Understanding Offer under the Contract Act, 1872 (Bangladesh)

-

 Understanding Offer under the Contract Act, 1872 (Bangladesh)

In contract law, an offer is the crucial first step toward creating a legally binding agreement. The Contract Act, 1872 of Bangladesh governs how offers are made, accepted, and terminated, ensuring clarity in business and personal dealings.

This article provides a clear, comprehensive guide on the rules of offer, kinds of offer, and termination of offer under the Contract Act, helping students and practitioners understand this essential legal concept.

What Is an Offer?

An offer is a proposal made by one party (the offeror) to another (the offeree) expressing the willingness to enter into a contract on certain terms. The offer, when accepted, leads to the formation of a contract.



Essential Rules of an Offer

For an offer to be valid and legally binding, it must follow these rules:

  1. Clear and Certain: The terms of the offer must be clear, definite, and certain.
  2. Intention to Create Legal Relation: The offeror must intend to be legally bound by the offer.
  3. Communication: The offer must be communicated to the offeree.
  4. Distinguishable from Invitation to Offer: An offer must be distinguished from an invitation to negotiate or an invitation to treat.
  5. Capable of Acceptance: The offer must be capable of acceptance without modifications

Kinds of Offer under the Contract Act, 1872

Offers can be categorized in various ways:

1. Express Offer

Clearly communicated by words, either spoken or written.

Example: "I offer to sell you my bike for 40,000 taka."

2. Implied Offer

Inferred from conduct or circumstances.

Example: Taking goods to the cashier implies an offer to pay for them.

3. General Offer

Made to the public or any person who fulfills its conditions.

Example: Reward offers for lost property.

4. Specific Offer

Made to a specific person or group.

Example: Proposal to sell a house to a particular buyer.

5. Cross Offer

Two identical offers made independently and simultaneously without knowledge of the other. No contract arises as neither has accepted the other's offer.

6. Counter Offer

A reply to an offer with modified terms, which rejects the original offer and proposes a new one.

Example: "I will buy your car for 350,000 taka instead of 400,000."

7. Standing Offer

An offer that remains open for acceptance over a period and can be accepted at any time during that period.

Termination of Offer

An offer can end or be terminated in any of the following ways:

1. By Revocation

The offeror can withdraw the offer any time before acceptance, provided the revocation is communicated.

2. By Rejection

If the offeree rejects the offer, it is terminated.

3. By Counter Offer

A counter offer rejects the original offer, terminating it.

4. By Lapse of Time

If the offer is not accepted within the time specified or within a reasonable time, it lapses.

5. By Death or Insanity

If either party dies or becomes legally incapacitated before acceptance, the offer terminates.

6. By Failure of a Condition

If the offer depends on a condition that fails, the offer ends.

Summary Table

Aspect

Explanation

Example

Express Offer

Clearly stated offer

Oral or written proposal

Implied Offer

Inferred from actions

Picking goods in a store

General Offer

To public or anyone

Reward for lost dog

Specific Offer

To specific person(s)

Offer to sell house to one buyer

Cross Offer

Identical offers made simultaneously

Two people offering the same deal unknowingly

Counter Offer

Modified reply, rejects original

Offering different price

Standing Offer

Open for acceptance over time

Supplier’s ongoing price offer

Termination by Revocation

Offer withdrawn before acceptance

Informing offeree of withdrawal

Termination by Rejection

Offeree rejects offer

Saying “No” to offer

Termination by Lapse

Offer expires after time limit

No acceptance within specified time

Why Understanding Offer Is Important?

  • It determines when contracts begin.
  • It clarifies the rights and duties of parties.
  • It helps avoid disputes in negotiations.
  • It guides proper drafting and communication in contracts.

Conclusion

The offer is the foundation of any contract under the Contract Act, 1872. Knowing the rules of offer, its kinds, and how it can be terminated equips you to recognize when legally binding agreements arise or end. This knowledge is essential for anyone engaged in legal, business, or everyday transactions in Bangladesh.

Comments

Post a Comment

Popular posts from this blog

The Ecologically Critical Area (ECA)

-
Image
  The Ecologically Critical Area (ECA) The Ecologically Critical Area (ECA) is an environmentally protected zone where the ecosystem is considered to be endangered to reach a critical condition by the changes brought through various human activities. Section 2(gg) of the Bangladesh Environment Conservation (Amendment) Act (2010) provides that “Ecologically critical Area” means such area which is rich in unique biodiversity or due to the importance of environmental perspective necessary to protect or conserve from destructive activities. https://www.thedailystar.net/law-our-rights/conservation-ecas-1415971
Read more

Understanding Section 208 of The Contract Act, 1872.

-
Image
  The Contract Act, 1872 Understanding Section 208 When termination of agent’s authority takes effect as to agent, and as to third persons 208. The termination of the authority of an agent does not, so far as regards the agent, take effect before it becomes known to him, or, so far as regards third persons, before it becomes known to them. Illustrations (a) *** A directs B to sell goods for him, and agrees to give B five percent commission on the price fetched by the goods. A afterwards, by letter, revokes B’s authority. B, after the letter is sent, but before he receives it, sells the goods for 100 Taka. The sale is binding on A, and B is entitled to five Taka as his commission. (b) *** A, at Dhaka, by letter, directs B to sell from him some cotton lying in a warehouse in Rajshahi, and afterwards, by letter, revokes his authority to sell, and directs B to send the cotton to Dhaka. B, after receiving the second letter, enters into a contract with C, who knows of t...
Read more