Formation of Contract

1. Formation of Contract All contracts are made by the process of lawful offer by the one party and the lawful acceptance of the offer by the other party.

2. Formation of Contract Example : Karim says to Rahim “Will you purchase my motor car for Tk. 5 lac ?” This is an offer. If Rahim says “Yes”, the offer is accepted and a contract is formed.

3. Proposal • An offer involves the making of a proposal. As per contract act proposal is : When one person signifies to another his willingness to do or not 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.

4. Offer, Offeror and Offeree • A proposal also called an offer . • Offeror : The person who is making the offer is called the offeror. • Offeree :The person to whom the offer is made is called the offeree.

5. Promise, Promisor, Promisee And Acceptance • Acceptance :When the person to whom the proposal is made signifies his assent thereto, the proposal is said to be accepted. • Promise: A proposal when accepted becomes a promise. • Promisor : The person who is making the proposal is called promisor • Promisee : The person who is accepting the proposal is called promisee.

6. Example : • Babor offers to sell his house to Mahin at the price of Tk. 20 lac. This is a proposal. Babor is a promisor or offeror and Mahin is a offeree. If Mahin agrees to buy the House at the same/Proposed/stated price; Mahin becomes the promisee or acceptor. This is a good contract.

7. Rules regarding offer • An offer may be express and may be implied : An offer may be made in two way : (i) by words, spoken or written (ii) by conduct Express offer : When an offer is made by language is called express offer .

8. Rules regarding offer • Example :Babor offers to sell his house to Mahin at the the price of Tk. 20 lac. This is an express offer.

9. Rules regarding offer Implied offer :When an offer is implied from the conduct of a person, it is called Implied offer. Example: National Travels company runs their Bus along the streets. This is an offer by the company to carry passengers at scheduled fares. The offer is accepted when a passenger gets up on a bus with the intention of becoming a passenger.

10. Rules regarding offer 2. An offer may be made to a definite person, to some definite class of persons or to the world at large : Specific offer : When an offer is given to a definite persons or a definite class of person is called Specific offer

11. Rules regarding offer Example : Babor offers to sell his house to Mahin at the the price of Tk. 20 lac. This is an specific offer. Boby puts up a notice offering to pay a reward of Tk. 500/= ao any student who finds out and returns a book which is lost in University. Karim is a student who reads the notice and then finds and brings the book to Boby. Boby’s notice is an offer which is given to a specific group of persons.

12. Rules regarding offer 3. Legal Relationship is required : The offer must be one which is capable to create a legal relationship between the parties. Example :Dhoni agree to go to a cinema with his girl friends. This is not a contract because this agreement will not be enforceable by the law due to absence of legal matter.

13. Rules regarding offer 4. The terms of the offer must be certain, definite, unambiguous and not to vague: Example : Bashir says to his Friends Mahir, “I will give you some money if you marry my Sister Banu.”

14. Rules regarding offer 5. An offer must be communicated to offeree : Example :Boby puts up a notice offering to pay a reward of Tk. 500/= ao any student who finds out and returns a book which is lost in University. Karim is a student who without informing of this notine finds and brings the book to Boby and claim the reward. In that cases Karim will not be entitle to the reward.

15. Rules regarding offer • 6. An offer may be conditional