The term 'Proposal' is also called 'Offer'. Proposal / Offer is the starting point for the formation of any Contract.  The proposal is defined under Section 2(a) of the Indian Contract Act, 1872. A proposal when accepted it becomes a promise.

1) Definition of Proposal:

  According to Section 2(a) of the Indian Contract Act, 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.


2) Section 2 (c) Defines Promisor and Promisee:

  • Promisor: The person making the proposal is called the “promisor”.
  • Promisee: The person accepting the proposal is called “promisee”.



3) Revocation of Proposal :

               According to Section 5 of the Indian Act 1872,  A proposal may be revoked at any time before the communication of its acceptance is complete as against the proposer, but not afterwards. An acceptance may be revoked at any time before the communication of the acceptance is complete as against the acceptor, but not afterwards.

Examples :

      A proposes, by a letter sent by post, to sell his house to B. B accepts the proposal by a letter sent by post. A may revoke his proposal at any time before or at the moment when B posts his letter of acceptance, but not afterwards. B may revoke his acceptance at any time before or at the moment when the letter communicating it reaches A, but not afterwards.


4) Revocation, How it is made: (Section 6)


      Revocation of Proposal may take place under the following ways.

     (1) by the communication of notice of revocation by the proposer to the other party;

     (2) by the lapse of the time prescribed in such proposal for its acceptance, or, if no time is so prescribed, by the lapse of a reasonable time, without communication of the acceptance;

      (3) by the failure of the acceptor to fulfil a condition precedent to acceptance; or

      (4) by the death or insanity of the proposer, if the fact of the death or insanity comes to the knowledge of the acceptor before acceptance.


           According to Section 4 of the Indian Contract Act, 1872 communication of revocation of the proposal is complete and binding on acceptor only when such communication comes to his knowledge.


Example :

      X revokes Proposal by Telegram, The Revocation is complete as against A when the telegram is dispatched, and against B it is complete when he receives the Telegram.




See also : 

1) When a unsound mind person is capable to enter into contract ?

2) Who is Minor ? Effects of Minor's Agreement.

3) Difference / Distinction between Contract and Agreement

4) Distinction / Difference between Contract of Indemnity and Guarantee

5)  Difference / Distinction Between Condition and Warranty


0 comments:

Post a comment

See Also..