Posted February 1, 2014 by advocateguru in Learning Centre
 
 

Essentials of valid acceptance

There are some legal rules which make the acceptance effective so as to give rise to a valid contract. These are:

 

(1) Acceptance must be absolute and unqualified (Section 7)

An acceptance to be valid must be absolute and unqualified and according to the exact terms of the offer. An acceptance with a variation, however slight, is no acceptance, and may amount to a mere counter offer which the original offeror may or may not accept.

Examples- A offers to sell his house to B for Rs. 1,000. B replies, “I can pay Rs. 800 for it.” The offer of A is rejected by B as the acceptance is not unqualified. However, B subsequently changes his mind and is prepared to pay Rs. 1,000. This will also be treated as a counter offer and it is up to A whether to accept the same or not.

 

However, a mere variation in the language which does not involve any difference in substance would not make the acceptance ineffective.

Also, if some conditions are implied as a part of the contract, and the offeree accepts the offer subject to those conditions, the acceptance will be treated as valid.

Example

A offers to sell his house to B, and B agrees to purchase it subject to the title being approved by B’s solicitor. The acceptance by B is absolute and unqualified as it is presumed that A has a title to the property and it was not necessary for A to mention anything about the title.

 

Further, an offeree may accept an offer “subject to contract” or “subject to formal contract” or “subject to contract to be approved by solicitors.” The significance of these words is that the parties do not intend to be bound, and are not bound, until a formal contract is prepared and signed by them. The acceptor may agree to all the terms of a proposal and yet decline to be bound until a formal agreement is drawn up.

 

 (2) Acceptance must be communicated to the offeror

The communication of acceptance may be express or implied. A mere mental acceptance is no acceptance. A mere mental acceptance means that the offeree is assenting to an offer in his mind only and has not communicated it to the offeror.

Example–

B, a supplier, sent a draft agreement relating to the supply of Coal and Coke to the manager of a railway company for his acceptance. The manager wrote the word “approved” on the same and put the draft in the drawer of his table intending to send it to the company’s solicitors for a formal contract to be drawn up. By an oversight, the draft agreement remained in the drawer.

Held: That there was no contract as the manager had not communicated his acceptance to the proposer.

 

The acceptance of an offer cannot be implied from the silence of the offeree or his failure to answer.

Example

F offered by letter 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 reply at all, but he told an auctioneer who was selling his horses not to sell that particular horse as he had sold it to his uncle. By mistake, the auctioneer sold the horse. F sued the auctioneer for conversion. Held, F could not succeed as his nephew had not communicated acceptance and there was no contract.

 

However if the offeree has by his previous conduct indicated that his silence means that he accepts, then the acceptance of the offer can be implied from the silence of the offeree. Further, in the case of a general offer, it is not necessary to communicate the acceptance if it is made by acting upon the terms or the offer.

 

(3) Acceptance must be according to the mode prescribed. (Section 7)

Where the offerer prescribes a particular mode of acceptance, then the acceptor should follow that mode. In case no mode of acceptance is prescribed by the proposer, then the acceptance must be according to some usual and reasonable mode. If the proposer prescribed a manner in which it is to be accepted, and the acceptance is not made in such manner, 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 acceptance.

For Example:-when A sends an offer to B through post in the usual course. B should make the acceptance in the “usual and reasonable manner” as no mode of acceptance is prescribed. He may accept the offer by sending a letter, through post, in the ordinary course, within a reasonable time.

Also, in an instance where A sends an offer to B through post in the usual course and asks for an acceptance by wire. B should accept the order by wire. However, if B accepts the offer by a letter, then A may insist that the acceptance should be in the prescribed mode. But if the proposer does not insist within a reasonable time then the proposer is bound by the acceptance, though not made in the prescribed mode.

 

(4) The acceptance must be in response to offer.

There can be no acceptance without offer. Acceptance cannot precede offer. For instance, no allotment of shares in a company can be made unless the allottee has applied for them beforehand (Section 41 of the Companies Act, 1956).

 

(5)The acceptance must be made before the offer lapses or is terminated, revoked or withdrawn. If the offer lapses, then there is nothing to accept.

 

(6)Acceptance can be given by the person to whom the offer is made.

However, in the case of a general offer, acceptance can be given by any member of the public.


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