Are all contracts, irrespective of the country, entered expressly or impliedly? If all contracts are always express, then what is it termed if we (as normal customers/buyers) go to the nearby grocery shop to buy rice or wheat or any product whatsoever? Aren’t they contracts at all? When a contract, whether expressed or implied, starts? What amounts to offer and acceptance? These are the few important questions that a law student or a lawyer would most probably ponder upon when a contract case comes up before them. This article will deliberate the same questions and would also scrutinize the laws and cases that discuss these points to answer the same.

Concept of Contract:

Let us look into the evolution of the concept ‘Contract’. It all started with the commercial developments that took place through different forms such as the Trade of products through shipping. Contract law, like banking and insurance laws, was brought into force to regulate those trade-related agreements and promises. It enables the parties of the contract to act according to the situations and as per the agreement. If one fails to achieve what he had agreed earlier, will be in a position to pay the compensation as per law. These all form part of contract law.

Further, the American Law Institute’s definition of Contract states that a contract is nothing but a promise or a set of promises, any breach of which the law provides the remedy or the one whose performance or any action enables to recognize the same as a duty. Even though it is not codified across nations, the same has been accepted that the base of promise is to give an assurance of any action, etc, and the parties to a contract accept such a promise to be executed in a future time.

Coming to Indian law, the Indian Contract Act, 1972 defines the term ‘Contract’. Section 2(h) of the Indian Contract act states that any agreement that is enforceable by law is a contract. In a way, the section expresses two main ingredients, they are 1. There should be an agreement, 2. That agreement should be enforceable under the eyes of Law.

It is important to know that every contract that is formed under this law is an agreement but it is also important to note that every agreement is not a contract. An agreement becomes a contract when the same satisfies the essentials provided under the contract law. Those essentials include

• There should be a consideration,
• The parties should be competent enough under the eyes of the law,
• Also, there must be free consent that has gone through,
• The object of such a contract is lawful.

Offer under Indian Contract act, 1872:

What does Offer mean? Section 2(a) of the Indian contract act defines what an offer/proposal is. It states that when a person indicates his/her willingness towards another person to do or to abstain from doing an act with a view to obtain the consent or assent of the other person to such act or the abstinence. In such a case, it is said that the person makes a proposal under the eyes of the law. So, it is clear that one person should show his willingness towards the other for any act or abstinence. Section 9 of the act also talks about the kinds of promises that are expressed and implied.

The section thus implies few essentials to be performed to make such an act as a proposal under the eyes of the law. It includes

• Expression of willingness
• That willingness should be shown to another party or person,
• With the intention to get the assent for that party.

Let us look into few important cases that dealt with the essentials of valid offers under Contract law in India. In the case of Harvey v. Facey, where the person has been interrogated through the telegraph as to whether such a product be sold at a lower price. The court, in this case, held that there was no contract made, as the person just asked for the information and giving information by such informer would not constitute an offer, and also, there was no valid acceptance as well in the above example.

Acceptance under Contract Law:

What amounts to an acceptance under the eyes of the law? It is noted that the intention of the offeree who makes the acceptance should give no space or room for doubt relating to the facts of acceptance. Similarly, he should have the knowledge of the coincidence of offer and acceptance. This, as per Anson’s writings, can be called as ‘mirror image’ rule, that is the acceptance made by the offeree should correspond to the offer that took place just prior to this event. Basically, in order to determine whether the acceptance is decided or concluded, the terms of the parties should be looked into.

This can also be said as the communication of acceptance by the offeree to the offeror should reach him in case of different modes such as through post or if it is through phone call. Such facts should also be looked into in case of determination of the acceptance made between the contracting parties.

Sometimes silence amounts to acceptance, but sometimes it is not. The contract law does not require the person to communicate everything. At the same time, if the offeror has the duty to disclose any facts that are essential to forming part of the contract then if he remains silent, he will have to bear the results of such actions.

Conclusion:

No contract is complete unless and until there are essentials that are completely fulfilled by both the contracting parties. The deals are mostly bilateral in nature and require both of them to be alert about the creation of the contract. An offer should be made to be accepted by the offeree.