Legal Agreements

Updated: Jan 22, 2021



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.