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    Loc PPT 3

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    Vikas Singh
    The document discusses the legal concept of acceptance in contract law under the Indian Contract Act. It defines acceptance and explains that acceptance can be implied, such as through conduct, or express, such as orally or in writing. Acceptance must be absolute and unqualified, and cannot be conditional or a counteroffer. It must also be communicated to the offeror and be of the whole offer rather than a partial acceptance. A provisional or conditional acceptance does not form a binding contract. The key aspects of a valid acceptance are that it must be communicated to the offeror by the offeree, be absolute and unconditional, and accept all terms of the original offer.

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    Loc PPT 3

    Uploaded by

    Vikas Singh
    713 views20 pages
    The document discusses the legal concept of acceptance in contract law under the Indian Contract Act. It defines acceptance and explains that acceptance can be implied, such as through conduct, or express, such as orally or in writing. Acceptance must be absolute and unqualified, and cannot be conditional or a counteroffer. It must also be communicated to the offeror and be of the whole offer rather than a partial acceptance. A provisional or conditional acceptance does not form a binding contract. The key aspects of a valid acceptance are that it must be communicated to the offeror by the offeree, be absolute and unconditional, and accept all terms of the original offer.

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    LOC PPT 3 - Copy

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    The document discusses the legal concept of acceptance in contract law under the Indian Contract Act. It defines acceptance and explains that acceptance can be implied, such as through conduct, or express, such as orally or in writing. Acceptance must be absolute and unqualified, and cannot be conditional or a counteroffer. It must also be communicated to the offeror and be of the whole offer rather than a partial acceptance. A provisional or conditional acceptance does not form a binding contract. The key aspects of a valid acceptance are that it must be communicated to the offeror by the offeree, be absolute and unconditional, and accept all terms of the original offer.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    713 views20 pages

    Loc PPT 3

    Uploaded by

    Vikas Singh
    The document discusses the legal concept of acceptance in contract law under the Indian Contract Act. It defines acceptance and explains that acceptance can be implied, such as through conduct, or express, such as orally or in writing. Acceptance must be absolute and unqualified, and cannot be conditional or a counteroffer. It must also be communicated to the offeror and be of the whole offer rather than a partial acceptance. A provisional or conditional acceptance does not form a binding contract. The key aspects of a valid acceptance are that it must be communicated to the offeror by the offeree, be absolute and unconditional, and accept all terms of the original offer.

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    of 20

    ACCEPTANCE

    INTRODUCTION
    • OFFER
    • ACCEPTANCE
    • PROMISE
    • CONSIDERATION
    • AGREEMENT
    • CONTRACT
    DEFINITION
    • Section 2(b) of the Indian Contract Act talks about the acceptance of an
    offer. According to the Section, the person to whom an offer is made to
    do or abstain from doing an act with a view to obtain the assent of such
    a person, if gives his assent thereto, is said to have accepted the offer.
    Mode of acceptance

    • Under the Indian Contract Act, acceptance can be by following two ways:

    • Implied acceptance: Acceptance which is not explicitly made by means of


    speech or writing but, by the conduct of the person to whom an offer is
    made. The striking of hammer thrice by the auctioneer in order to show
    his acceptance to the offer made by a bidder is an example of implied
    acceptance to the offer made by the bidder at an auction to the
    auctioneer;
    • Express acceptance: Acceptance which is made by means of words, oral
    or written is known as an express acceptance. For example, A offers B
    his watch for sale through a mail and A replies in positive to the offer by
    email.
    Acceptance: absolute and unqualified

    • Acceptance to be legally enforceable must be absolute and unqualified. Section 7(1)


    of the Indian Contract Act provides that in order to turn an offer into an agreement the
    acceptance to the offer must be absolute and unqualified. The logic behind the
    principle that the acceptance to the offer must be absolute and unqualified is that
    when acceptance is not absolute and is qualified it results into a counter offer which
    leads to the rejection of the original offer made by the offeror to the offeree. If the
    offeree makes any variations in the original terms of the contract proposed to him and
    then accepts the contract, such an acceptance would result in the invalidity of the
    contract.

    • For example, if A offers to sell his bike to B for Rupees 10,000. But B persuades A to
    sell him the bike for 7,000 rupees to which A denies and if B at any later point of time
    agrees to buy the bike for 10,000 rupees. Then A is under no obligations to sell him
    the bike as the counteroffer made by B puts an end to the original offer.
    • It is also important that the acceptance made by the offeree should be
    in toto, i.e. acceptance should be given to all the terms and conditions
    of the offer as acceptance of only a part of the offer is not a good
    acceptance under the law.
    • For example, A makes an offer to B of sale of 30 kg of wheat at Rupees
    700 but B agrees to buy only 10 kg of wheat. Here the acceptance
    made by B is not in toto with respect to the terms of the contract and
    therefore, the acceptance made by B is no acceptance in the eyes of
    law and therefore, A is under no obligation to sell him wheat since there
    is no contract between them.
    Partial acceptance

    • It is a settled principle of law of contract that the offer which is


    put before the offeree should be accepted by him in entirety and
    he can not accept the offer partially by agreeing only to the
    terms of the contract which are favourable to him while rejecting
    the rest of the conditions under the offer as an incomplete
    acceptance of the offer would result into counter-proposal and
    therefore, it will not bind the offeror as there is no binding
    contract between him and the offeree.
    Acceptance with subsequent condition
    • In the law of contract, the term “condition” is used in a loose sense and it is used synonymously as
    “terms”, ‘’condition” or ”clause”. In its proper sense, the term condition means some operative term
    subsequent to acceptance and prior to acceptance, it is a fact on which the rights and duties of the
    parties to the contract depend on. The fact can be any act or omission by any of the contracting
    parties, an act of the third party or happening or not happening of any natural event. Conditions are of
    three types, which are as follows:

    • Express condition: In an express condition, certain facts can operate as condition as it has been
    expressly agreed upon by the parties to the contract;
    • Implied condition: When certain facts which operate as a condition are not expressly mentioned by
    the parties but can be inferred by the conduct of the parties to contract is known as an implied
    condition;
    • Constructive condition: When the court believes that the parties to a contract must have intended to
    operate certain conditions because the court believes that the Justice requires the presence of the
    condition. These conditions are known as constructive conditions.
    • A contract comes into force by the acts or conduct of one party
    to the other party. The acts or conduct of the party can be
    turned into a promise only by meeting of mind or an agreement
    between both the parties. An acceptance that carries a
    subsequent condition may not have the effect of counter-
    proposal.
    • Thus, where a person ‘A’ accepted the terms of the contract for
    the sale of a good by accompanying the acceptance with the
    warning that if money was not delivered to him by a particular
    date then, the contract will remain repudiated. The acceptance
    of the offer would not be deemed to be a counter-proposal.
    Provisional Acceptance

    • Provisional acceptance is the type of acceptance by the offeree which is


    made subject to the final approval. A provisional acceptance does not
    ordinarily bind either party to the contract until the final approval is given
    to the provisional acceptance made by the offeree. Until the approval is
    given, the offeror is at liberty to cancel the offer made to the offeree.
    • In Union of India v. S. Narain Singh, the High Court of Punjab, AIR 1953
    P H 274, held that where the condition attached to the auction sale of
    the liquor was that the acceptance of the bid shall be subject to
    confirmation by the Chief Commissioner. The contract will not be
    complete till the highest bid is confirmed by the Chief Commissioner and
    till the confirmation is made the person whose bid is provisionally
    accepted is at liberty to withdraw the bid.
    Rules regarding Valid Acceptance
    • 1] Acceptance can only be given to whom the offer was made
    • In the case of a specific proposal or offer, it can only be accepted by the person it
    was made to. No third person without the knowledge of the offeree can accept the
    offer.
    • Let us take the example of the case study of Boulton v. Jones, BOULTON VS.
    JONES {1857} 2H AND N564
    • Boulton bought Brocklehurst’s business but Brocklehurst did not inform all his
    creditors about the same. Jones, a creditor of Brocklehurst placed an order with him.
    Boulton accepted and supplied the goods. Jones refused to pay since he had debts
    to settle with Brocklehurst. It was held that since the offer was never made to
    Boulton, he cannot accept the offer and there is no contract.

    • When the proposal is a general offer, then anyone with knowledge of the offer can
    accept it.
    • 2] It has to be absolute and unqualified
    • Acceptance must be unconditional and absolute. There cannot be conditional
    acceptance, that would amount to a counteroffer which nullifies the original offer. Let
    us see an example. A offers to sell his cycle to B for 2000/-. B says he accepts if A
    will sell it for 1500/-. This does not amount to the offer being accepted, it will count
    as a counteroffer.

    • Also, it must be expressed in a prescribed manner. If no such prescribed manner is


    described then it must be expressed in the normal and reasonable manner, i.e. as it
    would be in the normal course of business. Implied acceptance can also be given
    through some conduct, act, etc.
    • 3] Acceptance must be communicated
    • For a proposal to become a contract, the acceptance of such a proposal
    must be communicated to the promisor. The communication must occur
    in the prescribed form, or any such form in the normal course of
    business if no specific form has been prescribed.
    • Further, when the offeree accepts the proposal, he must have known
    that an offer was made. He cannot communicate acceptance without
    knowledge of the offer.
    • So when A offers to supply B with goods, and B is agreeable to all the
    terms. He writes a letter to accept the offer but forgets to post the letter.
    So since the acceptance is not communicated, it is not valid.
    • Communication of acceptance of a proposal should be communicated
    to the offerer himself. If it is made to any other person, it will be
    ineffectual as if there was no communication. Moreover, as held in the
    case of Felthouse v Bindley [1862] EWHC CP J35, an offeror cannot
    say that if no answer is received within a certain time, the offer shall be
    deemed to have been accepted.
    • It is also pertinent that the communication of acceptance should be
    from a person who has authority to accept. In Powel v Lee[10], it was
    held that information from an unauthorized person is of no value.
    Felthouse v Bindley [1862] EWHC CP J35
    • Facts
    • The complainant, Paul Felthouse, had a conversation with his nephew, John Felthouse, about buying his horse.
    After their discussion, the uncle replied by letter stating that if he didn’t hear anymore from his nephew
    concerning the horse, he would consider acceptance of the order done and he would own the horse. His nephew
    did not reply to this letter and was busy at auctions. The defendant, Mr Bindley, ran the auctions and the nephew
    advised him not to sell the horse. However, by accident he ended up selling the horse to someone else.
    • Issues
    • Paul Felthouse sued Mr Bindley in the tort of conversion, with it necessary to show that the horse was his
    property, in order to prove there was a valid contract. Mr Bindley argued there was no valid contract for the horse,
    since the nephew had not communicated his acceptance of the complainant’s offer. The issue in this case was
    whether silence or a failure to reject an offer amount to acceptance.
    • Held
    • It was held that there was no contract for the horse between the complainant and his nephew. There had not
    been an acceptance of the offer; silence did not amount to acceptance and an obligation cannot be imposed by
    another. Any acceptance of an offer must be communicated clearly. Although the nephew had intended to sell the
    horse to the complainant and showed this interest, there was no contract of sale. Thus, the nephew’s failure to
    respond to the complainant did not amount to an acceptance of his offer.
    POWELL VS. LEE AND OTHERS, (1908) 99 LT 284

    • The plaintiff Powell has applied for a post of a headmaster and his
    application has been accepted by the school board. Before the formal
    appointment is made, one of the board members had informed Powell of
    the decision which was later withdrawn by the Board. Powell sued the
    school for breach of contract. The court stated that the acceptance was
    not communicated through someone authorized by the school board
    and therefore there was no valid contract.
    • Towards an acceptance being treated as valid, it is essential that the
    same should be communicated to the offeror either by the offeree or by
    means of some duly authorized individual on his behalf. If the
    communication is made by means of an unauthorized individual, it does
    not become a contract.
    • 4] It must be in the prescribed mode
    • Acceptance of the offer must be in the prescribed manner that is
    demanded by the offeror. If no such manner is prescribed, it must be in
    a reasonable manner that would be employed in the normal course of
    business.
    • But if the offeror does not insist on the manner after the offer has been
    accepted in another manner, it will be presumed he has consented to
    such acceptance.
    • So A offers to sell his farm to B for ten lakhs. He asks B to communicate
    his answer via post. B e-mails A accepting his offer. Now A can ask B to
    send the answer through the prescribed manner. But if A fails to do so, it
    means he has accepted the acceptance of B and a promise is made.
    Proposal by Whom

    • 5] Implied Acceptance
    • Section 8 of the Indian Contract Act 1872, provides that
    acceptance by conduct or actions of the promisee is acceptable.
    So if a person performs certain actions that communicate that
    he has accepted the offer, such implied acceptance is
    permissible.
    • So if A agrees to buy from B 100 bales of hay for 1000/- and B
    sends over the goods, his actions will imply he has accepted the
    offer.
    Questions

    • Q: Mere silence can amount to acceptance. True or False?


    • Ans: The statement is false. Mere silence can never amount to
    the offer being accepted. Acceptance has to be communicated
    to the offeror whether it is expressed, or implied.
    • Q: What is the reasonable time to accept a proposal?
    • Ans: The proposal must be accepted within the time limit given
    by the offeror. If no such time limit is prescribed then it must be
    accepted within a reasonable time or before the offer lapses.
    Now a reasonable time has no definition in law, it will depend
    entirely on the situation, circumstances, and the usual norms.
    When communication is complete?
    • Communication of acceptance (Section 4)
    • Communication of acceptance is complete when it is put in the
    course of transmission to him as to be out of the power of the
    acceptor to withdraw the same and when it comes to the
    knowledge of the proposer.

    • Time of revocation of acceptance


    • An acceptance may be revoked at any time, but not afterward,
    before the communication of the acceptance is complete as
    against the acceptor.

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