Offer and Acceptance

Concept

A contract begins with an offer: a clear statement of willingness to be bound on certain terms. It becomes binding when the offer is accepted without changes.

An offer can be made to one person or to the public at large. Acceptance must be made with knowledge of the offer, and in some cases performing the requested act is itself the acceptance.

Case laws

Carlill v. Carbolic Smoke Ball Co.

[1893] 1 QB 256, Court of Appeal (England), 1893

A company advertised a reward for anyone who used its product and still caught influenza. The court held this was an offer to the whole world, accepted by anyone who performed the conditions, without needing to tell the company first.

Lalman Shukla v. Gauri Dutt

(1913) 11 ALJ 489, Allahabad High Court, 1913

A servant found a missing boy without knowing a reward had been announced. The court held he could not claim the reward, because there can be no acceptance without knowledge of the offer.