The Indian Contract Act, 1872
3. Communication, acceptance and revocation of proposals.
The communication of proposals, the acceptance of proposals, and the revocation of proposals and acceptance, respectively, are deemed to be made by any act or omission of the party proposing, accepting or revoking, by which he intends to communicated such proposal, acceptance or revocation, or which has the effect of communicating it.
Communication of acceptance
An offer is accepted when the acceptance is communicated. The communication must be made to the offeror and a communication of acceptance made to a third person creates no contract; Felthouse v. Bindely, (1862) 6 LT 157.
Exposure of goods: offer or not
The Exposure of goods by a shopkeeper does not amount to an offer to sell. On picking the goods, it is an offer by the customer to buy, and sale is not effected until the buyer’s offer price is accepted by the shopkeeper; Pharmaceutical Society of Great Britain v. Boots Cash Chemists (Southern) Ltd., (1952) 2 QB 795.
Offer to the whole world
Though an offer may be made to the whole world, a contract can arise only by acceptance of the offer. Hence knowledge of the terms of the offer is essential for acceptance. Thus where a person sent his servant in search of his missing boy and subsequently offered a reward to any one who would find the boy, the servant, on finding the boy, could not claim the reward, as his search for the boy could not be regarded as a consideration for the promise of reward; Lalman Shukul v. Gauri Dat, (1913) 11 AQLJ 489.
Unaccepted offer creates no right or obligation
A mere making of an offer does not form part of the cause of action for damages for breach of contract which has resulted from the acceptance of the offer. Ordinarily it is the acceptance of the offer and intimation of that acceptance which results in a contract; Bhagwan Das Goverdhan Das Kedia v. Girdhari Lal & Co., AIR 1966 SC 543.