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roll

Submitted by Muhammad Yasir

Roll no 5
Bba section a

Submitted to sir Muhammad hashim

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QUESTION NO 2:-
Offer and acceptance are the essentials of a valid contract known as
agreement. Define both the terms in details by giving appropriate examples. How
an offer is considered complete and when and how it can be revoked?

ANSWER:-
Offer and acceptance:-
In order to form an agreement, there must be a lawful offer by one party
and lawful acceptance of that offer by other party. The term lawful means that
the offer and acceptance must satisfy the requirements of the Contract Act.
But offer and acceptance are two different things, so we will study
comprehensively below.

Offer:-

Section 2 (a) “when one person signifies to another his willingness to do or

to abstain from doing anything, with a view to obtaining the assent of that
other to such act or abstinence, he is said to make a proposal“.
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Its means that when a person shows his willingness to do or not to do

something to obtain the consent of other person, it is considered a proposal.
The person making the offer is called the offeror or promisor. The person to
whom the offer is made is called the offeree.

In another words,
An offer is a promise to do or not to do something in sufficiently clear terms
that may be accepted by another. An offer should be distinguished from an
invitation to treat and a mere expression of intention to do or not to do some act.
Offers do not necessarily need to be made to one person – that may be made to
the world at large or to specific groups of people. The significance of an offer is
that when it is accepted, the contract is formed.

Example:-
A retailer might offer a men's watch for $2,000, meaning that the retailer
will sell the watch for that amount. However, a customer might come into the
store and offer $1,500 for the watch, meaning that the customer is expressing an
interest in buying the watch for that amount.

Acceptance:-

Section 2(b) when the person to whom the proposal is made signifies his
assent thereto, the proposal is said to be accepted. A proposal, when accepted
becomes a promise.
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In a detail words,
The acceptance of the offerors terms must be unconditional. In many cases
this may constitute a ‘yes’ or ‘no’ reply to an offer made. There are situations
where such a simple exercise may not be possible and it requires the courts to
give direction as to how acceptance may be established. An offer may be
accepted by conduct; silence, however, can never constitute acceptance.

Example:-
A offer to sell his car to 5 lacs to B so it’s totally depend on B because if they want
this car so he say yes and when B accepts the A offer it is called Acceptance.

How an offer is considered complete and when and how it can be revoked?
In order to create a valid contract, one party must make an offer, another
party must accept the offer, and consideration must be exchanged.
If the terms of an offer are not definite and clear, it cannot be called a valid offer.
The offer must be definite and reasonable enough for the receiving party to
believe that it is indeed an offer.

Essential of valid offer:-

In order for an offer to be considered valid, it must meet the following
requirements:
 Must be communicated
 All offers must identify the price, the subject matter, and the quantity.
 Must be made with the purpose of obtaining the assent of the other party
 Must be capable of establishing legal relation, definite and clear,
communication with offeree meaning that consideration must be a two-
way process
 Must contain language that is certain and no element of uncertainty
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In addition, an offer may be express or implied. An express offer is made in the

presence of conversation, while an implied offer is communicated in the absence
of conversation. In a situation where the offerer says that silence means consent,
the offer is considered invalid. Acceptance of an offer must be communicated.

Example:-
In most states the essential terms for the sale of real estate lots would include:
identity of the specific lot, price, full terms for payment, and date for delivery of
possession, and date for delivery of the deed. If any of the terms were missing
then it is not a valid offer.

Revocation of offer:-
Revocation means cancellation. Revocation of an offer means its
withdrawal by the offeror.
An offer may be revoked at any time before offeree accepts it.

Failure to fulfill condition:-

If an offer contains some conditions and the offeree fails to fulfill these
conditions, the offer terminates.

Revocation of offer by offeree:-

If the offeree rejects the offer and communicate the rejection to the offeror, the
offer terminates even though the period for acceptance of offer has not yet
expired.

Prescribed manners:-
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If the offeror prescribes the manners of acceptance, the offer terminates if the
offeree does not accept according to the prescribed manner. If the offeror wants
to reject the offer, he must inform the offeree within a reasonable time. If offeror
does not inform, he will be bound by such acceptance.

TIME STATED IN THE OFFER

When making the offer, the offeror may state how and when the offer must be
accepted.

REASONABLE LENGTH OF TIME

When nothing is said in the offer about the length of its life, it is alive for a
reasonable length of time.
Reasonable length of time depends upon all the surrounding circumstances.
Examples:
Perishable produce like strawberries must be sold quickly, but selling a truck
would take a longer time period
To avoid misunderstandings, it is best to specify when the offer should be
accepted by.
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QUESTION NO 1:-
“A contract is an agreement; an agreement is a promise and a promise is an
accepted proposal.” Analyze this statement in the light of definitions given by
various experts in the field. Also, identify and explain the various elements and
types of contracts.

ANSWER:-
“A contract is an agreement; an agreement is a promise and a promise is an
accepted proposal.”

DEFINITION OF CONTRACT:-

Some definition of different authors are as fellow:

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Pollack: "Every agreement and promise enforceable at law is a contract."

Salmond: "A contract is an agreement creating and defining obligations between
the parties',
Sir William Anson: "An agreement enforceable by law made between two or more
persons, by which rights are acquired by one or more to acts or forbearance on
the pan together or others".

Explanation
Contract is like a promise between people. It is an understanding, a deal between
two or more people or organizations to do certain things. Each person or
organization who agrees to do something in a contract is called a party.
An agreement, or a contract, says what you and the other person or organization
have agreed to do. It is a written list of the promises you have made. The best
form of contract is written on paper and signed by each party.

Elements of contract:-
Contract consists of two elements:-
1:- Agreement
2:- Enforceability

AGREEMENT:-

Section 2(e) defines agreement as, “every promise and every set of
promises, forming the consideration for each other, is an agreement”.
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Section 2(b) defines promise as, “when the person to whom the proposal is
made signifies his assent thereto, the proposal is said to be accepted. A proposal,
when accepted, become a promise”.
A promise comes into existence when one party makes a proposal to the
other party and that other party gives consent. Therefore, a contract is an
agreement, an agreement is a promise and a promise is an accepted proposal.
Example:-
A offers to sell his car to B for 8 lac. B gives acceptance. It is an agreement.

ENFORCEABILITY:-
An agreement is enforceable by law if it is recognize by the court. In order
to be enforceable by law, the agreement must create legal obligations between
the parties. Thus, the term agreement is wider than a contract. All contract are
agreements but all agreements are not contracts. Agreements are of two types;
a) SOCIAL AGREEMENT:-
Social agreements are not enforceable by law because they do not create
legal obligations between the parties. In social agreements, the parties do not
intend to create legal relations.

b) LEGAL AGREEMENT:-
Legal agreements are enforceable by law because they create legal
obligations between the parties. In legal agreements, the parties intend to
create legal relations. All business agreements are contracts as there is an
intention to create legal obligations.

Kinds of contract:-
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According to enforceability:
According to enforceability, a contract can be divided as under:

a) Valid contract:
A valid contract is enforceable by law. An agreement becomes enforceable
by law when all the essentials of a valid contract are present.

b) Void Contact:
The word void means not binding in law. “A contract which ceases to be
enforceable by law becomes void, when it ceases to be enforceable.” It
means that a void contract is not void from the beginning. It is valid
contract when it is made but subsequently it becomes void due to certain
reasons.

c) Void agreement:
An agreement not enforceable by law is said to be void. The void
agreement does not create legal obligations among the parties. An
agreement which is void from the beginning is void ab-into. In void
agreement, there is absence of one or more essentials of valid contract
except free consent. Agreement with minor and agreement without
consideration are void from the beginning.

d) Voidable contract:
A contract is voidable when consent of one of the parties is not free. It is a
valid contract until it is avoided by the party having the right to avoid it. If
the party decides to confirm it, it remains valid. A contract becomes
voidable under the following circumstances:
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A contract becomes voidable when the consent of one or more of the

parties to a contract is obtained by coercion, undue influence,
misrepresentation or fraud.

e) Unenforceable contract:
An unenforceable contract is that contract which cannot be enforced in
court of law because of some technical defects such as absence of writing,
registration, requisite stamp etc. when these defects are removed, the
contract can be enforced.

f) Illegal agreement:
An agreement is illegal when its performance is forbidden by any law. Such
an agreement can never become a contract. An agreement is illegal and
void if it is forbidden by law or is of such a nature that if permitted, it would
defeat the provisions of any law or is fraudulent or involves injury to the
person or property of another or the court regards it as immoral or
opposed to public policy.

ACCORDING TO FORMATION:-
According to formation, a contract has the following three kinds;
On this base Contracts can be classified into three groups, namely Express,
Implied, Quasi Contracts.
Express Contracts:-
The Contracts where there is expression or conversation are called Express
Contracts. For example: A has offered to sell his house and B has given
acceptance. It is Express Contract.
Implied Contract:-
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The Contracts where there is no expression are called implied contracts.

Sitting in a Bus can be taken as example to implied contract between passenger
and owner of the bus.
Quasi Contract:-
In case of Quasi Contract there will be no offer and acceptance so, actually
there will be no Contractual relations between the partners. Such a Contract
which is created by Virtue of law is called Quasi Contract. Sections 68 to 72 of
Contract Act read about the situations where court can create Quasi Contract.

Sec. 68: When necessaries are supplied

Sec. 69: When expenses of one person are paid by another person.
Sec. 70: When one party is benefited by the activity of another party
Sec. 71: In case of finder of lost tools.
Sec. 72: When payment is made by mistake or goods are delivered by mistake.
Example:-
A case on this occasion is Chowal Vs Cooper. In this case A`s husband becomes no
more. She is very poor and therefore not capable of meeting even cost of
cremation. B, one of her relatives, understands her position and spends his own
money for cremation. It is done so without A`s request. Afterwards B claims his
amount from A where A refuses to pay. Here court applies Sec. 68 and creates a
Quasi Contract between them.

According to performance:
According to performance a contract is of the following two kinds.
a) Executed contract.
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A contract is said to be executed when both the parties have completely

performed their obligations.it means that nothing remains to be done by either
party under the contract.
Examples:
A buys a book from B. A deliver thee book and B pays the price. It is an
executed contract.
A agrees to paint a picture for B of Rs 2000. When A paints the picture and
b pays the price, so the contract is said to be executed.

b) Executory contract:
In an executory contract something remains to be done. In another words a
contract is said to be executory when both the parties to a contract have yet to
perform their obligations.
Examples:
M sell his car to L for Rs 2.5 Lac. N has not yet paid the price and M has not
yet deliver the car. The contract is between N and M is executory.
A agree to teach B, in May and B promises to pay Rs 800 to A. It is an
executory contract because the promises are yet to be performed.

According to parties:
According to parties a contract may be of the following two kinds.
A. Unilateral Contract:
In unilateral contract only one party makes a commitment. In other words,
it is a contract where only one party is bound but the other party has been
chooses to be bounded it.
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Example:
A promises pay Rs 1000 to anyone who finds his lost bag. B finds the bag
and return it to the A. It is a unilateral contract which come into existence when
the bag is found.
B. Bilateral Contract:
It is a contract where both parties are bound by it, as soon is the contract is
made. In other words, it is a contract in which both the parties have yet to be
performed their obligations.
Example:
A promises to paint a picture for B and B promises to A pays 5000.