What is Acceptance? What are the rules regarding Valid
Acceptance?
Definition of Acceptance:
According to Section 2(b) of the Indian Contract Act,
1872,
“When
a person, to whom a proposal is made, signifies his assent thereto, the proposal is said to be accepted.”.
Thus,
acceptance is the act of giving consent to the proposal.
According to William Anson, “An acceptance is like a stick of
matchbox in front of a truck of gunpowder.”
A person making the proposal is called promisor &
the person accepting it, is called the promisee.
Who can accept an Offer?
An offer can be accepted only by the person or persons
to whom it has been made. When an offer is made to
a person it can only be accepted by him. When it is made to a class of persons,
it can be accepted by any member of that class. Finally, if a proposal is made
to the world at large, it can be accepted by any person or persons in the
world fulfilling conditions.
Essentials of a Valid Acceptance:
1. Acceptance of an offer must be Absolute & Unconditional:
Acceptance of proposals with
conditions or variations is no acceptance at all. Acceptance must be absolute
& unconditional.
Example:
A made an offer to B to purchase a house with possession from 25th July. The
offer was followed by an acceptance suggesting possession from 1st August.
Held, there was no concluded contract [Routledge v. Grant, (1828) 4 Bing.
6531].
2. Acceptance must be made within a Reasonable Time:
If the proposer has prescribed the time limit for the acceptance of an offer,
acceptance is not legally binding. However, if no time limit is prescribed by
the proposer, the acceptance must be made within a reasonable time.
3. Acceptance must be in the Mode prescribed:
If the proposer has not prescribed any mode of acceptance, it must be made in some usual & reasonable manner. If the acceptance is not according to the mode prescribed, or some usual and reasonable mode (where no mode is prescribed) the offeror may intimate to the offer within a reasonable time that the acceptance is not according to the mode prescribed and may insist that the offer must be accepted in the prescribed mode only. If he does not inform the offeree, he is deemed to have accepted the acceptance
Example: A makes an offer to B and says: “If you accept the offer, reply by wire.” B sends the reply by post. It will be a valid acceptance unless A informs B that the acceptance is not according to the mode prescribed.
4. Acceptance must be Communicated to the Offeror:
Acceptance must be communicated to the offeror to create a binding contract.
Mental acceptance is no acceptance in the eyes of law.
Example:
A draft agreement relating to the supply of coal was sent to the manager of a railway company for his acceptance. The manager wrote the word ‘approved’ and put the draft in the drawer of his table intending to send it to the company’s solicitor for a formal contract to be drawn up. By some oversight the document remained in the drawer. Held, there was no contract [Brogden v. Metropolitan Rail Co., (1877) 2 A.C. 666].
In some cases, the offeror may dispense with the communication of acceptance. It happens when the performance of certain conditions takes place, or some required act is done (Sec. 8).
For example, in Carlill v. Carbolic Smoke Balls Co., (1893) I Q.B. 256, where Carlill used the smoke balls of the company according to its directions and contracted infl uenza, it amounted to acceptance of the offer by doing the required act and she could claim the reward.
5. Silence cannot be prescribed as mode of acceptance:
(i) F offered
to buy his nephew’s horse for £ 30 saying: “If I hear no more about it I shall consider
the horse is mine at £ 30.” The nephew did not write to F at all, but he told
his auctioneer who was selling his horses not to sell that particular horse
because it had been sold to his uncle. The auctioneer inadvertently sold the
horse. Held, F had no right of action against the auctioneer as nothing was
communicated as acceptance. [Felthouse v. Bindley, (1862) 11 C.B. (N.S.)
869].
6. Acceptance of an Offer is Acceptance of all its Terms:
Acceptance of an offer is the acceptance of all the terms even if the Offeree is ignorant of some of the terms of the offer.
7. There can be no acceptance before the communication of offer.
Acceptance
cannot precede an offer.
If the act is done without the knowledge
of the offer it is no acceptance of the offer because to an uncommunicated
offer there can be no consent.
8.
If the proposal is communicated through an agent, it is suffiecient if the
acceptance is communicated to him.
When does Communication get complete?
The communication of a proposal
is complete when it comes to the knowledge of the person to whom it is made.
Example:
A proposes, by letter, to sell a house to B at a certain price.
The
communication of the proposal is complete when B receives the letter.
The communication of an acceptance is complete, -
As against the proposer,
when it is put in a course of transmission to him so as to be out of the power
of the acceptor;
As against the acceptor,
when it comes to the knowledge of the proposer.
The
communication of a revocation is complete,-
Example:
B accepts A’s proposal by a letter sent by post.
The communication of the acceptance is complete.
As against A
when the letter is posted;
As against B,
when the letter is received by A.
The communication of a revocation is complete,-
As
against the person who makes it, when it is put into a course of transmission
to the person to whom it is made, so as to be out of the power of the person
who makes it;
As
against the person to whom it is made, when it comes to his knowledge.
Illustrations-
A revokes his proposal by telegram.
The revocation is complete as against A
when the telegram is despatched. It is complete as against B when B receives
it.
B revokes his acceptance by telegram.
B’s revocation is complete as against B when the telegram is despatched, and as
against A when it reaches him.
The acceptance of an offer may be express or implied.
It is express when the acceptance has been signified either in writing or by word of mouth or by the performance of some required acts of the offeree.
Example:
(i) A shopkeeper received an order from a customer – a household lady. He executed the order by sending the goods. The customer’s order for goods constitutes the offer which was accepted by the shopkeeper by sending the goods. It is a case of acceptance by conduct. Here the shopkeeper is accepting the offer by the performance of the act (i.e., sending the goods).
(ii) A loses his dog and announces a reward of ` 500 to anyone who brings his dog to him. B need not convey his acceptance of the offer, which is a general one. If he finds the dog and gives it to A, he is entitled to the reward as he accepted the offer by doing the required act.
Implied acceptance. Acceptance is implied when it is said to be gathered from the surrounding circumstances or the conduct of the parties.
Example:
(i) A enters into a bus for going to his destination and takes a seat. From the very nature of the circumstance, the law will imply acceptance on the part of A.
(ii) A’s scooter goes out of order and he is stranded on a lonely road. B, mechanic who observes this starts correcting the fault. A allows B to do the same. From the nature of the circumstances, A has given his acceptance to the offer of B.
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