As it is
known under the English Law, formation of a contract is initiated, as and when
an offer or proposal is made.While going through the definition of the term
offer OR proposal, it could be read that, following are the essential elements
of an offer or a proposal;
Intention
to create legal relationship:Free volition or
intention to create a legal relationship is an essential element in the formation
of a contract. Without such an intention, no binding obligations can come
into being. In other words, we can say that, an offer must be capable of
creating legal relations.
Formation of
a contract is initiated as and when a proposal is made. All such proposals must
be certain, define and not vague. Thus it is very clear that, no contract will
be formed, if the terms and conditions of the offer is vague, and uncertain.
Communication
of the offer: In order to constitute a valid
contract, there shall be a valid offer and such an offer shall be properly
communicated to the other party, from whom the promisor seeking any favour. By
virtue of Section 4 of the Indian Contract Act, 1872 the communication of an
offer is completed, as and when it comes to the knowledge of the person to whom
it is made.
An offer must
be made with an intention of obtaining the assent of the other party to whom
the offer is made. Though an offer may be conditional, the same has to be
accepted subjected to the said conditions, only then such an
acceptance will constitute a valid contract.
However, it
may be noted that, an invitation to offer or an invitation to treat is
not an offer. For e.g. Notice for tenders, Notice inviting to participate in an
auction etc.
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