2.3 What is an Acceptance?
Section 2 (b) defines acceptance as, „ When the person to whom the proposal is made signifies his assent thereto, the proposal is said to be accepted.‟ Thus acceptance is the expression of assent for the offer/ proposal. The proposal when accepted becomes a promise.
2.3.1 Who Can Accept?
Only the person to whom the offer has been made has the right to accept. Thus it is only the offeree who can accept the offer made by the offeror. The person to whom specific offer is made can only accept the offer. On the other hand a general offer made to the public at large can be accepted by anyone having knowledge of the offer.
Case Law 10
Boulton vs. Boulton [(1957) 157 E.R. 232]
A sold his business to B without disclosing this to his customers. J, the customer of A was not aware of the sale and placed an order for the supply of goods in ignorance. B has supplied the goods. J refused to pay for the goods, so B sued him. The Court held that J was not liable because J had made an offer to A and not to B and B knew very well that the offer was not made to him and thus he could not consider the offer.
2.4 Conditions for Valid Acceptance
There are various rules for valid acceptance. These rules are mentioned below:
- Acceptance Must be Absolute and Unqualified : The offeree should accept the whole of the offer. Accepting a few terms of an offer is not a valid acceptance. The offeree must accept the offer without putting any conditions. Conditional acceptance is not a valid acceptance. If acceptance is conditional it leads to a counter-offer which may or may not be accepted by the original offeror.
Case Law 11
Vishwa Industrial Comp. Pvt. Ltd. vs. Mahanadi Coalfields Ltd & others (2007) A.I.R. Orissa 171
In that case, the Court held that acceptance with a variation or condition was not acceptance but merely a counter-proposal. In order to make a proposal a promise, acceptance must be absolute and unqualified.
- Acceptance must be in the mode prescribed or some usual and reasonable mode :If the offeror prescribes a mode in which the offer has to be accepted and the offeree uses a different mode of acceptance then the offeror can within a reasonable time insist that the offer be accepted in the prescribed manner and not otherwise. If the offeree still does not follow the prescribed mode of acceptance then in that case the offeror may choose not to be bound by the acceptance.
Illustration
Aruna sends a letter of offer to Awadh Raj asking him to buy her house for 20 lakhs in Delhi. She also states that if the proposal is acceptable to him, he can send his acceptance through the post office. After receiving the offer, Awadh Raj sent his acceptance by e-mail. Aruna insisted on receiving the email that Awadh Raj send his acceptance only by post and not by any other mode. Awadh Raj did not send a post to accept him. Therefore Aruna was not bound by the acceptance of Awadh Raj.
In case the offeree follows a different mode of acceptance from the prescribed mode and the offeror does not insist then the offeror is deemed to have accepted the deviated acceptance.
Illustration
Aruna sends a letter of offer to Awadh Raj asking him to buy her house for 20 lakhs in Delhi. She also states that if the proposal is acceptable to him, he can send his acceptance through the post office. After receiving the offer, Awadh Raj sent his acceptance by e-. Aruna did not say anything to Awadh Raj on receiving the email. It was moreover bound by the acceptance of Awadh Raj.
When the offeror does not prescribe any specific mode of acceptance then the offeree has to give the acceptance in some reasonable and usual mode. The reasonable and usual mode depends upon the circumstances of the situation. Some of the usual modes are by word of mouth, by post, by email, by courier and by conduct.
Illustration
Aruna sends a letter of offer to Awadh Raj asking him to buy her house for 20 lakhs in Delhi. It does not mention any specific mode of acceptance. After receiving the offer, Awadh Raj sends his acceptance by e-mail. Therefore Aruna is bound by the acceptance of Awadh Raj.
Unusual Mode
Illustration
Aruna sends a letter of offer to Awadh Raj asking him to buy her house for 20 lakhs in Delhi. It does not mention any specific mode of acceptance. After receiving the offer, Awadh Raj sends his letter of acceptance through a pigeon. Aruna is not bound by the acceptance of Awadh Raj, because a pigeon is not a reasonable and common mode of communication in today's world.
- Silence Cannot be a Mode of Acceptance: The offeror cannot impose on the offeree a condition like: If you do not reply within a reasonable time then I shall consider the offer to be accepted. The offeror cannot take the offeree‟s silence as acceptance of offer.
Illustration
Nisha, a seminar coordinator, sends an invitation to the seminar to Ravi via e-mail. The email also said that if Ravi did not reply within a week, he would have assumed that he had accepted the invitation. Ravi is not answering. Therefore, Nisha can not assume that Ravi accepted the invitation.
There are a few exceptions to the rule that „silence does not imply acceptance‟ which are as follows:
(1) If the offeree takes benefit from the offer, it will amount to acceptance:
Illustration
Akhil subscribes to Readers Digest for a year, and after one year, he does not inform the publisher that he would like to withdraw from the subscription and continues to accept Digest. He is therefore liable to pay for copies of the Readers digest he took after the period of subscription expired because his silence is taken as acceptance for the continuation of his subscription.
(2) If the offeree due to previous dealings has given the offeror reasons to believe that his / her silence amounts to acceptance. A leading case on this point is
Case Law 12
Bharat Petroleum Corp Ltd Vs. Great Eastern Shipping Co. Ltd. [ (2008) A.I.R. S.C. 357]
In a recent historic judgment, the Supreme Court of India noted that, in certain circumstances coupled with his / her conduct, the offeree consents to silence takes the form of a positive act which may constitute acceptance. The terms of the contract between the parties can therefore be established not only by their words, but also by their conduct.
(3) Performance of all conditions of the offer without communication of acceptance is considered acceptance of offer.
Illustration
Ramu offers to sell his horse to Ghatak for rupees twenty thousand and says that if the offer is acceptable Ghatak should send a cheque of rupees five thousand in advance. Gahtak sends a cheque of rupees five thousand. Hence the fulfillment of the condition of sending cheque is acceptance of offer.
- Acceptance Must be Given Within The Time Prescribed or Within a Reasonable Time: Acceptance by the offeree must be given within the period prescribed by the offeror or if the period is not specified, then the acceptance must be given within a reasonable time.
Illustration
Venkat offers to sell his scooter to Rehman and tells him to reply within a week. Rehman does not reply within a week, so the offer lapses.
- Acceptance Cannot Precede an Offer: An offeree can give acceptance only after the offer has been communicated to him / her. A leading case on this point is
Case Law 13
Lalman Shukla vs. Gauri Dutt (1913) ALL. L.J. 389
A person sent his servant to locate his missing nephew. After the servant left, he announced a reward for locating his missing nephew. He announced a reward of five hundred and one rupees. The servant traced the nephew, but he was ignorant of the reward offered. He claimed the reward later. The Court held that there can be no acceptance unless there is knowledge of the offer, and since the servant did not know the reward when he found the boy, he was not entitled to the reward.
- Acceptance Must be Communicated: The offeree must communicate his / her acceptance to the offeror for only then can the agreement take place.
Illustration
Anita sends a letter of offer to sell her lap top to Geetha for rupees thirty thousand. Geetha writes a letter of acceptance to buy the lap top but by mistake forgets to post the letter. Hence the agreement has not been formed.
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