Acceptance 2(b):- When the person to whom the proposal is made, signifies his assent there to , the proposal is said to be accepted
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Legal Rules for the Acceptance Under |The Indian Contract Act 1872 Notes|
- Acceptance must be absolute and unqualified.
Example: A offers to sell his house to B for Rs. two lakhs. B accepts the offer and promises to pay the price in four installments. This is not pay the acceptance as the acceptance is with variation in the terms of the offer.
- Acceptance must be communicated: Mere mental acceptance is no acceptance, But there is no requirement of communication of acceptance of general offer.
Example: The manager of Railway Company received a draft agreement relating to the supply of coal. The manager marked the draft with the words “Approved” and put the same in the drawer of his table and forgot all about it. Held, there was no contract between the parties as the acceptance was not communicated. It may however, be pointed out that the Court construed a conduct to parties as railway company was accepting the supplies of coal from time to time.
- Manner of acceptance
General rule say that it must be as per the manner prescribed by offeror. If no mode is prescribed in which it can be accepted, then it must be in some usual and reasonable manner.
- If there is deviation in communication of an acceptance of offer, offeror may reject such acceptance by sending notice within reasonable time. If the offeror doesn’t send notice or rejection, he accepted acceptance of offer.
Example: A offers B and indicates that the acceptance be given by telegram. B sends his acceptance by ordinary post. It is a valid acceptance unless A insists for acceptance in the prescribed manner.
- Acceptance of offer must be made by offeror.
Example: A applied for the headmastership of a school. He was selected by the appointing authority but the decision was not communicated to him. However, one of members in his individual capacity informed him about the selection. Subsequently, the appointing authority cancelled its decision. A sued the school for breach of contract. The Court rejected the A’s action and held that there was no notice of acceptance. “Information by unauthorized person is as insufficient as overhearing from behind the door”.
- Acceptance must be communicated to offeror
- Time limit for acceptance
If the offer prescribes the time limit, it must be accepted within specified time.
If the offer does not prescribe the time limit, it must be accepted within reasonable time.
Example : A applied (offered) for shares in a company in early June. The allotment (Acceptance) was made in late November. A refused to take the shares. Held, A was entitled to do so as the reasonable time for acceptance had elapsed.
- Acceptance of offer may be expressly (by words spoken or written); or impliedly (by acceptance of consideration); or by performance of conditions (e.g.in case of a general offer)
- Mere silence is not acceptance of the offer
Example A offers to B to buy his house for Rs.5 lakhs and writes “If I hear no more about it within a week, I shall presume the house is mine for Rs.5 lakhs. “B does not respond. Here, no contract is concluded between A and B.
- However, following are the two exceptions to the above rule. It means silence amounts as acceptance of offer.
- Where offeree agrees that non – refusal by him within specified time shall amount to acceptance of offer.
- When there is custom or usage of trade which specified that silence shall amount to acceptance.
- Acceptance subject to the contract is no acceptance
If the acceptance has been given ‘subject to the contract” or subject to approval by certain persons, it has not effect at all. Such an acceptance will not create binding contract until a formal contract is prepared and signed by all the parties.
General Rules as to Communication of Acceptance
- In case of acceptance by post
Where the acceptance is given by post, the communication of acceptance is complete as against the proposer when the letter of acceptance is posted. Thus, mere posting of letter of acceptance is sufficient to conclude a contract. However, the letter must be properly addressed and stamped.
- Delayed or no delivery of letter
Where the letter of acceptance is posted by the acceptor but it never reaches the offeror, or it is delayed in transit, it will not affect the validity of acceptance. The offeror is bound by the acceptance.
- Acceptance by telephones telex or tax
If the communication of an acceptance is made by telephone, tele-printer, telex, fax machines, etc, it completes when the acceptance is received by the offeror. The contract is concluded as soon as the offeror receives not hears the acceptance.
- The place of Contract
In case of acceptance by the post, the place where the letter is posted is the place of contract. Where the acceptance is given by instantaneous means of communication (telephone, fax, tele-printer, telex etc.), the contract is made at the place where the acceptance is received,
- The time of Contract
In case of acceptance by post, the time of posting the letter of acceptance to the time of contract. But in case of acceptance by instantaneous means of communication, the time of contract is the time when the offeror gets the communication, the time of contract is the time when offeror gets the communication of acceptance.
- Communication of acceptance in case of an agent.
Where the offer has been made through an agent, the communication of acceptance is completed when the acceptance is given either to the agent or to the principal. In such a