2. DEFINATION OF LAW
According to salmon ( Recognized by the father of
business law) :
Law is the body of principles recognized and applied
by the state for providing justice.
According to Green :
Law is the system of rights and obligations which are
enforced by the state.
3. PURPOSE OF LAW
To maintain peace and order in a society
Provide liberty to people
To assist people and their property
Not for the punishment of sins but for the prevention
of the sins.
Prevent people and their property
“An agreement that is enforceable by law” is known as
contract according to contract act 1872.
Contract = Agreement + Enforceability
The promise or set of promises that are forming some
consideration is known as agreement according to
contract act 1872.
Agreement = Promise + Consideration
6. THE PROPOSAL OR OFFER
PROPOSAL OR OFFER :
Proposal and offer both are used in the same sense and
there is no difference in their meanings. It is defined in
the following words :
"When one person signifies to another his willingness
to do or to abstain from doing anything.”
7. OFFERER AND OFFEREE
The person who makes the proposal is called proposer
offerer or promisor.
The person to whom offer is made is called offeree or
Note :- There will be no agreement, if the proposal is
made without the intention of creating legal rights
8. KINDS OF PROPOSAL
1. General Proposal :-
When proposal is made with the entire world it is
called general proposal. But contract is made only with
the person who performs the conditions of the
2. Specified Proposal :-
It is made to specific person or specific class. It is also
accepted by specific person.
9. KINDS OF PROPOSAL
3. Express Proposal :-
When the proposal is expressed in words or in writing
it is called express proposal.
4. Implied Proposal :-
When the proposal is conveyed by the contract of the
offerer, it is called implied proposal.
10. ESSENTIAL OF VALID PROPOSAL
Following are the important conditions :
1. Legal Relationship :-
It is essential for a valid proposal that it must be made
with the intention of creating legal relationship
otherwise it will be only invitation. A social invitation
may not create legal relationship.
Example :- Mr. Arman invites Mr. Shahid t dinner and
he accepts. It does not create any legal relations.
11. ESSENTIAL OF VALID PROPOSAL
2. Clear Terms and Conditions :-
Proposal should be certain clear, understandable and
simple. It may not create any confusion in the mind of
proposee should be precised and definite.
Example :- Mr. Agha offers to sell his house to Mr.
Salman for Rs. 10 lac He agrees. It is a contract and
create legal relationship.
12. ESSENTIAL OF VALID PROPOSAL
3. General and Specific Offer :-
When proposal is opened to the general public it is
called general proposal on the other hand when it is
made to the specific person, it is called specific offer.
In case of general proposal contract is made with
person who accepts the offer.
13. ESSENTIAL OF VALID PROPOSAL
4. Must be Communicated :-
It is also an important rule for the validity of proposal.
Without communication acceptance of proposal by
the proposee is not possible. How an offer can be
accepted unless it has been bought to the knowledge
of a person to whom it is made.
14. ESSENTIAL OF VALID PROPOSAL
5. Assent Must be an Object :-
Proposal without object will not be valid. The object of
the proposal must be to get the assent of the other
party to whom the offer has been made.
6. Distinction Between Proposal and Invitation :-
Proposal is different than the invitation of tenders.
Price list of goods and quotation. These are only
invitation of an offer and not the proposal.
15. ESSENTIAL OF VALID PROPOSAL
7. Communication Method :-
There are three methods of communication proposal
can be made orally, in writing or by conduct. Generally
proposals are made orally or writing.
8. Acceptable Proposal :-
If the acceptance of the proposal is not possible then it
will be not a valid proposal. It is essential that
acceptance must be possible.
Revocation refers to the cancelling or annulment of
something by some authority. When revocation
happens, a privilege, title, or status is removed from
If the library revokes your library card, you can no
longer take out library books — that's a type of
revocation. If a restaurant is dirty, that could result in
the revocation of its health license. If a lawyer breaks
the law, it could lead to the revocation of his license to
1) mutual cancellation of a contract by the parties to it.
2) withdrawing an offer before it is accepted. ("I revoke
3) cancelling a document before it has come into legal
effect or been acted upon, as revoking a will.
4) to recall a power or authority previously given as
cancelling a power of attorney or cancelling a driver's
license due to traffic offenses.
18. MODES OF REVOCATION OF
1. By notice of revocation. Offer may be revoked by a
communication of a notice of revocation by the offeree
to the other party before acceptance is complete
against the offeror himself. An offer made in writing
may be revoked by words of mouth. The notice of
revocation may not always be express. A notice of
revocation to be effective must be communicated to
19. MODES OF REVOCATION OF
2. By lapse of time. A proposal will come to an end by
the lapse of time prescribed in such proposal for its
acceptance or, if no time is so prescribed by the lapse
of time of reasonable time is a question of fact
depending upon the circumstances of each case.
Where the subject matter of the contract is an article,
like gold, the parties of which fluctuate daily in the
market, very short period will be regarded as
reasonable made late in november.
20. MODES OF REVOCATION OF
3. By death or insanity. A proposal is revoked by the
death or insanity of the proposer if the fact of his
death or insanity comes to the knowledge of the
acceptor before acceptance.
4. By counter offer. An offer comes to end when the
offeree makes a counter offer or rejects the offer.
Where an offer is accepted with some modification in
the terms of the offer or with some other condition not
forming part of the offer, such qualified acceptance
amount to a counter offer.
21. MODES OF REVOCATION OF
5. By subsequent illegality. An offer lapses if it
become illegal after it is made and before it is
accepted. Thus, where an offer is made to sell 10 bags
of wheat for Rs. 2500 and before it is accepted, a law
prohibiting the sale of wheat by private individual is
entered, the offer comes to end.