ACCEPTANCE
Section 2(b) defines acceptance as follows:
“When the person to whom the proposal is made signifies his assent thereto, the proposal is said to be accepted.” Thus, ‘acceptance’ is the manifestation by the offeree of his assent to the terms of the offer.
Legal Rules Regarding a Valid Acceptance
1. Acceptance must be given only by the person to whom the offer is made. An offer can be accepted only by the person or persons to whom it is made and with whom it imports an intention to contract; it cannot be accepted by another person without the consent of the offeror. The rule of law is clear that “if you propose to make a contract with A, then B can’t substitute himself for A without your consent. An offer made to a particular person an be validly accepted by him alone.
ILLUSTRATION : A sold his business to his manager B without disclosing the facts to his customers. C, a customer, who had a running account with A, sent an order for the supply of goods to A by name. B received the same and executed the same. C refused to pay the price. It was held that there was no contract between B and C because C never made any offer to B and as such C was not liable to pay the price to B (Boulton vs Jones).
2. Acceptance must be absolute and unqualified. In order to be legally effective it must be an absolute and unqualified acceptance of all the terms of the offer. Even the slightest deviation from the terms of the offer makes the acceptance invalid. In effect a deviated acceptance is regarded as a counter offer in law.
ILLUSTRATION: L offered to M his scooter for Rs 4,000. M accepted the offer and tendered Rs 3,900 cash down, promising to pay the balance Rs 100 by the evening. There is no contract, as the acceptance was not absolute and unqualified.
3. Acceptance must be expressed in some usual and reasonable manner, unless the proposal prescribes the manner in which it is to be accepted[Section 7(2)]. If the offeror prescribes no mode of acceptance, the acceptance must be communicated according to some usual and reasonable mode. The usual modes of communication are by word of mouth, by post and by conduct. When acceptance is given by words spoken or written or by post or telegram, it is called an express acceptance. When acceptance is given by conduct it is called an implied or tacit acceptance. Implied acceptance may be given either by doing some required act, for example, tracing the lost goods for the announced reward, or by accepting some benefit or service, for example, stepping in a public bus by a passenger.
If the offeror prescribes a mode of acceptance, the acceptance given accordingly will no doubt be a valid acceptance, even if the prescribed mode is funny. Thus, if an offeror prescribes lighting a match as a mode of acceptance and the offeree accordingly lights the match, the acceptance is complete and effective. Section 7(2) itself states that in case of deviated acceptances “the proposer may, within a reasonable time after the acceptance is communicated to him, insist that his proposal shall be accepted in the prescribed manner, and not otherwise; but if he fails to do so, he accepts the (deviated) acceptance.
ILLUSTRATION: If the offeror prescribes ‘acceptance by telegram’ and the offeree sends the acceptance through a messenger, there is no acceptance to the offer, if the offeror informs the offeree that the acceptance is not according to the mode prescribed. But if the offeror fails to do so, it will be presumed that he has accepted the acceptance and a valid contract will arise.
It should be noted that law does not allow an offeror to prescribe ‘silence’ as the mode of acceptance. Thus, a person cannot say that if within a certain time acceptance is not communicated the offer would be considered as accepted. Similarly, a trader who, of his own without receiving any order, sends goods to some person with a with a letter saying “If I do not hear from you by the next Monday, I shall presume that you have bought the goods,” cannot impose a contract on the unwilling recipient. It is so because in the absence of such a rule the offerees will be at the mercy of offerors, unless they reply all such offers in negative which will certainly be causing a lot of inconvenience and financial burden to them.
MENTALLY ACCEPTANCE INEFFECTUAL
Mental acceptance or quiet assent not evidenced by words or conduct does not amount to a valid acceptance; and this is so even where the offeror has said that such a mode of acceptance will suffice. Acceptance must be communicated to the offeror, otherwise it has no effect. Thus, if an oral acceptance is spoken into a telephone after the telephone has gone dead, there is in effect no acceptance. Unless the acceptance of the offer comes to the knowledge of the offeror, there is no identity of mind and therefore no contract.
ILLUSTRATION: A person received an offer by letter. In reply he wrote a letter of acceptance put the letter in his drawer and forgot all about it. Held, this uncommunicated acceptance did not amount to acceptance and so did not complete the contract.
4. Acceptance must be communicated by the acceptor. For an acceptance to be valid, it must not only be made by the offeree but must also communicated by, or with the authority of, the offeree to the offeror.
ILLUSTRATION: In Powell vs Lee, P was a candidate for the post of headmaster in a school. The managing committee of the School passed a resolution selecting him for the post. A member of the managing committee, acting in his individual capacity, informed P that he had been selected, but P received no other intimation. Subsequently \, the resolution was cancelled and P was not appointed to the post. P filed a suit against the committee for breach of contract. The court held that in the absence of an authorized communication from the committee there was no binding contract.
5. Acceptance must be given within a reasonable time and before the offer lapses and/or is revoked.
To be legally effective acceptance must be given within the specified time limit, if any, and if no time is stipulated acceptance must be given within a reasonable time because an offer cannot be kept open indefinitely.
ILLUSTRATION: Where M applied for certain share in a company in June but allotment was made in November and he refused to accept the allotted shares, it was held that the offeror M could refuse to take shares as the offer stood withdrawn and could not be accepted had elapsed. Again, the acceptance must be given before the offer is revoked or lapses by reason of offeree’s knowledge of the death or insanity of the offeror.
6. Acceptance must succeed the offer. Acceptance must be given after receiving the offer. It should not precede the offer. In a company shares were allotted to a person who had not applied for them. Subsequently he applied for shares being unaware of the previous allotment. It was held that the allotment of shares previous to the application was invalid.
7. Rejected offers can be accepted only, if renewed. Offer once rejected cannot be accepted again unless a fresh offer is made.
8. If the proposal is made through an agent, it is enough if the acceptance is communicated to him
If A sends the offer to B by agency of C, and B in turn gives his acceptance to C, the acceptance is complete even if C fails to communicate it to his principal A.
9. Acceptance, in order to be valid, must be made under circumstances which would show that the acceptor is able and willing, then and there, to fulfill the promise. An acceptance to do something which a person has no intention to perform shall not be a valid acceptance.
COMMUNICATION OF ACCEPTANCE
When the contracting parties are face to face and negotiate in person, there is instantaneous communication of offer and acceptance, and a valid contract comes into existence the moment the offeree gives his absolute and unqualified acceptance to the proposal made by the offeror.
But where services of the post office are utilized for communicating among themselves by the contracting parties because they are at a distance from one another, it is not always easy to ascertain the exact time at which an offer or/and an acceptance is made or revoked. In these cases the following rules, as laid down in [Section 4 and 5] will be applicable:
• Communication of an Acceptance has two aspects, viz., as against the proposer and as against the acceptor. The communication of an acceptance is complete (a) as against the proposer, when it is put in a course of transmission to him, so as to be out of power of the acceptor, and (b) as against the acceptor, when it comes to the knowledge of the proposer i.e., when the letter of acceptance is received by the proposer.
ILLUSTRATION: B accepts A’s proposal, by a letter sent by post on 9th instant. The letter reaches A on 11th instant. The communication of the acceptance is complete: as against A, when letter is posted i.e., on 9th, and as against B, when the letter is received by A, i.e., on 11th.
• Acceptance by conduct: Section 8 provides that “performance of the conditions of a proposal, of the acceptance of any consideration for a reciprocal promise which may be offered with a proposal, is an acceptance of the proposal”. Such proposals demand acceptance by performance. Acceptance of money after prior information that higher rates of interest would be charged and retention of goods sent on approval amount to acceptance of the consideration offered along with a proposal.
• Communication to offeror himself: Acceptance must be communicated to the offeror himself. A communication to any other person is as ineffectual as if no communication has been made. The communication of the acceptance should be made to the offeror or to the person he has authorized to receive the acceptance. A communication to the stranger, will not do.
• Acceptance should be made in prescribed manner: Acceptance should be made in the manner prescribe or indicated by the offeror. An acceptance given in any other manner may not be effective, particularly where the offeror clearly insists that the acceptance shall be made in the prescribed manner.
Time During Which an Acceptance can be Revoked
According to Section 5
“A proposal may be revoked at any time before the communication of its acceptance is complete as against the proposer, but not afterwards. An acceptance may be revoked at any time before the communication of the acceptance is complete as against the acceptor but not afterwards.”
In the above example: A may revoke his offer at any time before or at the moment when B posts his letter of acceptance i.e., 9th, but not afterwards. B may revoke his acceptance at any time before or at the moment when the letter of acceptance reaches A i.e., 11th, but not afterwards.
Effect of Delay or Loss of Acceptance in Postal Transit
So far as the offeror is concerned, he is bound by the acceptance the moment the letter of acceptance is posted, although the letter is delayed or wholly lost through an accident of the post. But in order to bind the offeror, the letter of acceptance must be correctly addressed, properly stamped and actually posted. If the letter of acceptance is misdirected because it has not been addressed correctly, there would, in law, be no communication of the acceptance; but if the wrong address is furnished by the offeror himself, he will be bound. So far as the acceptor is concerned, he is not bound by the letter of acceptance till it reaches the offeror. Until the letter of acceptance reaches the offeror, the contract remains voidable at the instance of the acceptor. He can compel the offeror to enforce the contract or he my revoke his acceptance by communicating his revocation at any time before the letter reaches the offeror. Thus, the acceptor is at an advantage, if the letter is delayed or lost in transit.
