ACCEPTANCE

OF OFFER?
When Silence
amounts to
Acceptance?

Offer and Acceptance

A contract means an agreement
which is enforceable by law.
The most common way of making a
contract is through an agreement.
The two parties may agree to
something
through
mutual
negotiations. When one party makes
a offer and the other accepts the
same, there arises an agreement.

Essentials of a valid
acceptance
Acceptance should be communicated by
the offeree to the offeror.
Acceptance should be absolute and
unqualified.
Acceptance should be made in some usual
and reasonable manner, unless the
proposal
prescribes
the
manner
of
acceptance.
Acceptance should be made while the offer
is still subsisting.

Can silence amount to

acceptance
The general rule is that silence does not amount to an
acceptance.
The law would be unduly burdensome if it is imposed on
people an obligation to take positive steps to reject
unwanted offers.
Silence is by its nature, equivocal; it could be consistent
with a rejection; indifference to the offer or acceptance of
it.
There is, however, not an absolute rule that silence can
never amount to an acceptance. This means that there are
exceptions to this rule. For instance, if the offeror has
waived communication by indicating that acceptance may
be formed by silence or inaction, then under this situation,
the acceptance must be characterized by the presence of
the intention of the offeree to bind.

Effect of silence on a unilateral

contract
In a unilateral contract, performance of the
act constitutes the acceptance and there is
therefore no need to communicate the fact
that you are attempting to perform that act.
In a unilateral contract the offer demands an
action, eg : a reward for swimming across a
river. The other party has only to perform
the act and not to give a promise in return.
Carlill v. Carbolic Smoke Ball

Effect of silence on a bilateral

contract
In standard bilateral negotiations, the
general rule is that the offeror can not
waive the need for communication and
stipulate that silence will constitute
acceptance.
When a party has to promise or undertake
to do something, the requirement for the
notification of acceptance can not be
dispensed with.
Felthouse v. Bindley

Circumstances in which silence maybe indicative

of assent.

Silence alone on the part of the original offeror on receipt of a

counter-offer won't usually operate as an acceptance, but it might do
so in the case of a 'late acceptance' of an offer without definite time
limit, or where the original offeror only objects to some of the
additional terms contained in the counter-offer.
Where the offer is ambiguous, and the offeree communicates with
the offeror showing that he understood the offer in a particular
sense, this communication will probably amount to a counter-offer,
in which case, it could be that silence alone by the original offeror
will constitute his acceptance.
Where in pursuance of a request by another, goods or services are
supplied to him under such circumstances that the supply is an
offer, their receipt without notice of refusal by the offeree may
amount to an acceptance.

 There can be acceptance by mere conduct where the

offeree has waived communication of acceptance.
Where an offer to renew an insurance policy is sent to the insured on or
about its expiry date, the course of dealings between the parties may
justify the inference that the insurer's offer has been accepted,
notwithstanding that the offeree remains silent; but an unanswered
application for an insurance policy, that application being an offer,
probably won't lead to an inference of acceptance .
Where a periodical continues to be posted to a subscriber after expiry of
his subscription, the receipt and reading of the periodical may be an
acceptance.
Where the offeree having reasonable opportunity to reject
the goods or services derives any benefit from them, it will
amount an acceptance. Eg : A landlord served a notice to
the tenant demanding enhanced rent. The tenant did not
protest and continued to occupy the premises. This
conduct on the part of the tenant tacitly amounted to the
acceptance of the offer to pay the rent at a higher rate.

 Where contractor agrees to the extension subject to extra

payment on account of increased rates of materials or wages
but the govt. does not communicate its acceptance to it and
maintains its silence in spite of contractors reminder, the
contractor was held to be entitled to the increased rates.
When there has been a continuing course of dealing, silence
can be sufficient acceptance.
Where a part of the offer was disputed at a negotiation stage or
a amendment to the draft was suggested. It will probably
amount to a counter offer in which case it maybe that mere
silence of the original offeror will constitute his acceptance.
In view of the past dealings, the offeree has given the proposer,
reason to understand that silence was intended by the offeree
as a manifestation of assent, and the proposer does so
understand.
Where both parties have agreed that silence can be treated as
acceptance.

The second edition of American

restatement in section 69 provides:
Where an offeree fails to reply to an offer, his silence and
inaction operate as an acceptance in following cases only:
a. Where an offeree takes the benefit of offered services
with reasonable opportunity to reject them and the reason
to know that they were offered with the expectation of
compensation.
b. Where the offeror has stated or given the offeree the
reason to understand that assent maybe manifested by
silence or inaction, and the offeree in remaining silent or
inactive intends to accept the offer. Eg : Felthouse v.
Bindley
c. Where because of previous dealings or otherwise it is
reasonable that the offeree should notify the offeror if he
does not intend to accept. Eg : Ammons v. Wilson

Rust v. Abbey Life Assurance Co Ltd

The plaintiff had the policy in her possession
at the end of October, 1973. She raised no
objection to it of any kind until some seven
months later. Having regard to the facts of
this case and the history of transaction
between the parties. The inevitable inference
from the conduct of the plaintiff in doing and
saying nothing for seven months is that she
had accepted the policy as a valid contract
between herself and the defendants.

Brogden v. Metropolitan Railway Co.

The respondents were being supplied coal and coke for their
locomotives by the appellants for sometime without any formal
agreement for the same. The respondents sent a draft
agreement to the appellant leaving some blanks to be filled and
signed by the appellant. The appellant filled in the blanks,
changed certain words in the agreement after signing returned it
to the respondents. The respondents agent kept in the drawer
and thus no acceptance was communicated. The appellant
however supplied coal on the terms and agreements of the said
agreement. Subsequently there arose some dispute between the
appellants and the respondents. The appellant contended that
since the respondent did not communicate the acceptance, he
was not bound by the terms and conditions of the agreement.
The court held that mere silence does not amount to
acceptance, but along with the conduct of the parties, it clearly
showed that the parties had entered into
the contractual
relationship on the basis of the agreement signed by the
appellant.

Conclusion
While the general principle is that
there can be no acceptance of an
offer by silence, our law does in
exceptional
cases
recognise
acceptance of an offer by silence.
The
precise
scope
of
these
exceptions has not been judicially
established. (for further recognition
of the fact that there are exceptions
to the general rule, albeit that they
operate within very narrow limits)