Business Laws and Management · Elements of Law of Contracts

Offer, Acceptance and Free Consent for CSEET

Updated 11 October 2026 · Fact-checked

An offer (proposal) is a willingness to do or not do something to get another's assent; acceptance turns it into a promise. Consent must be free: not caused by coercion, undue influence, fraud, misrepresentation or mistake (Section 14). To solve questions, find the communication point, then test the consent defect.

Understand Offer, Acceptance and Free Consent

A contract starts with a proposal (offer). One person shows willingness to do or not do something, to get the other person's assent. When the other person accepts, the proposal becomes a promise. So the first thing to check in any question is: was there a clear offer, and was there a valid acceptance?

Communication matters. Under Section 3, communication is made by any act or omission by which a person intends to communicate, or which has that effect. Under Section 4, a proposal is complete when it comes to the knowledge of the person it is made to. An acceptance is complete against the proposer when it is put in a course of transmission, out of the acceptor's power. Against the acceptor, it is complete when it reaches the proposer's knowledge.

A proposal can be revoked before the acceptance is complete as against the proposer (Section 5). Section 6 lists how a proposal ends: notice of revocation, lapse of the stated time (or a reasonable time), failure to fulfil a condition precedent, or the proposer's death or insanity if the acceptor learns of it before accepting.

An invitation to treat is not an offer. It only invites others to make offers. Examples are price tags, catalogues and advertisements inviting bids. The test is intention: does the person mean to be bound as soon as the other says yes? If yes, it is an offer.

Consent is free when it is not caused by coercion (Section 15), undue influence (Section 16), fraud (Section 17), misrepresentation (Section 18) or mistake (Sections 20 to 22). Consent is so caused when it would not have been given but for that factor. If consent is caused by coercion, fraud or misrepresentation, the contract is voidable at the option of the party whose consent was so caused (Section 19). For undue influence the same result follows under Section 19A, where the court may set the contract aside.

Key formulas to remember

Communication of proposal (Section 4): Complete when it comes to the knowledge of the person to whom it is made; A letter is complete on receipt, not on posting.
Communication of acceptance (Section 4): Against proposer: when put in course of transmission. Against acceptor: when it reaches the proposer's knowledge; Posting binds the proposer first. The acceptor is bound only when the letter reaches the proposer.
Revocation of proposal (Sections 5 and 6): Allowed any time before acceptance is complete as against the proposer; Ends also by lapse of time, failure of a condition precedent, or death or insanity of proposer known to acceptor before acceptance.
Free consent (Section 14): Not caused by coercion, undue influence, fraud, misrepresentation or mistake; Caused means consent would not have been given but for the factor.
Coercion (Section 15): Committing or threatening an act forbidden by the Indian Penal Code, or unlawfully detaining or threatening to detain property, to cause a person to enter an agreement; It is immaterial whether the Indian Penal Code is in force where the coercion is used.
Undue influence (Section 16): One party can dominate the other's will and uses that position to gain unfair advantage; If the transaction looks unconscionable, the burden of proof lies on the dominating party.
Effect of defect (Sections 19 and 19A): Coercion, fraud, misrepresentation: voidable at option of the party whose consent was so caused. Undue influence: voidable, court may set aside; Voidable, not void. The innocent party may choose.
Mistake as to law (Section 21): Mistake as to law in force in India: contract not voidable. Mistake as to law not in force in India: same effect as mistake of fact; Illustration: both wrongly believe a debt is time-barred; the contract is not voidable.

How to solve Offer, Acceptance and Free Consent questions

Use this order for any scenario question on offer, acceptance or consent.

1Identify whether the first statement is a real offer or only an invitation to treat. Ask: did the person intend to be bound on a simple yes?
2Check communication. A proposal is complete on knowledge. An acceptance is complete against the proposer on posting and against the acceptor on receipt.
3Check whether the proposal was still alive: revoked, lapsed, conditions unmet, or proposer dead or insane with the acceptor aware.
4Check that the acceptance is absolute and matches the offer, and is given in the way the proposal requires.
5Now test consent. Look for a threat of an illegal act or detention of property (coercion), a dominating relationship (undue influence), a deliberate falsehood (fraud), an innocent wrong statement (misrepresentation) or a mistake.
6State the effect: voidable at the option of the affected party. Note the exception in Section 19: where consent was caused by misrepresentation, or by silence that is fraudulent under Section 17, the contract is not voidable if the party had the means of discovering the truth with ordinary diligence.
7For mistake as to law, apply Section 21: law in force in India means no relief; foreign law is treated as a fact.
8Write the conclusion in one line starting with the rule, then the application.

Quickest way: Two-question filter for MCQs

When to use it: Use in Paper 4 when a scenario has four close options and you have under a minute.

Question 1: Is the contract formed? Look for a proper offer and a communicated acceptance. If an advertisement or price list is the only offer, there is no contract yet.
Question 2: Is consent free? Match the key word: threat of crime or seizing property is coercion; dominance or trust relationship is undue influence; intention to deceive is fraud; innocent false statement is misrepresentation.
Pick the option that says voidable at the option of the affected party, unless it is a mistake as to Indian law, where the answer is not voidable.
For coercion, undue influence, fraud or misrepresentation, reject any option that calls the contract void. These make the contract voidable. Treat mistake separately: a mistake as to Indian law does not make a contract voidable (Section 21), and a mistake of fact is dealt with on its own rules.

Common mistakes in Offer, Acceptance and Free Consent

Treating an advertisement or price tag as an offer.
It looks like a promise to sell.
Fix: Ask if the person intends to be bound on a simple yes. Invitations to treat only invite offers.
Saying a contract with coercion or fraud is void.
Students confuse void with voidable.
Fix: Under Section 19 it is voidable at the option of the party whose consent was so caused. It stays valid until that party avoids it.
Treating a posted acceptance as complete for both sides at the same time.
The two limbs of Section 4 are mixed up.
Fix: Posting completes it against the proposer. Receipt completes it against the acceptor.
Giving relief for a mistake as to Indian law.
Students assume any mistake cancels a contract.
Fix: Under Section 21, a mistake as to law in force in India does not make a contract voidable. Only foreign law is treated like a fact.
Mixing up fraud and misrepresentation.
Both involve false statements.
Fix: Fraud involves intent to deceive. Misrepresentation is an innocent wrong statement. Both make the contract voidable under Section 19, subject to the means-of-discovery exception.
Ignoring the means-of-discovery exception.
Students stop at 'false statement, so voidable'.
Fix: Under Section 19, where consent was caused by misrepresentation, or by silence that is fraudulent under Section 17, the contract is not voidable if the party had the means of discovering the truth with ordinary diligence.

Worked examples

Example 1

Asha posts a letter on Monday offering to sell her scooter to Bharat for ₹40,000. Bharat receives it on Tuesday and posts his acceptance the same day. Asha posts a letter of revocation on Wednesday, which Bharat receives on Thursday. Is there a contract?

Show the solution

The proposal was complete when Bharat received it on Tuesday (Section 4).
Bharat posted his acceptance on Tuesday. Against Asha, the acceptance is complete at that moment.
A proposal may be revoked only before acceptance is complete as against the proposer (Section 5).
Asha's revocation was sent on Wednesday, after acceptance was complete against her. It is too late.

Answer: Yes. A valid contract exists, and Asha's revocation has no effect.

Example 2

Ravi, a money-lender in a village, lends ₹10,000 to Mohan, a farmer who is ill and dependent on him. Ravi makes Mohan sign a bond for ₹20,000 at a very high interest rate. What is the legal position?

Show the solution

Ravi is in a position to dominate Mohan's will because Mohan's mental or bodily distress from illness affects his capacity (Section 16(2)(b)), and Mohan depends on him.
Ravi used that position to obtain an unfair advantage: the bond is for double the sum lent at a very high rate.
This is undue influence under Section 16. The transaction appears unconscionable, so the burden of proving no undue influence lies on Ravi.
Under Section 19A, the contract is voidable at Mohan's option and the court may set the bond aside. Because Mohan received a benefit (₹10,000), the court may do so on terms it thinks just, such as repayment of the ₹10,000 with fair interest.

Answer: The bond is voidable at Mohan's option. The court may set it aside, for example by ordering Mohan to repay the ₹10,000 with fair interest.

Exam tips

In MCQs, spot the key words: threat, dominate, deceive, innocent. They point straight to the correct defect.
Remember that coercion, undue influence, fraud and misrepresentation make a contract voidable, not void. A mistake as to law in force in India does not make it voidable (Section 21). Mistake of fact is dealt with separately.
For timing questions, draw a small timeline of posting and receipt dates before choosing an option.
In written answers, state the section number only if you are sure, then apply the rule to the facts in one or two lines.
Note that Section 21 deals only with mistake as to law, not mistake of fact.

Practice questions from Elements of Law of Contracts

Offer, Acceptance and Free Consent in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Offer, Acceptance and Free Consent: frequently asked questions

What is the difference between an offer and an invitation to treat?

An offer shows a willingness to be bound once the other party says yes. An invitation to treat only invites others to make offers. Price tags, catalogues and brochures usually fall in the second group.

When is acceptance by post complete?

Against the proposer, it is complete when the letter is posted, so it is out of the acceptor's power. Against the acceptor, it is complete when the letter reaches the proposer's knowledge (Section 4).

What does Section 21 say about mistake of law?

A contract is not voidable because of a mistake as to any law in force in India. A mistake as to a law not in force in India has the same effect as a mistake of fact.

What is the difference between coercion and undue influence?

Coercion involves an act forbidden by the Indian Penal Code, or unlawful detention of property, or a threat of either. Undue influence involves a relationship in which one party can dominate the other's will and uses it for unfair advantage.