Legal Rules Regarding a valid Acceptance

A valid acceptance must be in conformity with the following rules.

1.    Acceptance must be given only by the person to whom the offer is made.

An offer can be accepted only by the person or persons to whom it is made and with whom it imports an intention to contract. It cannot be accepted by another person without the consent of the offeror. The rule of law is clear that “ if you propose to make a contract with A. then B can’t substitute himself for A without your consent.” An offer made to a particular person can be validly accepted by him alone. Similarly an offer made to a class of person s (i.e., teachers) can be accepted by any member of that class. An offer made to the world at large can be accepted by any person who has knowledge of the existence of the offer.

Let us suppose A sold his business to his manager B without disclosing the fact to his customers. C, a customer, who had a running account with A, sent an order for the supply of goods to A by name. B received the order and executed the same. C refused to pay the price. It was held that there was no contract between B and C because c never made any offer to B and as such C was not liable to pay the price to B (Boulton vs. Jones). I will give you another example. In Felthouse vs Bindley the nephew intended his uncle to have the horse but had not communicated this to the uncle, instead he told the auctioneer not to sell the horseas it was already sold to his uncle. It was thereby held that the communication to a stranger like the auctioneer in this would not do. A communication to any other person is no communication in the eyes of law. The offeror cannot say that if no answer is received in a certain time the offer is deemed to be accepted. Mere silence is no acceptance of the offer.

2.     Acceptance must be absolute and unqualified [sec. 7(1)]. In order to be legally effective it must be an absolute and unqualified acceptance of all the terms of the offer. Even the slightest deviation from the terms of the offer makes the acceptance invalid. In effect a deviated acceptance is regarded as a counter offer in law.

Illustration. L offered to M his scooter for Rs. 4,000 M accepted the offer and tendered Rs. 3,900 cash down, promising to pay the balance of Rs. 100 by the evening. There is no contract, as the acceptance was not absolute and unqualified.

3.     Acceptance must be expressed in some usual and reasonable manner, unless the proposal prescribes the manner in which it is to be accepted. [sec. 7(2)]. If the offeror prescribes no mode of acceptance, the acceptances must be communicated according to some usual and reasonable mode. The usual modes of communication are by word spoken or written or by conduct, it is called an implied or tacit acceptance. Implied acceptance may be given either by doing some required act, for example, tracing the lost goods for the announced reward, or by accepting some benefit or service, for example, stepping in a public bus by a passenger.

If the offeror prescribes a mode of acceptance, the acceptance given accordingly will no doubt be a valid acceptance, even if the prescribed mode is funny. Thus, if an offeror prescribes lighting a match as a mode of acceptance and the offeree accordingly lights the match, the acceptance is effective and complete. But what happens if the offeree deviates from the prescribed mode? The answer to this query is given in section 7(2) itself which states that in cases of deviated acceptances ‘the proposer may, within a reasonable time after the acceptance is communication to him, insist that his proposal shall be accepted in the pre­scribed manner, and not otherwise; but, if he fails to do so, he accepts the (deviated) acceptance.”

Mental acceptance ineffectual. Mental acceptance or quiet assent not evidenced by words or conduct does not amount to a valid acceptance, and this is so even where the offeror has said that such a mode of acceptance will suffice. Acceptance must be communicated to the offeror, otherwise it has no effect. Thus, if an oral acceptance is spoken into a telephone after the telephone has gone dead, there is in effect no acceptance. This rule is based on the theory of consensus ad idem or of identity of minds. Unless the acceptance of the offer comes to the knowledge of the offeror, there is no identity of mind and therefore no contract.

(a)   A person received an offer by letter. In reply he wrote a letter of acceptance. Put the letter in his drawer and forgot all about it. Held, this uncommunicated acceptance did not amount to acceptance and so did not complete the contract. (Brogden vs. Metropolitan Rly co) 4.     Acceptance must be communicated by the acceptor. For an acceptance to be made it should be made by the offeree but must also be communicated by, or with the authority of, the offeree (or acceptor) to the offeror.

In the landmark case of Powell vs. Lee, P was a candidate for the post of headmaster in a school. The managing committee of the school passed a resolution selecting him for the post. A member of the managing committee, acting in his individual capacity, informed P that he had been selected, but P received no other intimation. Subsequently, the resolution was cancelled, and P was not appointed no other intimation. Subsequently, the resolution was cancelled, and P was not appointed to the post. P filed a suit against the committee for breach of contract. The court held that in the absence of an authorized communi­cation form the committee there was no binding contract.

5.     Acceptance must be given within a reasonable time and before the offer lapses and/or is revoked. To be legally effective acceptance must be given within the specified time limit, if any, and if no time is stipulated, acceptance must be given within a reasonable time because an offer cannot be kept open indefinitely (shree Jaya Mahal cooperative Housing society vs. Zenith chemical works pvt. Ltd.) where M applied for certain shares in a company in June but the allotment was made in November and he refused to accept the allotted shares. It was held that the offeror M could refuse to take shares as the offer stood withdrawn and could not be accepted because the reasonable period during which the offer could be accepted had elapsed (Ramsgate Victoria Hotel co. vs. Monteforte). Again the acceptance must be given before the offer is revoked or lapses by reason of offeree’s knowledge of the death or insanity of the offeror.

6.                Acceptance must succeed the offer. Acceptance must be given after receiving the offer. It should not precede the offer. In a company shares were allotted to a person who had not applied for them. Subsequently he applied for shares being unaware of the previous allotment. It was held that the allotment of shares previous to the application was invalid.

7.                Rejected offers can be accepted only, if renewed. Offer once rejected cannot be accepted again unless a fresh offer is made (Hyde vs. Wrench).

 Rules Regarding Acceptance

 Communication and Revocation of Acceptance

 Instances in which the rule of Quantum Meruit is applied. What is meant by Champerty?

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