduct to take
passengers from Mumbai to Goa. Even if the in charge of the boat does not speak or
call the passengers, the very fact that the motor boat is in the waters near Gateway
of India signifies company’s willingness to do an act with a view to obtaining the
assent of other(s) (i.e., would-be passengers). This is an example of an implied offer.

LOVELY PROFESSIONAL UNIVERSITY 9