Offer and acceptance form the cornerstone of contract formation under the Indian Contract Act, 1872. For law students and aspiring independent legal practitioners, a clear understanding of these concepts is essential, as every enforceable contract begins with a lawful offer followed by a valid acceptance. While drafting contracts, ambiguity in offer or acceptance often becomes the primary reason for disputes and litigation. Indian courts have repeatedly emphasized that without a clear meeting of minds, no contract can come into existence. This article examines the legal principles governing offer and acceptance, the rules relating to their communication, and landmark judicial interpretations under Indian law.

The Indian Contract Act provides statutory definitions of offer and acceptance. Section 2(a) defines a proposal, commonly referred to as an offer, as when one person signifies to another his willingness to do or abstain from doing something, with a view to obtaining the assent of that other person. Section 2(b) defines acceptance as when the person to whom the proposal is made signifies his assent thereto. Upon acceptance, the proposal becomes a promise. These provisions highlight that both offer and acceptance must be communicated and must result in mutual assent.

A valid offer must satisfy certain essential requirements. Firstly, the offer must be made with the intention to create legal relations. Mere statements of intention, invitations, or expressions of willingness do not amount to an offer. In Harvey v. Facey, the court held that a statement of the lowest price was not an offer but merely an invitation to negotiate. This principle is relevant in drafting commercial contracts where preliminary communications are exchanged.

Secondly, an offer must be definite and certain. Vague or ambiguous offers cannot be accepted. Section 29 of the Indian Contract Act declares agreements void for uncertainty. While drafting contracts, the terms of the offer, including subject matter, consideration, and obligations, must be clearly specified to ensure enforceability.

Thirdly, the offer must be communicated to the offeree. An offer made to the world at large, such as a public advertisement, is recognized under Indian law as a general offer. In the landmark case of Carlill v. Carbolic Smoke Ball Co., the court held that a general offer can be accepted by anyone who performs the conditions of the offer. Indian courts have consistently followed this principle. This concept is particularly relevant in reward schemes, tenders, and public offers.

It is also important to distinguish between an offer and an invitation to offer. Invitations to offer, such as advertisements, catalogues, price lists, or tenders, merely invite proposals from others. Acceptance of an invitation to offer does not create a contract. This distinction is crucial in drafting tender documents and commercial negotiations to avoid unintended contractual obligations.

An offer may be expressed or implied. An express offer is made by words spoken or written, while an implied offer arises from conduct or circumstances. In Upton Rural District Council v. Powell, an implied offer was recognized based on the conduct of the parties. While drafting contracts, express offers are preferred as they provide clarity and reduce reliance on implied terms.

The communication of offer and acceptance is governed by Sections 3 and 4 of the Indian Contract Act. Section 3 provides that communication of proposals and acceptances is made by any act or omission intended to communicate such proposal or acceptance. Section 4 explains when communication is complete. Communication of an offer is complete when it comes to the knowledge of the person to whom it is made. Communication of acceptance is complete as against the proposer when it is put in a course of transmission to him so as to be out of the power of the acceptor, and as against the acceptor when it comes to the knowledge of the proposer.

The rule laid down in Section 4 gives statutory recognition to the postal rule of acceptance. In Bhagwandas Goverdhandas Kedia v. Girdharilal Parshottamdas, the Supreme Court clarified that in cases of instantaneous communication, such as telephone or electronic communication, acceptance is complete when it is received by the proposer. This distinction is highly relevant in modern contract drafting involving emails and digital communications.

Acceptance must be absolute and unqualified. Section 7 of the Indian Contract Act mandates that acceptance must be unconditional and in accordance with the manner prescribed by the proposer. Any variation or conditional acceptance amounts to a counter-offer, which extinguishes the original offer. In Hyde v. Wrench, the court held that a counter-offer destroys the original offer. This principle has been followed by Indian courts and is critical in negotiations involving revised terms.

Acceptance must be communicated. Mere mental acceptance is not sufficient. In Felthouse v. Bindley, it was held that silence does not amount to acceptance. While drafting contracts, clauses that attempt to impose acceptance by silence are generally unenforceable under Indian law.

Acceptance must be made within a reasonable time if no time limit is specified. An offer lapses if not accepted within the prescribed or reasonable time. It may also lapse due to revocation, rejection, death or insanity of the proposer or acceptor, or failure of a condition precedent. Section 6 of the Indian Contract Act enumerates the modes of revocation of an offer. A clear understanding of these provisions helps lawyers draft termination and revocation clauses effectively.

Revocation of an offer or acceptance must be communicated before it becomes complete. Section 5 permits revocation of a proposal at any time before the communication of its acceptance is complete as against the proposer. This section is particularly relevant in commercial transactions involving multiple communications and negotiations.

In conclusion, offer and acceptance under the Indian Contract Act, 1872 constitute the legal foundation of every enforceable contract. For law students and aspiring independent practitioners, mastery over these principles is essential for effective contract drafting and advisory practice. Clear drafting of offer terms, precise acceptance mechanisms, and compliance with statutory rules on communication prevent ambiguity and litigation. Judicial interpretations further refine these principles and guide their practical application. A strong understanding of offer and acceptance not only ensures the validity of contracts but also enhances professional competence and credibility in independent legal practice in India.