There are some rules to make valid offer. An offer must be made in accordance with these rules. Rules regarding to valid offer are given below.
- Express and implied offer:
An offer can be made in both expressed and implied form. "Expressed offer" denotes the spoken and written offer and implied offer made by conduct of the party and the circumstance of the case rather than expression.
- Clarity and certainty:
An offer which is intended to create contract must be certain and clear. Ambiguous and uncertain offer does not create valid proposal before the other party. The terms of an offer must be certain and clear.
- An offer may be specific or in general:
It is based on offeree. If an offeree is particular person than it is known as specific offer and the offeree is not identified particularly is known as general offer. The general offer is made generally before the general people at large.
- An offer must be communicated to the offeree:
If an offer is not communicated to the offeree it can not take place as a valid offer. Proper communication of an offer is necessary element to make a valid offer.
According to the section 4 of Indian Contract Act, 1872; the communication of an offer is completed when it comes to the knowledge of the person to whom it is made. The similar provision is also made in section 7(1) of Nepal Contract Act, 2056. According to this section, the act of sending offer is supplied to be completed when the offeree gates knowledge of an offer.
- Intention to create legal relationship:
To be a valid offer, it must be intended and capable to create legal relationship. If it has no capacity to create legal relationship it does not convert into a valid contract.
- Cross and counter offer do not make a contract:
To be a valid contract there should be an offer and acceptance. If two parties make separate offer in the same subject matter it does not create a contract. A cross and counter offer is not regarded as acceptance.
- An invitation of offer is not an offer:
In Carlill v. Carbolic smoke Ball Co. court held that Advertisement in newspaper that the advertiser has goods for sale are not offers. But advertisement of a unilateral contract are offers.5
An invitation to offer seems as similar to an offer but it is not valid offer. It is a preliminary step in forming of a contract. It is only a notice to make an offer another person. For example, The notice of house 'to let' invitation of quotation or list of petrol pump etc. are the illustration of an invitation of offer.
- Offer is seeking acceptance of other party:
An offer is made to seek acceptance of the party to whom it is made. An offer is not valid if there is mere inquiry or expression of a statement.