RULES RELATING TO VALID ACCEPTANCE

RULES RELATING TO VALID ACCEPTANCE

By:- thelawiq.com Author:- B.Solomon Raju (2021-2026 Batch) Damodaram Sanjivayya national law University

Introduction:

Acceptance means agreeing to an Offer or giving consent/willingness to the offer. Offer and Acceptance plays a very important role in Contracts. All about Acceptance is defined in Chapter – I of Indian Contract Act 1872.

Valid acceptance

For saying it as Valid Acceptance there are certain requirements which need to be fulfilled and we will discuss it further in the coming sections.

Meaning and Definition

According to Section 2(b) of Indian Contract 1872 Acceptance is defined as “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” and to whom the promise is made is Offeror and by whom promise is made is called as Acceptor.

Explanation

Acceptance must be unconditional

When a person makes a proposal to someone then, he must accept it without imposing any condition and if he imposes any condition then it is not called as acceptance. It is called as Counter Offer.

Example: if B makes an offer to sell his phone for 5000 and if A want it to for 4000 then it is not Acceptance it is counter offer and not acceptance.

Acceptance must be in prescribed mode

When a person to whom a proposal is made, must communicate his/her acceptance within the prescribed mode only and not in any other way if he/she do in any other way rather than prescribed, then, it is the discretion of the Offeror to either accept it or reject. but if he wanted to reject it. He must do it at first instance only and later he cannot take this as a defence if dispute arises between them.

Example: If P asks Q to give his acceptance in the form of letter and if Q gives his acceptance in the form of telephone communication then it is not in prescribed mode

Acceptance must be in prescribed Time

When an offer or proposal is made to any person then he/she must communicate his/her acceptance within the prescribed time and not after that and if any time is not mentioned then it is said as reasonable time.

Example: if C asks D to send his acceptance to buy his Audi car before 2pm and if D communicates his acceptance at 5pm then it is not in Prescribed Time

Acceptance must be communicated

  • Acceptance must be in the knowledge of the offeree. When an offer is offered by the offeree then you have to communicate the same to the offeree. Without communicating the Acceptance to the offeree there will be no Contract Constituted.
  • According to section 3 of Indian Contract Act 1872 Communication, acceptance and revocation of proposals.—The communication of proposals the acceptance of proposals, and the revocation of proposals and acceptances, respectively, are deemed to be made by any act or omission of the party proposing, accepting or revoking by which he intends to communicate such proposal, acceptance or revocation, or which has the effect of communicating it.

Example: If M asks N to communicate his acceptance before 9pm and if he accepts it and don’t communicate then it is not acceptance because it is not communicated to the offeree.

Acceptance must be communicated to offeree

  • The acceptance must be given only to the Offeror and not to anyone else.
  • For, instance if it is Specific offer then it can be made by the specific person to whom the offer is given to.
  • In General offer anyone who fulfils the terms and conditions of the offer can communicate to offeree and that also should be communicated before any other party communicates it to offeree.

Example: If S asks R, to tell him. If he is interested in buying his Lamborghini car by 11am. and if R wants to buy that car but if he conveys it to S’s friend and not to S then it is not Acceptance.

Types of Acceptance

  1. Express Acceptance
  2. Implied Acceptance
  3. Conditional Acceptance

Express Acceptance

In this type of Acceptance the acceptance is conveyed through some written document or through verbal communication such as through phone or video call

Example: if P asks Q to tell her acceptance, then if she conveys it through document or by verbal then it is said to be express acceptance.

Implied Acceptance

Implied acceptance means a person accepts the offer by way of his conduct or behaviour. The way he behaves tells us that he has given his acceptance

Example: If A makes an offer to sell his car to B. Then, if B without saying anything agrees and pays the respective amount charged by A to buy his car, directly in his bank Account then it is called as Implied Acceptance.

Conditional Acceptance

In Conditional Acceptance, the acceptor agrees to the offer but asks to make some amendments and changes to the terms and conditions or any such matter to the offer basically it is said as Counter offer.

Example: if B makes an offer to sell his bike for 50000 and if A want it to for 40000 then it is not accepted it is a counter offer and Conditional acceptance.

Case laws

(1) In case of Balfour vs. Balfour (1919) “Mr. Balflour was a civil engineer who served as the Director of Irrigation for the Ceylon government (now Sri Lanka). When Mr. Balflour was on leave in 1915, they both returned to England, but Mrs. Balfour was unable to return to Ceylon with her husband owing to illness (arthritis). The husband promised to pay his wife 30 euros every month till she returned to Ceylon. Because her spouse failed to pay her the agreed-upon sum, she filed a lawsuit against him. The husband was found not guilty since there was no intent to form a legal relationship. there was no contract and there was no offer and acceptance”[1].

(2)In the case of Jones v Padavatton (1969) “Mrs. Violet Laglee Jones agreed to offer her daughter Mrs. Ruby Padavatton a monthly stipend of $200 if she gave up her employment in the United States and prepared for the bar exam in England. In 1964, the mother purchased a home and modified the arrangement by allowing the daughter to live in part of the house and rent the rest to fund her bills and maintenance. The parties had a falling out in 1967, and as a result, the mother filed an action for ownership of the residence. The mother’s claim was based on the premise that the agreement was not formed with the objective of establishing a legal relationship. It was held that there was no intention to create a legal relationship and gave possession to the mother”[2].

(3) “In the case of L’Estrange v Graucob (1934), a buyer signed a purchase agreement for a cigarette slot machine without reading the terms. One of the agreements exempted the company from accountability for any and all mechanical problems. The machine provided was defective, yet the supplier was not held accountable, according to the court”[3].

(4)In the case of Lalman Shukla vs. Gauri Dutt (1913) the plaintiff worked as a Munim for the defendant. Because the defendant’s nephew had gone missing, the plaintiff set out to find him. In the absence of the plaintiff, the defendant distributed handbills promising a reward of Rs 501 to anyone who could locate the youngster. The plaintiff was able to track him down and collect the award. When the plaintiff discovered the youngster, he was unaware of the handbills. The plaintiff was not entitled to a gift, according to the court”[4].

Conclusion

Finally if an offer is made to any person and if that person accepts it and complies all the above mentioned conditions then it is said to be Valid acceptance given to the offer and contract formed.

Endnotes

[1] Balfour v Balfour [1919] 2 K.B. 571 (25 June 1919).

[2] Jones v Padavatton [1968] EWCA Civ 4.

[3] L’Estrange v F Graucob Ltd [1934] 2 KB 394.

[4] Lalman Shukla vs. Gauri Dutt, 1913 40 ALJ 489.

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