Indian Contract Act

Session 3
Topics to be discussed



Legal Rules for the acceptance
General rules as to communication of acceptance



Classification of rules of
acceptance
Legal rules of acceptance General rules of acceptance
Such rules are to be legally
complied
Such rules are practically applicable, but
not necessarily mandatory by law.

Such rules mainly govern the conditions
of any acceptance
Such rules mainly focus on execution of
acceptance

Such rules are not subject to change Such rules may change in exceptional
situations

Such rules are not void, if does not
comply with general rules
Such rules may be void if does not
comply with legal rules

Legal rules for acceptance
Acceptance must be unconditional and not in variation in terms of an
offer
Example : A offers to sell his house to B for Rs. two lakhs. B accepts the
offer and promises to pay the price in four installments. This is not
acceptance as the acceptance is with variation in the terms of the offer.

Acceptance must be communicated
Example: The manager of Railway Company received a draft agreement
relating to the transportation of coal from a coal mining company. The
manager marked the draft with the words Approved and put the same in
the drawer of his table and forgot all about it. Hence, there was no
contract between the parties as the acceptance was not communicated.
Continued..
Manner of acceptance
Example: General rule say that it must be as per the manner prescribed
by offeror. If no mode is prescribed in which it can be accepted, then it
must be in some usual and reasonable manner.

If there is deviation in communication of an acceptance of offer, offeror
may reject such acceptance by sending notice within reasonable time. If
the offeror doesnt send notice or rejection, he accepted acceptance of
offer.
Example: Example: A offers B and indicates that the acceptance be given
by telegram. B sends his acceptance by ordinary post. It is not a valid
acceptance as A insisted for acceptance in the prescribed manner, which
has not been done by B.
Continued.

Acceptance of offer must be made by offeror, not by any unauthorized
person.
Example : A applied for the headmastership of a school. He was selected
by the appointing authority but the decision was not communicated to
him. However, one of members in his individual capacity informed him
about the selection. Subsequently, the appointing authority cancelled its
decision. A sued the school for breach of contract. The Court rejected the
As action and held that there was no notice of acceptance. Information
by unauthorized person is as insufficient.
Continued
Acceptance must be communicated to offeror or any authorized person.
Time limit for acceptance
-----If the offer prescribes the time limit, it must be accepted within specified time.
-----If the offer does not prescribe the time limit, it must be accepted within reasonable time.

Example : A applied for a product in the month of June, which is supposed to be delivered
by B by the end of July as per the specified time mentioned in the offer made by B.
However, B supplied the product to A in the month of November without showing any
reason. A denied to accept the same as the specified time limit has been over. So, no
acceptance occurred in the process.

Acceptance subject to the contract is no acceptance
If the acceptance has been given subject to the contract or subject to approval by certain
persons, it has not effect at all. Such an acceptance will not create binding contract until a
formal contract is prepared and signed by all the parties.



General Rules as Communication
of Acceptance

In case of acceptance by post
Where the acceptance is given by post, the communication of acceptance
is complete as against the proposer when the letter of acceptance is
posted. Thus, mere posting of letter of acceptance is sufficient to conclude
a contract. However, the letter must be properly addressed and stamped.

General Rules as to Communication of Acceptance
Where the letter of acceptance is posted by the acceptor but it never
reaches the offeror, or it is delayed in transit, it will not affect the validity
of acceptance. The offeror is bound by the acceptance.
Continued.
The time of Contract
In case of acceptance by post, the time of posting the letter of acceptance to the time of
contract. But in case of acceptance by instantaneous means of communication, the time of
contract is the time when the offeror gets the communication, the time of contract is the
time when offeror gets the communication of acceptance.

Communication of acceptance in case of an agent.
Where the offer has been made through an agent, the communication of acceptance is
completed when the acceptance is given either to the agent or to the principal. In such a
case, if the agent fails to convey the acceptance received from offeree, still the principal is
bound by the acceptance.

Acceptance on loudspeakers
Acceptance given on loudspeaker is not a valid a acceptance.

Continued.
Acceptance by telephones telex or tax
If the communication of an acceptance is made by telephone, tele-printer,
telex, fax machines, etc, it completes when the acceptance is received by
the offeror.

The place of Contract
In case of acceptance by the post, the place from where the letter is
posted is the place of contract. Where the acceptance is given by
instantaneous means of communication (telephone, fax, tele-printer, telex
etc.), the contract is made at the place where the acceptance is received,