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ACCEPTANCE

Section 2 (b): When the person to whom the proposal is made signifies his assent thereto, the proposal is said to be accepted. The proposal when accepted becomes a promise. Thus acceptance converts a proposal to a promise.

General rules for a valid acceptance

Acceptance must be given only by the person to whom the offer is made
Powell v. Lee Plaintiff was an applicant for the headmastership of a school. The managers passed a resolution appointing him, but the decision was not communicated to him. One of the members, however, in his individual capacity informed him. The managers cancelled the resolution and the plaintiff sued them. There must be notice of acceptance

contracting party in some way. Information by an

from the

unauthorised person is as insufficient as overhearing from behind the door. An offer made to a class may be accepted by any member of that class. An offer made to public can be accepted by any member of the public. Similarly, offer made to a single person should be accepted by him alone.

Acceptance should be absolute and unqualified


Acceptance should be absolute and unqualified acceptance of the terms of the offer. Any variation from the terms of offer would make the acceptance invalid. Partial acceptance is no acceptance.

In

1.
2. 3.

Hyde v. Wrench this case, an offer to sell a farm for 1000 pounds was rejected by the plaintiff, who offered 950 Pounds for it. This was turned down by the offeror and the plaintiff agreed to pay 1000 pounds. Held not a valid acceptanceThere was a counter offer, which had made the acceptance qualified The prior offer had lapsed when the counter offer was made. There was no acceptance at all

Acceptance should be in some reasonable manner and usual manner unless the proposal prescribes the manner in which it is to be accepted
Acceptance may be express or implied If a mode of acceptance is prescribed in the offer, the acceptor

has to follow it. If he deviates from that mode, the proposer may within a reasonable time after the acceptance is communicated to him, insist that his proposal may be accepted in the prescribed manner. Failing which it is presumed that he accepts the acceptance. Eliason v. Henshaw A offered to buy flour from B requesting that acceptance should be sent by the wagon that brought the offer. B sent his acceptance by post, thinking that it would reach the offeror more speedily. But the letter arrived after the time of the wagon. A was held not to be bound by the acceptance. Where no mode is prescribed, acceptance should be in an usual and reasonable manner. Mail is a very reasonable manner in such cases.

Silence is not acceptance


B was supplying coal to the railway company
Brogden v Metropolitan Railway co.

without any formal agreement. Later agents met and drafted an agreement as per Bs wish. B continued supplying coal on the new terms and conditions. The Rly.co. also started to pay and deal as per the new terms with B. He sent in a signed copy of agreement , which co. agent also signed but kept in his drawer. No communication of acceptance. Still company was held to be bound because they acted as per the terms and conditions of Bs proposal

Acceptance must be communicated by the offeree


Acceptance should be by the offeree or under his authority Powell v. Lee

Acceptance must be given within a reasonable time or within the prescribed time before the offer lapses
An offer cannot be kept open beyond

a reasonable time. Acceptance should not precede offer. E.g. Allotment of shares before the application by the allotee. Rejected offers can be accepted only after renewing it. E.g. counter proposals Hyde v. Wrench

Communication of offer, acceptance & Revocation


In the case of instantaneous communications, as the proposer and offeree are face to face each other or talking to each other, it is easy to ascertain when the communication is complete. But when they are at distant places and communication is by post, it is difficult to ascertain when the communication of offer, acceptance and revocation is complete. So in such cases the following rules apply-

Communication of offer
The communication of offer is complete when it comes

to the knowledge of the person to whom it is made. i.e. when the letter of offer reaches the offeree. Hence, before that at any time offeror can revoke the offer

Communication of acceptance
1. As against the proposer: when the letter of acceptance is put in due course of transmission to him, so as to be out of the power of acceptor. i.e. when it is posted by the acceptor. Hence he can revoke the proposal at any time before the letter of acceptance is posted by the acceptor

A proposal may be revoked at any time

before the communication of acceptance is complete as against the proposer and not afterwards

E.g.: A proposes by a letter by post to sell his house to B. B accepts the proposal by a letter sent by post. A may revoke his proposal at anytime before the letter of acceptance is posted and not afterwards.

2. As against the acceptor: when the letter of acceptance comes to the knowledge of the proposer. i.e. when it reaches the proposer. So the acceptor can revoke the acceptance at any time before the letter of acceptance reaches the proposer.

An acceptance may be revoked at anytime before the communication of acceptance is complete as against the acceptor and not afterwards E.g.: A proposes by letter sent by post, to sell his house to B. B accepts the proposal by a letter sent by post. B may revoke his acceptance at anytime before the letter of acceptance reaches A and not afterwards

Communication of revocation
1. As against the person who makes it: when the letter of revocation is put into due course of transmission to the person to whom it it was intended. i.e. when it is posted. 2. As against the person to whom it is made: when it comes to his knowledge. i.e. when he receives the revocation letter

COMMUNICATION OF ACCEPTANCE
The assent should be signified. E.g.: a common instance of communication of acceptance is the falling of the hammer at an auction sale. A mere mental determination is not sufficient. An overt or express act or omission is necessary to constitute a valid acceptance.

ACCEPTANCE BY CONDUCT- implied or tacit acceptance


Section 8: the performance of the conditions of a proposal, of the acceptance of any consideration for a reciprocal promise which may be offered with a proposal, is an acceptance of the proposal. D offered the payment to P on the condition that it should be in full satisfaction of the claim. P accepted the payment. P cannot subsequently say that he accepted it in part satisfaction ad sue for the balance.

Communication to offeror himself Acceptance must be communicated to offeror himself. Offer cannot impose burden of refusal
Felt house v Bindley

Plaintiff sent a letter to his nephew to purchase his horse. It said If I hear no more about the horse, I consider the horse Mine at 33.15 pounds. The nephew told defendant, auctioneer not to sell this horse as it was already sold to his uncle. The defendant put up the horse for auction and sold it. The plaintiff sued the defendant. Held that communication of acceptance should be to the offeror himself

Partial acceptance is no acceptance


Acceptance with a condition subsequent is a valid acceptance. Thus when the acceptance said, terms accepted, remit cash down Rs. 25000 by Feb 5th, otherwise the acceptance subject to withdrawal, this was not a counter proposal, but an acceptance with a condition or a warning that if the money was not sent the contract would be deemed to be broken. Even a counter proposal can be accepted if the proposer agrees to the new terms.

Provisional acceptance is not an acceptance


Union of India v Narain Singh :

Auction sale of liquor shop. Conditions said that the bid shall be subject to the confirmation of the chief commissioner. There will be no final contract till the acceptance of the highest bid is confirmed by the Chief Commissioner. The person whose bid has been provisionally accepted is entitled to withdraw his bid.

Instantaneous communications
When I shout an offer at a man at the other side of

the river. An aircraft passes by and I do not hear his reply. Decide? I am speaking to the person whom I offered something via telephone. Before I could get his reply the phone is dead. Decide?

In the case of instantaneous communications, offer and acceptance are communicated in reciprocity. It happens one after the other. Offer and acceptance are complete when it comes to the knowledge of the person to whom it was intended. But when communication is by post, contract is completed when the letter of acceptance is posted.

Anson: Acceptance is to offer as a lighted match stick to a train of gun powder


William Ansons observation though valid in the English

context doesnt hold good in India since in India acceptance is revocable.

Acceptance once complete gives rise to contractual

obligations. The offer has to be revoked before acceptance is complete as against the proposer. In the same way acceptance has to be revoked before it comes to the knowledge of the offeror.