Explain Proposal and it's essential with the suitable act, case law, example according to Indian contract act 1872

Essential Components of a Proposal: 

Under Section 2(a) of the Indian Contract Act, a proposal is defined as “when one person signifies to another his willingness 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.” A proposal must be made with a clear intention to create legal relations, and it must contain the following essential components:

Offer: The proposal must contain a definite and specific offer. It must specify the terms and conditions of the offer and must be communicated in a clear and unambiguous manner.

Intention to create legal relations: The proposal must be made with the intention to create legal relations. The parties must be aware that their agreement will have legal consequences.

Communication: The proposal must be communicated to the other party. Until the proposal is communicated, it cannot be accepted.

Acceptance: The proposal must be accepted by the other party. Acceptance must be unconditional and in accordance with the terms and conditions of the proposal.

Consideration: The proposal must contain consideration. Consideration is something of value given by one party to another in exchange for the other party’s promise to do or abstain from doing something.

Example:

A offers to sell his car to B for Rs. 2 lakhs. A clearly states the terms and conditions of the offer, including the condition that the payment must be made in cash. B, upon receiving the offer, agrees to purchase the car for the price offered and agrees to pay in cash. The terms of the proposal have been communicated clearly, and B has accepted the offer. There is an intention to create a legal relationship, and consideration is present in the form of the payment of Rs. 2 lakhs.

Case Law:

In Lalman Shukla v. Gauri Dutt (1913), the essential components of a proposal were discussed. That is the proposal should be communicated. In this case, Lalman’s nephew, Madho, went missing, and Lalman offered a reward of Rs. 501 to anyone who could find him. Gauri Dutt, who did not know about the reward, found Madho and brought him back to Lalman. However, Lalman refused to pay the reward to Gauri Dutt, claiming that he had not communicated the reward offer to him. The court held that in order for a proposal to be valid, it must be communicated to the other party. Since Lalman did not communicate the reward offer to Gauri Dutt, he was not entitled to the reward.

In conclusion, a proposal is a crucial component of any contract. The essential components of a proposal include an offer, an intention to create legal relations, communication, acceptance, and consideration. It is important that all these elements are present for the proposal to be valid. The case law discussed above emphasizes the importance of communication in a proposal, which is necessary for the formation of a valid contract.