Types of Offers

Meaning An offer is the starting point in the making of an agreement. An offer is also called `proposal’. According to Section 2(a) of The Indian Contract Act, 1872, “A person is said to have made the proposal when he 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.”
Essential Elements An offer involves the following essential elements:
(a)       It must be made by one person to another person. In other words, there can be no proposal by a person to himself.
Example: X says to Y that he wants to sell his car to himself for Rs. 1 lakh. There is no proposal because there can be no proposal by a person to himself.
(b)       It must bean expression of readiness or willingness to do (i.e. a positive act) or to abstain from doing something (i.e. a negative act).
Example I: X offers to sell his car to Y for Rs 1 lakh. It is a positive act on the part of X.
Example II: X offers not to file a suit against Y if Y pays X an outstanding amount of Rs. 1,00,000. It is a negative act on the part of X.
  •    TYPES OF OFFER
1.         Specific Offer
            A specific offer is one which is made to a definite person or particular group of persons. A specific offer can be accepted only by that definite person or that particular group of persons to whom it has been made.
            Example X offers to buy car from Y for Rs 1.0 lakh. This offer is a specific offer which has been made to a definite person Y No person other than Y can accept this offer

2.       General Offer 
This offer is one which is not made to a definite person, but to the world at large or public in general. A general offer can be accepted by any person by fulfilling the terms of the offer. In case of general offer, the contract is made with person who having the knowledge of the offer comes forward and acts according to the conditions of the offer.
Example  X advertiser! In the newspaper that he would pay Rs 5,000 to anyone who traces his missing boy. Y who knew about the reward traced that boy and sent a telegram to X that he had found his soil, It was held that X was entitled to receive the amount of reward. [Harbhajan Lal v. Harcharan Lal (AIR All 539)]

3.         Cross Offers
            Meaning Two offers which are similar in all respects made by two parties to each other, in ignorance of each other’s offer are known as `cross offers’.
            Effect Cross offers do not amount to acceptance of one’s offer by the other. Hence, no contract is entered into on cross offers.
            Example X of Agra sends a letter by post to Y of Delhi offering to sell his car for    Rs 1 lakh. The letter is posted on 1st January and the same day. Y of Delhi sends a letter by post to X of Agra offering to buy X’s car for Rs 1 lakh. These two letters cross each other. Y’s letter is merely an offer and not the acceptance of X’s letter. Here, both the parties are making offer and no party has accepted the offer Therefore, no contract has been entered into. If they want to enter into a contract, at least one of them must send his acceptance to the offer made by the other.
4.        STANDING OFFER/OPEN OFFER/CONTINUING OFFER
            Meaning An offer of a continuous nature is known as ‘standing offer’.
            Nature A standing offer is in the nature of a tender.
            Contract A contract is said to have been entered into only when an order is placed on the basis of the tender.
            Example X Ltd. requires a large quantity of certain goods during the 12 months period and gives an advertisement inviting tender in the leading newspaper Z submitted the tender to supply those goods at a specific rate. Z’s tender is accepted or approved. Now, Z’s tender becomes a standing offer. Each order given bY X Ltd. will be an acceptance of the offer.

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