ACCEPTANCE - THE INDIAN CONTRACT ACT, 1872

Acceptance: Sec.2 (b) - When the person to whom the proposal is made signifies his assent thereto, the proposal is said to be accepted. A proposal, when accepted, becomes a promise.

Acceptance of offer results in contract – must be communicated to the offeror - may be express or implied – when communicated by words (spoken or written) or some specific act, it is express – it is implied by he conduct of the parties or circumstances.

Example : (a) Strike of the hammer on the table by the auctioneer – implied acceptance.

                   (b) V.Rao vs. A. Rao - old widow asked her niece to move in with her - promised to will some property in exchange – niece moved in and stayed till widow’s death – express acceptance by act – valid contract - niece entitled to property.

Acceptance of particular offer - offer made to particular person – can be accepted by that specific person alone – if accepted by any other party, not valid.

Boulton Vs. Jones – B purchased goods from H – H owed debt to J – J placed order on H – B supplied the goods intending to set off his debt against H – Invalid acceptance, as offer not made to B – no contract.  However, B can recover the goods from J under quasi-contract. 

Acceptance of general offer – when made to world at large – can be accepted by any person. E.g. Carlill vs. Carbolic Smoke Ball Co.

Essentials of Acceptance:

1.      Must be absolute and unqualified - must conform to all the terms of the offer – if no ad idem on all terms, no contract.

Routledge vs. Granti – offer by R to G - to purchase house with possession on specific date – G accepted the offer, suggesting possession on another date – not valid acceptance.

Neale Vs. Merret – M offered to sell land to N at ₤280 – N accepted – enclosed ₤80 with promise to pay balance in instalments of ₤50 – qualified acceptance – no contract.

2.      Communicated to offeror–external manifestation in perceptible (understandable) form – mental resolve is no acceptance.

Felthouse Vs.Bindley  - F offered to his nephew to buy his horse – wrote “If I her no more about it, I shall consider the horse is mine” – nephew did not respond – told his auctioneer not to sell the horse as sold to his uncle – auctioneer inadvertently sold the horse – Acceptance of F’s offer not communicated to him – held no contract – F cannot claim damages from auctioneer.

Brogden Vs. Metropolitan Rail Co.  – draft agreement for supply of coal sent to railway co. – manager wrote ‘approved’ over it – kept it in his drawer – not communicated to the offeror – Held, no contract. However, in cases where acceptance is by conduct – it is implied acceptance – need not be specifically communicated to the offeror – E.g. Carlill Vs. Carbolic Smoke Ball Co.

3.      Made in prescribed or reasonable mode  - If acceptance not in prescribed or reasonable mode – offeror must intimate acceptor insisting acceptance in  prescribed mode – if acceptor not informed, deemed acceptance.

Example: A makes offer to B – writes “If you accept the offer, reply by wire” – B replies by post – If A does not insist on acceptance by proper mode, it is valid acceptance.

4.      Given within a reasonable time – if time limit prescribed – must be within that time – if no time limit – must be within reasonable time.

Ramsgate Victoria Hotel Co. Vs. Montefiore  - Offer made by M on June 8 - to take shares in R – Acceptance received on Nov 23 – beyond reasonable time – no valid acceptance.

5.      Cannot precede an offer – if precedes the offer – invalid acceptance

Example: Company allots shares without application – ignorant of the allotment, allottee applies for shares – allotment is invalid, as precedes the offer.

6.      Must indicate intention of acceptor to fulfil terms of promise- where acceptance by some specific act – that act must be done – e.g. Carlill Vs. Carbolic Smoke Ball Co.

7.      Must be communicated by person to whom offer has been made – acceptance by other person or unauthorised person is invalid

Boulton Vs. Jones – B purchased goods from H – H owed debt to J – J placed order on H – B supplied the goods intending to set off his debt against H – Invalid acceptance, as offer not made to B – no contract. 

8.      Must be given before offer lapses or is withdrawn

9.      Cannot be implied by silence : Felthouse Vs.Bindley  - F offered to his nephew to buy his horse – wrote “If I her no more about it, I shall consider the horse is mine” – nephew did not respond – told his auctioneer not to sell the horse as sold to his uncle – auctioneer inadvertently sold the horse – Acceptance of F’s offer not communicated to him – held no contract – F cannot claim damages from auctioneer.

a. Acceptance made subject to contract – no valid acceptance until contract signed.

b. Agreement to agree in future – no valid contract – merely intention

Loftus Vs. Roberts - actress engaged for certain period – agreement includes a clause – if show in London, payment of salary to be mutually agreed upon – no contract.