A's pet dog was missing and therefore A instructed his servant to trace the dog. Subsequently, A offered a reward of Rs. 10,000... Is he entitled to it....

Question: A's pet dog was missing and therefore A instructed his servant to trace the dog. Subsequently, A offered a reward of Rs. 10,000 to anybody who found the dog. The servant found the dog but he was unaware of the offer made by A. Later the servant comes to know of the offer and claims the award. Is he entitled to it? Decide. [JJS 2015]

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Answer

Section 2(a) of the Indian Contract Act, 1872 defined proposal as below:-

“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”.

Further Section 2(b) defines ‘promise’ as below:-

“When the person to whom the proposal is made signifies his assent thereto, the proposal is said to be accepted. A proposal, when accepted, becomes a promise”

The facts of the given proposition are borrowed from the landmark case of Lalman Shukla v. Gauri Dutt, 1913 40 ALJ 489. In this case, the Hon’ble Court held that to enter into a contract, it is necessary to keep into consideration two critical aspects i.e.,:-

• To have complete knowledge of the facts of the offer or proposal
  
• Acceptance of the offer

A person to whom the offer is made must accept the proposal in the complete sense. But in all this, it is also important that the communication regarding the proposal/offer being made is done in consonance with Section 4 of the Act. As per this provision, communication can only be complete when it comes to the knowledge of the person to whom it is made.

However, for the conversion of a proposal into an agreement, the presence of both knowledge and assent is necessary but both of them are missing in the present proposition in hand. The fact that the plaintiff did not know and had not given his approval or accepted the proposal there did not exist a valid contract between the two.

When the plaintiff went out in search of the boy, he was merely acting as a servant, hence he was not entitled to get the award.

Applying the aforesaid provisions of the Indian Contract Act in the present facts of the case, the Hon’ble Court held that to create or enter into a valid contract, there must be knowledge and assent given to the offer made by the proposer. Because the plaintiff was not aware of the reward before the performance of his act, there is no scope of acceptance of the offer, hence no question of contract being made. A is not entitled to the reward.