What are the Rules of a Valid Acceptance?

• ACCEPTANCE

Acceptance means giving consent to the offer. It is an expression by the offeree of his willingness to be bound by the terms of the offer. According to Section 2(b) of the Indian Contract Act, 1872, “A proposal is said to be accepted when the person to whom the proposal is made signifies his assent thereto. A proposal when accepted becomes a promise.” In other words, an acceptance is the consent given to offer. Example X offers to sell his car to Y for Rs 1,00,000. Y agrees to buy the car for Rs 1,00,000. Y’s act is an acceptance of X’s offer.

• RULES FOR A VALID ACCEPTANCE

An acceptance to be valid must fulfil certain conditions which are dis­cussed below :

1.         Absolute and Unqualified According to Section 7(1) of the Indian Con­tract Act, 1872, “In order to convert a proposal into a promise, the acceptance must be absolute and unqualified.” It means, that an offer must be accepted a, it is without any reservation, variation or condition. A qualified and conditional acceptance amounts to marking of a counter offer which put, an end to the original offer and it cannot be revived by­ subsequent acceptance.

            Example  X offered to sell his car for Rs 1,00,000 to Y.and Y agreed to buy it for Rs 90,000. Y’s act is a counter offer & not an acceptance of X’s offer Now if Y accepts the original offer to buy the car for Rs 1,00,000, X will not be bound to sell the house because Y’s counter offer has put an end to the original offer. [Nihal Chand v. Amar Nath]

2.         Consequences of not accepting the offer in the prescribed manner: If the offer is not accepted in the prescribed manner, the offerer may approve or reject such acceptance. If the offerer wants to reject it, he must inform the acceptor within a reasonable time that he is not bound by acceptance because it is not in the prescribed manner. If he does not do so within a reasonable time the presumption will be that he doesn’t mind the offer being accepted in a different mode and will be bound by such acceptance.

            Example X ofAgra sends a letter by post to Y of Delhi offering to sell his car for Rs 1,00,000 and also writes “send your acceptance by tele­gram.” Y sends his acceptance by an ordinary letter. X can reject such acceptance on the ground that it was not accepted in the prescribed manner. But if he does not inform Y within the reasonable time, he shall be deemed to have accepted such acceptance and a valid contract will be formed between X and Y.

3.         Communication The acceptance must be signified (i.e. indicated or declared). In other words, the acceptance is complete only when it has been communicated to the offerer. A mere mental determination to accept is no acceptance in the eyes of law unless there is some external mani­festation of that determination by words or conduct.

            Example X offered to supply coal to a Railway Company. The manager of the company accepted the offer and put it in the drawer of his table and forgot all about it. It was held that no contract was made because acceptance was not communicated. (Brogden v. Metropolitan Railway Co.]

4.         Time Limit The acceptance must be given within the time prescribed (if any) or within a reasonable time (if no time is prescribed). What is reasonable time depends upon the facts and circumstances of the case.

            Example An offer to buy shares of a company was made in June but the acceptance was communicated in November, it was held that the offerer was not bound by the acceptance because the acceptance was not given within a reasonable time. [Ramsgate Victoria Hotel Co, v. Montefiore]

5.         Before Lapse of OfferThe acceptance must be given before the offer lapses or is withdrawn. In other words, if an acceptance is made after the lapse or withdrawal of the offer, it will not give rise to legal relations.

            Example X offered by a letter to sell his car for Rs 1,00,000. Subse­quently, X withdrew his offer by a telegram which was duly received by Y. After the receipt of telegram, Y sent his acceptance to X. In this case, the acceptance is invalid because it was made after the effective with­drawal of the offer.