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Legal Agreements

Updated: Jun 8, 2023

Written by: Sejal Kaul



In our daily lives, contracts play a significant role, ranging from insurance policies to employment contracts. In fact, while purchasing a movie ticket or downloading an app, we enter into contracts even without thinking, for example. Oral or written agreements between two or more parties are part of the contract. Contracting parties could include individuals, businesses, non-profits or government agencies. The entire process of entering into a contract begins with an offer by one party, an acceptance by another party and an exchange of considerations (something of value). Let us take a look at the bid and acceptance part.

Proposal and offer:

With the proposal or offer made by one party to another, the whole process of entering into a contract begins. To enter into an arrangement, the plan has to be approved.

"According to Section 2(a) of the Indian Contract Act 1872, the proposal is defined as "when a person indicates to another person his willingness to do or not do anything (abstain) in order to obtain that person's consent to such an act or abstinence, a proposal or an offer is said to be made.

Features of a valid offer:

The bid/proposal person is referred to as the "promiser" or the "offeror." And the person accepting an offer is referred to as the "promiser" or the "acceptor." The provider must demonstrate his willingness to do an act or refrain from doing it. Willingness alone is not sufficient. Or simply a desire to do anything or not to do something is not going to be a bid.

An offer can be positive or negative either. It can be a promise to do any act, and a promise to abstain from any act/service can also be a promise. Both are deals that are real.

The feature of an offer that is legitimate:

Here are a few basics that make the bid legitimate

Two parties must be present.

An individual presenting the suggestion and the other person committing to it must have at least two members. Both individuals are considered, i.e., both legal and artificial individuals.

It is important to communicate all suggestions

The correspondence of the suggested plan is compulsory. When it is communicated to

the offeree, a bid is legitimate. The relationship may be either overt or implicit.

Words such as word of mouth, messenger, telegram, etc. will express it. Section 4 of the Indian Contract Act says that when it comes to the knowledge of the person to whom it is made,

the correspondence of a proposal is complete.


'A' offers, at a certain amount, to sell a car to 'B. 'Once 'B' receives the letter, the

correspondence of the plan is final.

Legal ties must be defined.

An offer must be such that it can lead to a binding deal until approved. A simple social invitation should not be considered as a bid, and it would not give rise to any legal relationship if such an invitation is accepted.


'A' invited 'B' to dinner and the invitation was approved by 'B'. It is a mere invitation to society.

And if he fails to supply B with dinner, 'A' would not be accountable.

It must be definitive and certain.

In order to establish a legal deal, the terms of the offer must be certain and explicit and must not be vague.

It could be particular or general,

The unique offer is an offer approved by some particular or particular party or by any group to whom it is made. Whereas, every person accepts the general offerings.

Deal Classification

The architecture, pacing, intent, etc. may be dependent on certain types of offers. Let us look at

the classification of the bid.

Give Express

An offer can be made, spoken or written, using express language. This is referred to

as the Express bid.


If 'A' says to 'B,' "will you buy Rs 2,00,000 for my car"? Implied Bid Implied An bid can be extracted from the acts or circumstances of the parties.

This is regarded as the bid Inferred.


There is a tacit bid by the transport operator to bring passengers at a specific fare when a transport carrier runs a bus on a specific route.

Deal General

No stated group is making a general bid. It is one that is made for the general population. Therefore, every member of the public can approve the offer and have the right to receive/consider the rewards.


In the newspaper, 'A' advertises that whoever discovers his lost son will be awarded 2 lakh.

'B' reads it, and he calls 'A' after locating the boy, to tell him about his missing son. 'A' is now allowed to pay 'B' 2 lakh for his reward.

Similar Deal

It is the deal offered to a single individual or group of individuals which should be received by the same person, not by someone else.


'A' proposes to sell 'B' his home. A special bid is then offered to a single person, and only 'B' can consider the offer.

Difference between the particular bid and the general offer:

Deal General

Similar Deal

The General Deal is made for the world as a whole.

To any single entity, a particular offer is made.

Anyone may accept a general bid.

Only a single entity may consider a particular bid.

Give Cross

In some cases, two parties make a cross-offer. This means that they both give one another at the same moment. However, the cross-offer does not mean that it supports the deal in any case.


Both 'A' and 'B' send letters to sell and purchase B's house respectively. This is the cross bid made

by one side to consider another's offer.


The response to the original bid is a counter-offer. A counter-offer means that a different bid was declined and substituted. The counter bid gives the original offerer three choices: accept, reject or make a new deal.

Lapses of a bid and cancellation

An offer is postponed after a certain or fair amount of time. An offer is not approved in the mode specified, A refusal of an invitation lapses.

A bid is postponed until approval by the offeror or death of the offeror or insanity.

A bid is invalid until approval through revocation.

A bid lapses because the subject is eventually illegalized or destructed.

When contact is over

Give correspondence (section 4)

When it comes to the understanding of the person he or she is made to, the deal is complete.

Time to withdraw a bid

Waiver of the bid (Section 4)

A resolution may be revoked at any point before the notice is complete but not subsequently against the proponent.

Waiver by the seller of the bid

Before the bidder is approved, the offeror can withdraw its proposal (revoke) at an auction before it is accepted by an auctioneer using any of the customary methods.


'A' has decided on selling the property to 'B' in writing, saying 'this bid will stay on the ground until 9 AM on Saturday.' 'A' reached a purchase deal with 'C' on Thursday. 'B' heard from 'X' and he sent 'A'

approval of his bid on Friday, 7 AM. Since he learned that A's bid was withdrawn by the sales

of the property to C, Keeping 'B' did not consider it.

Case study

Carlill v. Carbolic Smoke Balls Corporation

Can public offers, in general, be open?

Will a general bid lead to an agreement? In this case, a corporation has made carbolic balls, advertising their product, saying that nobody who takes smoke balls in the manner recommended (i.e., three times every day for two weeks) can catch the flu. When anyone did, the company agreed to pay them £100 right away. The organisation deposited £ 1000 in a public bank to demonstrate its honesty in regards to this bid. Now, the defendant, Carlill ordered the smoke balls and used them in ads, but he eventually contracted influenza. It filed a suit in the ads for the restitution of £100. The corporation declined payment because the claimant did not have a deal between them. A deal between the complainant and the firm was signed as soon as the complainant purchased the smoke balls and used them according to prescription.

Harvey v. Facey

Will a bid be treated as a mere price quotation?

In this case, Harvey, the plaintiff, contacted the defendant, Facey, on telegram about Hall Pen asking, "You are going to sell us Bumper Hall Pen? The lowest cash response payable by telegraph." Facey replied the same day at £900 for the Pen price. The appellant answered: “We are in agreement to purchase the sum of 900 pounds the Bumper Hall Pen has been ordered by you. The defendant declined to sell at the price they first quoted. Please send us your title deed so we can early be issued." The appellants asked for the Hall Pen price and the defendant cited the price because the telegram transaction was simply an exchange of information. It was eventually found in this case that no contract was entered into by both parties. The appellant was also not entitled to appeal.

Balfour v. Balfour, not Bond

Will a married pledge proceed to a legally binding agreement?

Mr. and Mrs Balfour went to England on holiday, who used to live in Sri Lanka as a married couple.

Ms. Balfour developed rheumatic arthritis during that period. According to her, Sri Lanka's environment would deteriorate its health, and Ms Balfour was urged to return to England. He vowed to give her £30 per month before Mr Balfour returned to Sri Lanka. The parties fell apart and split during their stay abroad. In this context, it was held that the agreement made by Mr. Balfour to pay a monthly amount of £30 was not a contract since no formal relationship between one party and another was expected.


The request for a contract is the very first step. The person making the proposal is called the supporter, and the person making the proposal is called the promisee. the proponent. For the offerer's suggestion Offeree has fair options to say "Yes" and "No." The idea is conveyed in relation to the promisee's awareness.


1. Case studies taken from book contract and specific relief Avtar Singh

2. Indian Contract Act, 1872

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