Essential of a valid offer

1. It must be capable of creating legal relations: Offer must be such as in law is capable of being
   accepted and giving rise to legal relationship. If the offer does not intend to give rise to legal
   consequences and creating legal relations, it is not considered as a valid offer in the eye of law. A social
   invitation, even if it is accepted, does not create legal relations because it is not so intended.
2. It must be certain, definite and not vague: If the terms of an offer are vague or indefinite, its
   acceptance cannot create any contractual relationship. Thus, where A offers to sell B 100 quintals of oil,

there is nothing whatever to show what kind of oil was intended. The offer is not capable of being
accepted for want of certainty.

3. It must be communicated to the offeree: An offer, to be complete, must be communicated to the
   person to whom it is made, otherwise there can be no acceptance of it. Unless an offer is communicated,
   there can be no acceptance by it. An acceptance of an offer, in ignorance of the offer, is not acceptance
   and does not confer any right on the acceptor.
   This can be illustrated by the landmark case of Lalman Shukla v. GauriDutt
   Facts: G (Gauridutt) sent his servant L (Lalman) to trace his missing nephew. He then announced that
   anybody who traced his nephew would be entitled to a certain reward. L traced the boy in ignorance of
   this announcement. Subsequently when he came to know of the reward, he claimed it. Held, he was not
   entitled to the reward, as he did not know the offer.
4. It must be made with a view to obtaining the assent of the other party: Offer must be made with a
   view to obtaining the assent of the other party addressed and not merely with a view to disclosing the
   intention of making an offer.
5. It may be conditional: An offer can be made subject to any terms and conditions by the offeror.
   Example 39: Offeror may ask for payment by RTGS, NEFT etc. The offeree will have to accept all the
   terms of the offer otherwise the contract will be treated as invalid.
6. Offer should not contain a term the non-compliance of which would amount to acceptance: Thus,
   one cannot say that if acceptance is not communicated by a certain time the offer would be considered
   as accepted.
   Example 40: A proposes B to purchase his android mobile for `5000 and if no reply by him in a week,
   it would be assumed that B had accepted the proposal. This would not result into contract.
7. The offer may be either specific or general: Any offer can be made to either public at large or to the
   any specific person. (Already explained in the heading types of the offer)
8. The offer may be express or implied: An offer may be made either by words or by conduct.
   Example 41: A boy starts cleaning the car as it stops on the traffic signal without being asked to do so,
   in such circumstances any reasonable man could guess that he expects to be paid for this, here boy
   makes an implied offer.
9. Offer is Different from a mere statement of intention, an invitation to offer, a mere communication
   of information, Casual Equity, A prospectus and Advertisement.

Classification of Offer or Proposal

Classification of offer
An offer can be classified as general offer, special/specific offer, cross offer, counter offer, standing/ open/
continuing offer.

Now let us examine each one of them.
(a) General offer: It is an offer made to public at large and hence anyone can accept and do the desired
act (Carlill v. Carbolic Smoke Ball Co.). In terms of Section 8 of the Act, anyone performing the
conditions of the offer can be considered to have accepted the offer. Until the general offer is retracted
or withdrawn, it can be accepted by anyone at any time as it is a continuing offer.

(b) Special/specific offer: When the offer is made to a specific or an ascertained person, it is known as a
specific offer. Specific offer can be accepted only by that specified person to whom the offer has been
made. [Boulton v. Jones]
Example 36: ‘A’ offers to sell his car to ‘B’ at a certain cost. This is a specific offer.

(c) Cross offer: When two parties exchange identical offers in ignorance at the time of each other’s offer,
the offers are called cross offers. There is no binding contract in such a case because offer made by a
person cannot be construed as acceptance of the another’s offer.
Example 37: If A makes a proposal to B to sell his car for 2 lacs and B, without knowing the proposal of A, makes an offer to purchase the same car at 2 lacs from A, it is not an acceptance, as B was not
aware of proposal made by A. It is only cross proposal (cross offer). And when two persons make offer
to each other, it cannot be treated as mutual acceptance. There is no binding contract in such a case.

(d) Counter offer: When the offeree offers to qualified acceptance of the offer subject to modifications and variations in the terms of original offer, he is said to have made a counter offer. Counter-offer amounts to rejection of the original offer. It is also called as Conditional Acceptance.
Example 38: ‘A’ offers to sell his plot to ‘B’ for 10 lakhs. ’B’ agrees to buy it for 8 lakhs. It amounts to counter offer. It will result in the termination of the offer of ’A’. If later on ‘B’ agrees to buy the plot for 10 lakhs, ’A’ may refuse.

(e) Standing or continuing or open offer: An offer which is allowed to remain open for acceptance over a
period of time is known as standing or continuing or open offer. Tenders that are invited for supply of
goods is a kind of standing offer.

Meaning and Definition of Offer/Proposal Sec 2(a)

Definition of Offer/Proposal:
According to Section 2(a) of the Indian Contract Act, 1872, “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”.
Analysis of the above definition
Essentials of a proposal/offer are-

1. The person making the proposal or offer is called the ‘promisor’ or ‘offeror’: The person to whom
   the offer is made is called the ‘offeree’ and the person accepting the offer is called the ‘promisee’ or
   ‘acceptor’.
2. The person making the proposal or offer is called the ‘promisor’ or ‘offeror’: The person to whom
   the offer is made is called the ‘offeree’ and the person accepting the offer is called the ‘promisee’ or
   ‘acceptor’.

2. For a valid offer, the party making it must express his willingness ‘to do’ or ‘not to do’ something:
   There must be an expression of willingness to do or not to do some act by the offeror.
   Example 31: A willing to sell his good at certain price to B.
   Example 32: A is willing to not to dance in a competition if B pays him certain sum of money.
3. The willingness must be expressed with a view to obtain the assent of the other party to whom
   the offer is made.
   Example 33: Where ‘A’ tells ‘B’ that he desires to marry by the end of 2019, it does not constitute an
   offer of marriage by ‘A’ to ‘B’. Therefore, to constitute a valid offer expression of willingness must be
   made to obtain the assent (acceptance) of the other. Thus, if in the above example, ‘A’ further adds,
   ‘Will you marry me’, it will constitute an offer.
4. An offer can be positive as well as negative: Thus “doing” is a positive act and “not doing”, or
   “abstinence” is a negative act; nonetheless both these acts have the same effect in the eyes of law.
   Example 34: A offers to sell his car to B for ` 3 lacs is an act of doing. So in this case, A is making an
   offer to B.
   Example 35: When A ask B after his car meets with an accident with B’s scooter not to go to Court and
   he will pay the repair charges to B for the damage to B’s scooter; it is an act of not doing or abstinence.

Professionalism in Business

Professional workplace behavior is necessary for the long-term success of a business, whether it’s a big corporation or small business. Employee interactions and relationships with customers are of vital importance to ensure that company goals and objectives are met. A professional work place attitude and appearance allow employees to take pride in their work and improve worker performance.

Establishes Appropriate Boundaries

Professionalism in the work place establishes boundaries between what is considered appropriate office behavior and what is not. While most managers support an enjoyable and vibrant work environment, limits must be put in place to avoid conflicts and misunderstandings. Workers who conduct themselves professionally steer clear of crossing the line with their conversations and other interactions with co-workers, superiors and clients.

Encourages Personal Improvement

A business environment in which employees dress and operate professionally is more conducive for success. For example, professional dress codes are understood to support career development and personal growth in the work place. That’s because workers who dress and act professionally feel better about themselves and are encouraged to perform better for their clients.

Promote and Maintain Accountability

Companies that interact directly with clients are obligated to provide the best services possible and present their company in the best possible light. Professionalism counts when providing written information to clients. Professionally written company reports, business plans or other correspondence help businesses remain accountable with their level of service. The impression given in the paperwork submitted is important in enforcing the right impression about your business.

Establishes Respect for Authority, and Yourself

Professionalism in business establishes respect for authority figures, clients and co-workers. Maintaining a professional demeanor limits gossip and inappropriate personal conversations that could be considered disrespectful. Keeping a professional attitude with clients who behave inappropriately demonstrates the level of respect an employee has for the customer and the business partnership.

Boosts Respect ans Minimizes Conflict

Conflicts are less likely to arise in a professional business environment. Workers who respect each others’ boundaries and conduct themselves professionally rarely have disagreements that cannot be resolved efficiently. Professionalism in business also benefits diverse environments in which business people and their clients have several different perspectives and opinions. Professional behavior helps business people avoid offending members of different cultures

Importance of Professionalism

It is important to note that demonstrating professionalism is important at all levels in an organisation. Professionalism is not the responsibility of the leadership team but is vital at all levels. You can display professionalism in something as small as never forgetting an attachment to your emails, or writing without any grammatical errors, or in something as complex as performing a task with limited resources in the given time even when the delay was unavoidable.
Professionalism can become a part of your personality, (not keeping people waiting, being responsive etc..,) People with high levels of professionalism are most frequently considered for Job advancement.
Professionalism goes a long way in one’s personal career success as well as the success of the organisation.

Why professionalism is important at workplace

• Creates Boundaries – Workers who conduct themselves professionally avoid crossing their line with subordinates, superiors or clients
• Creates an Atmosphere of Improvement – A professional atmosphere is more conducive to success.
• The sense of Responsibility – In a professional atmosphere, an employee while handling a task, sees the larger purpose, and hence are able to own their actions and take appropriate decisions. One takes pride in performing the tasks assigned to them.  This adds to the overall image of not only the employee but also showcases the value by which the organisation stands.
• Mitigates Conflicts – businesses which promote a professional atmosphere also makes it easier to deal with diverse environments in which subordinates or even clients could have a difference of opinion however they can agree to disagree and come together on common grounds.
• Increased Job Satisfaction – Professionalism eliminates stress to a great degree and once that is taken care of an employee thrives in a healthy atmosphere leading to enhanced performance.
• Personal Growth – Not only in terms of job advancement, but there are a certain dignity and pride in one’s work that develops. You get appreciated for consistently good quality output and that in turn builds your confidence, makes you a more secure person who is then capable of handling difficult situations with refined emotional maturity.

Classification of contracts on the basis of the performance of the contract

On the basis of the performance of the contract

1. Executed Contract: The consideration in a given contract could be an act or forbearance. When
   the act is done or executed or the forbearance is brought on record, then the contract is an
   executed contract.

Example 27: When a grocer sells a sugar on cash payment it is an executed contract because
both the parties have done what they were to do under the contract.

2. Executory Contract: In an executory contract the consideration is reciprocal promise or
   obligation. Such consideration is to be performed in future only and therefore these contracts
   are described as executory contracts.
   Example 28: Where G agrees to take the tuition of H, a pre-engineering student, from the next
   month and H in consideration promises to pay G 1,000 per month, the contract is executory because it is yet to be carried out. Unilateral or Bilateral are kinds of Executory Contracts and are not separate kinds. (a) Unilateral Contract: Unilateral contract is a one sided contract in which one party has performed his duty or obligation and the other party’s obligation is outstanding. Example 29: M advertises payment of award of 5000 to any one who finds his
   missing boy and brings him. As soon as B traces the boy, there comes into existence
   an executed contract because B has performed his share of obligation and it remains
   for M to pay the amount of reward to B. This type of Executory contract is also called
   unilateral contract.
   (b) Bilateral Contract: A Bilateral contract is one where the obligation or promise is
   outstanding on the part of both the parties.
   Example 30: A promises to sell his plot to B for 1 lacs cash down, but B pays only 25,000 as earnest money and promises to pay the balance on next Sunday. On the
   other hand, A gives the possession of plot to B and promises to execute a sale deed
   on the receipt of the whole amount. The contract between the A and B is executory
   because there remains something to be done on both sides. Such Executory
   contracts are also known as Bilateral contracts.

Classification of contract on the basis of the formation

1. Express Contracts: A contract would be an express contract if the terms are expressed by
   words or in writing. Section 9 of the Act provides that if a proposal or acceptance of any promise
   is made in words, the promise is said to be express.
   Example 23: A tells B on telephone that he offers to sell his house for ` 2 lacs and B in reply
   informs A that he accepts the offer, this is an express contract.
2. Implied Contracts: Implied contracts in contrast come into existence by implication. Most often
   the implication is by action or conduct of parties or course of dealings between them. Section 9
   of the Act contemplates such implied contracts when it lays down that in so far as such proposal
   or acceptance is made otherwise than in words, the promise is said to be implied.
   Example 24: Where a coolie in uniform picks up the luggage of A to be carried out of the railway
   station without being asked by A and A allows him to do so, it is an implied contract and A must
   pay for the services of the coolie detailed by him.
   Example 25: A drinks a coffee in restaurant. There is an implied contract that he should pay
   for the price of coffee.
   Tacit Contracts: The word Tacit means silent. Tacit contracts are those that are inferred
   through the conduct of parties without any words spoken or written. A classic example of tacit
   contract would be when cash is withdrawn by a customer of a bank from the automatic teller
   machine [ATM]. Another example of tacit contract is where a contract is assumed to have been
   entered when a sale is given effect to at the fall of hammer in an auction sale. It is not a separate
   form of contract but falls within the scope of implied contracts.
3. Quasi-Contract: A quasi-contract is not an actual contract but it resembles a contract. It is
   created by law under certain circumstances. The law creates and enforces legal rights and
   obligations when no real contract exists. Such obligations are known as quasi-contracts. In other
   words, it is a contract in which there is no intention on part of either party to make a contract
   but law imposes a contract upon the parties.
   Example 26: Obligation of finder of lost goods to return them to the true owner or liability of
   person to whom money is paid under mistake to repay it back cannot be said to arise out of a
   contract even in its remotest sense, as there is neither offer and acceptance nor consent. These
   are said to be quasi-contracts.
4. E-Contracts: When a contract is entered into by two or more parties using electronics means,
   such as e-mails is known as e-commerce contracts. In electronic commerce, different
   parties/persons create networks which are linked to other networks through ED1 – Electronic
   Data Inter change. This helps in doing business transactions using electronic mode. These are
   known as EDI contracts or Cyber contracts or mouse click contracts.

Classification of contracts on the basis of validity

On the basis of the validity

1. Valid Contract: An agreement which is binding and enforceable is a valid contract. It contains
   all the essential elements of a valid contract.
   Example 17: A ask B if he wants to buy his bike for Rs.10,000. B agrees to buy bike. It is
   agreement which is enforceable by law. Hence, it is a valid contract.
2. Void Contract: Section 2 (j) states as follows: “A contract which ceases to be enforceable by
   law becomes void when it ceases to be enforceable”. Thus a void contract is one which cannot
   be enforced by a court of law.
   Example 18: Mr. X agrees to write a book with a publisher. Such contract is valid. But after few
   days, X dies in an accident. Here the contract becomes void due to the impossibility of performance of the contract. Thus, a valid contract when cannot be performed because of some uncalled happening becomes void. Example 19: A contracts with B (owner of the factory) for the supply of 10 tons of sugar, but before the supply is effected, the fire caught in the factory and everything was destroyed. Herethe contract becomes void. It may be added by way of clarification here that when a contract is void, it is not a contract at all but for the purpose of identifying it, it has to be called a [void] contract.

3. Voidable Contract: Section 2(i) defines that “an agreement which is enforceable by law at
   the option of one or more parties thereto, but not at the option of the other or others is a
   voidable contract”.
   This in fact means where one of the parties to the agreement is in a position or is legally entitled
   or authorized to avoid performing his part, then the agreement is treated and becomes voidable.
   Such a right might arise from the fact that the contract may have been brought about by one of
   the parties by coercion, undue influence, fraud or misrepresentation and hence the other party
   has a right to treat it as a voidable contract.
   Example 20: X promise to sell his scooter to Y for ` 1 Lac. However, the consent of X has been
   procured by Y at a gun point. X is an aggrieved party and the contract is voidable at his option
   but not on the option of Y. It means if X accepts the contract, the contract becomes a valid
   contract then Y has no option of rescinding the contract.
4. 4. Illegal Contract: It is a contract which the law forbids to be made. The court will not enforce such a contract but also the connected contracts. All illegal agreements are void but all void agreements are not necessarily illegal. Despite this, there is similarity between them is that in both cases they are void ab initio and cannot be enforced by law. Example 21: Contract that is immoral or opposed to public policy are illegal in nature. Similarly, if R agrees with S, to purchase brown sugar, it is an illegal agreement. According to Section 2(g) of the Indian Contract Act, “an agreement not enforceable by law is void”. The Act has specified various factors due to which an agreement may be considered as void agreement. One of these factors is unlawfulness of object and consideration of the contract i.e. illegality of the contract which makes it void.
5. Unenforceable Contract: Where a contract is good in substance but because of some technical defect i.e. absence in writing, barred by limitation etc. one or both the parties cannot sue upon it, it is described as an unenforceable contract. Example 22: A bought goods from B in 2015. But no payment was made till 2019. B cannot sue A for the payment in 2019 as it has crossed three years and barred by Limitation Act. A good debt becomes unenforceable after the period of three years as barred by Limitation Act.

Types of Contract

Now let us discuss various types of contracts.

Essentials of a Valid Contract

Two Parties: One cannot contract with himself. A contract involves at least two parties- one party making
the offer and the other party accepting it. A contract may be made by natural persons and by other
persons having legal existence e.g. companies, universities etc. It is necessary to remember that identity
of the parties be ascertainable.
Parties must intend to create legal obligations: There must be an intention on the part of the parties
to create legal relationship between them. Social or domestic type of agreements are not enforceable in
court of law and hence they do not result into contracts.

Other Formalities to be complied with in certain cases: A contract may be written or spoken. As to
legal effects, there is no difference between a written contract and contract made by word of mouth. But
in the interest of the parties the contract must be written. In case of certain contracts some other
formalities have to be complied with to make an agreement legally enforceable.

Certainty of meaning: The agreement must be certain and not vague or indefinite.

Possibility of performance of an agreement: The terms of agreement should be capable of
performance. An agreement to do an act impossible in itself cannot be enforced.

Offer and Acceptance or an agreement: An agreement is the first essential element of a valid contract.
According to Section 2(e) of the Indian Contract Act, 1872, “Every promise and every set of promises,
forming consideration for each other, is an agreement” and according to Section 2(b) “A proposal when
accepted, becomes a promise”. An agreement is an outcome of offer and acceptance.

Free Consent: Two or more persons are said to consent when they agree upon the same thing in the
same sense. This can also be understood as identity of minds in understanding the terms viz consensus
ad idem. Further such a consent must be free. Consent would be considered as free consent if it is not
caused by coercion, undue influence, fraud, misrepresentation or mistake.

Capacity of the parties: Capacity to contract means the legal ability of a person to enter into a valid
contract. Section 11 of the Indian Contract Act specifies that every person is competent to contract who
(a) is of the age of majority according to the law to which he is subject and
(b) is of sound mind and
(c) is not otherwise disqualified from contracting by any law to which he is subject.
A person competent to contract must fulfil all the above three qualifications.

Consideration: It is referred to as ‘quid pro quo’ i.e. ‘something in return’. A valuable consideration in
the sense of law may consist either in some right, interest, profit or benefit accruing to one party, or
some forbearance, detriment, loss or responsibility given, suffered or undertaken by the other.

Lawful Consideration and Object: The consideration and object of the agreement must be lawful.
Section 23 states that consideration or object is not lawful if it is prohibited by law, or it is such as would
defeat the provisions of law, if it is fraudulent or involves injury to the person or property of another or
court regards it as immoral or opposed to public policy.

Not expressly declared to be void: The agreement entered into must not be which the law declares to
be either illegal or void. An illegal agreement is an agreement expressly or impliedly prohibited by law.
A void agreement is one without any legal effects.