Acceptance

By Damodar Hake
Asst. Prof. SLS-P
Introduction
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 Who Can Accept?
❖Acceptance of Specific offer:
An offer can be accepted only by the person or persons to whom it is
made. An offer made to a particular person (specific offer) can be
accepted only by him and none else. The rule of law is that if A wants
to enter into a contract with B, then C cannot substitute himself for B
without A's consent.
In Boulton v. Jones,
A sold his business to B but this fact was not known to an old
customer C. C sent an order for goods to A by name. B supplied the
goods to C. It was held that there was no contract between B and C,
because C never made any offer to B.
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❖Acceptance of General offer:
If an offer is made to the world at large (general offer) any person
can accept the offer provided he has the knowledge of the offer.
In Carlill v. Carbolic Smoke Ball Co's
the lady accepted the offer by using the smoke balls. Similarly, in
case a reward has been offered for giving information about
missing person or a lost article, any person who gives the necessary
information first, shall be entitled to the reward.
 Legal Rules/ Essential characteristics of
Acceptance
1. Acceptance must be absolute and unqualified (Sec 7(1)):
• a) Also an acceptance with a variation is no acceptance. It is simply a
counter proposal which shall have to be accepted by the original
proposer before a contract can be deemed to have come into existence.
• b) A counter proposal is the offer by the offeree and can result in a
contract only if it is accepted by the other party.
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2. The acceptance must be expressed in some usual or reasonable manner (Sec.7(2)):
a) Where the mode of acceptance is prescribed in the proposal, it must be accepted in
that manner.
b) But if the proposer does not insist on the proposal being accepted in the manner
prescribed after it has been accepted otherwise, i.e., not in the prescribed manner, the
proposer is presumed to have consented to the acceptance.
c) If acceptance is not communicated according to the mode prescribed, it is called
deviated
acceptance. Even in such a case acceptance is not invalid.
d) Law imposes a duty on the offeror to reject such acceptance within a reasonable
time. If he fails to do so, he becomes bound by the acceptance
E.g.: If the Offeror prescribes acceptance through messenger and offeree sends
acceptance by email, there is no acceptance of the offer if the offeror informs the
offeree that the acceptance is not according to the mode prescribed there will not be
valid acceptance. But if the offeror fails to do so, it will be presumed that he has
accepted the acceptance and a valid contract will arise.
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3. An acceptance must be communicated to the offeror
Brogden v Metropolitan Railway (1877) 2 App Cas 666
The complainants, Brogden, were suppliers of coal to the defendant, Metropolitan
Railway. There was no written contract between the complainant and the
defendant. However, the parties decided that it would be best for a formal contract to
be written for their future business dealings. The Metropolitan Railway made a draft
contract and sent this to Brogden to review. The complainant made some minor
amendments to this draft. He sent this amended document back to the defendant.
Metropolitan Railway filed this document, Manger of Railway entered remark
Approved and kept in his drawer and by oversight never communicated acceptance of
the amended contract to the complainants. Meanwhile, the business deals continued
and Brogden continued to supply coal to the Metropolitan Railway.
The House of Lords held that there was a valid contract between suppliers, Brogden
and the Metropolitan Railway, although there had been no communication of
acceptance, performing the contract without any objections was enough.(Implied
Acceptance)
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4. It Must be given Within Reasonable Time
Ramagate Victoria Hotel Co. v. Montefiore
Where an offer to buy shares of a company was made in June but the acceptance was
communicated in November, it was held that acceptance was not given within a
reasonable time and the offer had elapsed.
5. Mere silence is not acceptance:
The acceptance of an offer cannot be implied from the silence of the Offeree or his
failure to answer, unless the Offeree has in any previous conduct indicated that his
silence is the evidence of acceptance.
E.g.: ‘A’ subscribed for the weekly magazine for one year. Even after expiry of his
subscription, the magazine company continued to send him magazine for five years.
And also ‘A’ continued to use the magazine but denied to pay the bills sent to him. ’A’
would be liable to pay as his continued use of the magazine was his acceptance of the
offer.
6. Acceptance cannot precede to an offer
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7. Where the Offeree (having reasonable opportunity to reject the offered
goods or services) enjoys or avails the benefits of goods or services, it will be
regarded as acceptance.
8. Acceptance must be given by the party to whom the offer is made or by
his duly authorized agent.
Boulton vs. Jones (1857)
Boulton bought a business from Brocklehurst. Jones, who was Broklehurst’s
creditor, placed an order with Brocklehurst for the supply of certain goods.
Boulton supplied the goods even though the order was not in his name.
Jones refused to pay Boultan for the goods because by entering into the
contract with Blocklehurst, he intended to set off his debt against
Brocklehurst. Held, as the offer was not made to Boulton, therefore, there was
no contract between Boulton and Jones.
In case of a general offer, it can be accepted by any person who has the
knowledge of the offer. [Carlill vs. Carbolic Smoke Ball Co. (1893)]
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9. It can not be implied by silence/ Mental Acceptance/ statement of price is not
amount acceptance:
-Powel vs. Lee
(Powel was candidate for the post of Principal in School, He appeared in front of
selection committee for interview , no official communication, one of the committee
member informally informed that the selection committee has proposed to appoint
him as principal, committee later on selected some other candidate )
-Harvey v. Facey
10. Acceptance must be given before the offer lapses or revoked
11. Acceptance must be with full knowledge and once it given it is presumed
accepted all the terms and conditions of the offer
L’Estrange v Graucob (1934)
A buyer signed an agreement for the purchase of a cigarette vending machine
without reading its terms. One of the terms excluded liability for all kinds of defects in
the machine. The machine supplied was defective but the court held that the supplier
was not liable.
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12. An action without the knowledge of the offer is not acceptance
- Lalman Shukla V. Gauri Datta

13. An offer once rejected, can not be accepted until it is renewed

 COMMUNICATION OF OFFER AND ACCEPTANCE
❖Communication when complete:
Communication of an Offer
According to Section 4 of the Contract Act, the communication of an offer is
complete when it comes to the knowledge of the person to whom it is made
i.e., when the letter containing the offer reaches to the offeree.
For example: A of Pune sends a letter by post to B of Bombay offering to sell his
house for Rs. 20 lakh. The letter is posted on March 5th ,2021, and this letter
reaches B on March 7th, 2021. The communication of the offer is complete on
March 7th 2021.
In the above example, if the letter containing the offer never reaches to B, but B
comes to know about the offer from some other source and sends his
acceptance, it will not amount to proper communication of the offer and so no
contract will arise.
-Powel vs. Lee
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Communication of Acceptance
The rules regarding communication of acceptance has to be studied from the
point of view of offerer and as well as the offeree because the communication
of acceptance is complete at different times for the offerer and the offeree.
According to Section 4 of the Contract Act, the communication of acceptance is
complete :
(a) as against the proposer/ offerer, when it is put in a course of transmission to
him, so as to be out of the power of the acceptor, and
(b) as against the acceptor, when it comes to the knowledge of the proposer/
offerer.
Thus, the offerer becomes bound by the acceptance as soon as the letter of
acceptance is duly posted by the acceptor, but the acceptor is bound by his
acceptance only when the letter of acceptance reaches the offerer.
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In the above example if B (offeree) of Bombay sends his acceptance
by post on March 10th 2021, the communication of acceptance is
complete against A(offerer) on March 10th 2021 i.e., when the letter
of acceptance is posted,
But the communication of acceptance shall be complete as against B
(offeree) only when this letter reaches to A(offerer).Suppose
A(offerer) receives the letter of acceptance on March 12, at 2:00
p.m. then B (offeree) will be bound by his acceptance on March 12
only.
In other words, the law has given a chance to the acceptor to revoke
his acceptance, if desires to do so, he has to revoke acceptance by
applying any suitable speedier way.
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Effect of the Loss of letter of Acceptance in Postal Transit:
It is quite interesting to note that a valid contract arises even if the letter of
acceptance is lost in transit or is delayed. The offerer will be bound by the
acceptance only when the letter of acceptance was correctly addressed,
properly stamped and actually posted.
Thus, if the acceptance letter is not correctly addressed, it will not be binding
upon the offerer.
in Dunlop v. Higgins(1849, 1 HLC 381)
Lord Cottenham L.C Observed that “ If the letter of acceptance is posted duly
stamped, addressed that to within due time, then the acceptor is not bound for
any causalities in the post office”
Reason: Acceptor will not be responsible because he has not control over the
act after posting the letter of acceptance in post.
 REVOCATION OF OFFER AND ACCEPTANCE: Sec.
5
•Revocation means ‘taking back’ or ‘recalling’ or ‘withdrawal’.
•Offer may be revoked at any time before the communication of
its acceptance is complete as against the offerer, but not
afterwards.
•An acceptance may be revoked at any time before the
communication of the acceptance is complete as against the
acceptor, but not afterwards.
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Illustrations:
A proposes, by a letter sent by post, to sell his house to B. The letter
is posted on 1st September, 2022. B accepts the proposal/ offer by a
letter sent by post. The letter is posted on 4th September, 2022. The
letter reaches to A on 6th September, 2022.
A may revoke his proposal at any time before or at the moment when
B posts his letter of acceptance i.e. 4th September, 2022, but not
afterwards.
B may revoke his acceptance at any time before or at the moment
when the letter communicating it, reaches to A, i.e. 6th September,
2022 but not afterwards.
Contracts over telephone or telex or oral
Communication
•It has same effect as the oral agreements entered between the
parties
Kanhaiyalal v. Dineshwara Chandra(AIR 1959, M.P 234)
- Held: Offeree must ensure that his acceptance is properly
communicated to offerer
Illustration:
A makes offer to across a river. B shouts back accepting A’s offer, but
A does not hear the reply of B as it was drowned by an Aircraft flying
overhead. If B wishes to make a contract , he must wait till the
aircraft has gone and then shout back his acceptance so that A can
hear what B says. Thus, until A hears B’s reply, there is no contract.
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Entores v Miles Far East Corporation, (1955, 2 All ER 493)
-Telephone line dead while having conversation

Bhagwan Dass Kedia v. Girdharilal (AIR 1966, SC 543)

Supreme Court endorsed the principle in Entores
 Modes of Revocation/ Lapse of the Offer
Sec. 6
•Revocation how made.—A proposal is revoked—
(1) by the communication of notice of revocation by the proposer to
the other party;
(2) by the lapse of the time prescribed in such proposal for its
acceptance, or, if no time is so prescribed, by the lapse of a
reasonable time, without communication of the acceptance;
(3) by the failure of the acceptor to fulfil a condition precedent to
acceptance; or
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(4) by the death or insanity of the proposer, if the fact of his death
or insanity comes to the knowledge of the acceptor before
acceptance.
(5) If a Counter offer is made to original offer
(6) If offer is not accepted in a manner prescribed by the offerer in
offer
(7) Subsequent change in law or Subsequent change in
circumstances.