ACCEPTANCE

Acceptance
• Definition of Acceptance 2(b)
• Essentials
Meaning and Definition of Acceptance

Acceptance- ‘acceptare’ (Latin) —to accept, to assent.

To assent to a promise made by another.
 Act of receiving.
Offeree’s willingness to be bound by the terms of the offer.
A contract is created when an offer is accepted.
“Acceptance to offer is what a lighted match to a train of gunpowder,
it produces something which cannot be recalled or undone”
William Anson.
• “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” Sec,2(b).
• Acceptance is a consent or assent given to a proposal by the offeree.

Ex:- A offers to sell his house to B for Rs.60.00000/-. B accepts the offer
to purchase the house by paying 60.00000/-. A’s offer is said to be
accepted and it becomes a promise.
Who can accept?

An offer can only be accepted by the person to whom it has been
made.
ESSENTIALS OF VALID ACCEPTANCE
Essentials of valid Acceptance
1. Acceptance must be absolute and unconditional.
 There cannot be conditional acceptance.
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
Ex- A offers to sell his cycle to B for 10000/-. B says he accepts if
A will sell it for 8000/-. This does not amount to the offer being
accepted, it is a counteroffer.
Trollope & Colls Ltd. v. Atomic Power Constructions Ltd., 1963

 During Atomic Power Construction, the parties agreed to form a

contract based on the points they had agreed upon.
they continued to negotiate on the points they disagreed.

The question arose whether such a contract is valid?.

Held- that since the parties had not mutually agreed on all the
contract clauses, it could create future problems. Therefore, it was
not considered a valid contract.
Hyde v. Wrench
Fact: Hyde offered to sell his property to Wrench for
1000 pounds. Wrench in reply made an offer of 950
pounds. He refused this offer. Subsequently Wrench
wrote that he was prepared to pay 1000 pounds.
Judgement: The Court held that no contract had been
made between the parties because Wrench had rejected
the original offer.
A counter offer is thus no acceptance of Original offer.
2. 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.
 When the offeree accepts the proposal, he must have known that an
offer was made. He cannot communicate acceptance without
knowledge of the offer.
A mere mental acceptance is no acceptance.
Ex- 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.
Felthouse v. Bindley
Fact:-
Plaintiff offered to buy his nephew’s horse for 30 pound saying “if I
here no more about horse, I shall consider the horse as mine at 30
pound”.
Defendant did not reply, but told his auctioneer he was not selling the
horse, as it was sold to his uncle.
But the auctioneer sold it by mistake to a third party.
The plaintiff filed a suit against defendant.
Held- There was no communication of acceptance. Uncommunicated
acceptance does not result in a contract. Mere silence cannot be
regarded as acceptance of the offer.
Powell v. Lee
Fact-
The Board of managers of a school resolved to appoint Plaintiff as
Head master. But the resolution or decision was not communicated to
plaintiff.
One of the managers, in his individual capacity informed Plaintiff of
the same. But there was no official communication of the resolution by
the Board. Later,
The Board cancelled the resolution.
Held-in the absence of any authorised communication, there was no
completed contract. “information by an unauthorised person is as
insufficient as overhearing from behind the door”
• Brogden v. Metropolitan Rly. Co., 1877

• Brogden and Metropolitan Rly Co. had been doing business

informally without a formal contract. Later, the defendant created a
formal contract. They drafted a contract and sent it to Brogden.

• Brogden changed the contract and returned it but did not explicitly
communicate acceptance. Nevertheless, both parties continued their
business as usual.

• When a dispute arose, the validity of the contract was questioned.

• there was a valid contract between the parties. Even though
the acceptance was not communicated, the defendant’s
conduct indicated acceptance. The coal was delivered, and
payment was made according to the draft. Thus, the contract
was considered valid.
3. Acceptance must be according to the mode prescribed or
usual and reasonable manner.
If the offeror prescribed a mode of acceptance must given according
to the mode prescribed.
If the offeror prescribed no mode of acceptance, acceptance must
given according to some usual and reasonable mode.
If an offer is not accepted according to the prescribed or usual mode.
The proposer may within a reasonable time give notice to the offeree
that the acceptance is not according to the mode prescribed
If the offeror keeps quite he is deemed to have accepted the
acceptance.

Ex-if Mr Y offers to sell his car to Mr X and specifies that

acceptance must be through WhatsApp, but Mr X sends it via
email, it is not considered acceptable. Mr. Y is not obligated
to inform Mr. X that the acceptance was not communicated
through the specified mode.
Silence is Not Acceptance

• Mere silence cannot be considered as valid acceptance. The offeror

cannot state that silence will be deemed as acceptance.

• Ex- if Mr. Y offers to rent his apartment to Mr. X and mentions that if
Mr. X does not respond within one week, it will be assumed as
acceptance. If Mr. X does not reply within the specified timeframe, it
is not considered as acceptance because silence is not a valid mode of
communication for acceptance.
4. Acceptance must be given within a reasonable time
If any time limit is prescribed, acceptance must be given within the
prescribed time. If no time is specified, acceptance must be given
within a reasonable time.
Ramsgate Victoria Hotel CO. v. Monteflore
on July 8th M offered to take shares of a company. He received the letter
of acceptance on December 24th. He refused to take the shares.
Held-M was entitled to refuse.
5.Acceptance must be given only by the offeree
• 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.
• Boulton v. Jones.
 Fact:- Boulton bought Brocklehurst’s business
 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.
6. Acceptance must be after an offer

• The acceptor must be aware of the proposal at the time of acceptance.

Thus, acceptance must succeed the offer.
• Acceptance should follow the offer and not precede it.
Ex- In a company shares were allotted to a person who had not applied
for them. Subsequently when he applied for shares, he was unaware of
the previous allotment. The allotment of shares previous to the
application is Invalid.
7.A proposal once rejected cannot be accepted unless it is
renewed
• Offer once rejected cannot be accepted again unless a fresh offer is
made.
• In Hyde v. wrench-A counter offer terminated the original offer.
• A counter offer proposing different terms has the same effect as a
merely negative refusal, it is no less rejection of the original offer.
• An original offer superseded by the counter proposal made by the
other party and would not be received even if the maker of the
proposal rejects the counter-proposal.
8. Acceptance should be made while the offer is still subsisting.
• After the offer has been withdrawn or has lapsed, there is nothing which
can be accepted.
• it is necessary that the acceptance should be made while the offer is still alive
and subsisting.
Acceptance after the lapse of the offer cannot give rise to a contract.
Similarly, the offer is deemed to have ended by rejection of the original offer or a
counter offer. In such a case also, once the offer has lapsed an attempt to accept
the same would not give rise to any legal obligations.
9. Acceptance by performing conditions, or receiving consideration.
Sec,8 – Performance of the conditions of a proposal, or the acceptance of any
consideration for a reciprocal promise which may be offered with a proposal, is
an acceptance of the proposal”. In general offers, performance is expressly or
impliedly indicated as a mode of acceptance.
10. Acceptance cannot be implied from silence
Ex-A writes to B, I offer to sell my car for Rs.200000/- if you do not
reply I shall assume you have accepted the offer. Here there is no
contract because acceptance cannot be inferred or presumed from
silence.
Mental acceptance is not an acceptance
Ex- A tells B that he intends to marry C, but tells nothing to C of his
intention. There is no contract, even if C is willing to Marry A.