ACCEPTANCE

INDIAN CONTRACT ACT,1872

 DEFINITION

S.2(b) – ICA-
• When the person to whom the proposal or
offer is made;
• Signifies his assent (acceptance) thereto;
• The proposal (offer) is said to be accepted.
• Acceptance means, in general, the expression
of assent or consent to the proposal (offer) by
the offeror.
• An offer or proposal will be converted into a
promise only when it is accepted by the
offeree.
• Offer and acceptance in a contract are like the
two sides of a coin and the absence of any
one will not create any contractual
relationship between the parties.
 HOW ACCEPTANCE IS MADE?
• Express Acceptance: Acceptance made by
words spoken or written.
• Implied Acceptance: Acceptance made by
conduct.
 WHO CAN ACCEPT?
• An offer can be accepted only by the person
to whom it is made.
• Therefore, when A makes an offer to B, C
cannot accept it.
ESSENTIALS OF A VALID
ACCEPTANCE (S.7)
• There should not be any variation in terms
while accepting the offer.
• If there is any variation in terms or addition
of certain terms to the original offer, it is not a
valid acceptance. But, it will only amount to a
counter offer.
• Example: A says to B “ I offer to sell my
house for Rs.5 lakh”. B replies, “ I will
purchase it only for Rs.2 lakh”. This is
not an acceptance but only a counter
offer. In other words, it is only a partial
acceptance. Partial acceptance is no
acceptance at all.
 Example: M offered to sell a piece of
land to N at £ 280. N accepted and
enclosed £ 80 with a promise to pay
the balance by monthly installments
of £ 50 each. Held, there was no
contract between M and N, as the
acceptance was unqualified. [Neale v.
Merret, (1930) W.N.189].
 ACCEPTANCE MUST BE
COMMUNICATED TO THE OFFEROR

• If the offeree remains silent and does nothing

to show that he has accepted the offer, no
contract is formed.

• The offeree must do something to signify his

intention to accept.
• Acceptance must be communicated to the
offeror himself. A communication to any other
person is as if no communication has been
made.
• Examples: A tells B that he intends to
marry C, but tells C nothing of his
intention. There is no contract, even if
C is willing to marry A.
ACCEPTANCE MUST BE MADE WITHIN
THE TIME ALLOWED

• Acceptance must be made within the time

allowed by the offeror.
• If no time is specified, it must be made within
a reasonable time.
• Acceptance made after the offer has been
withdrawn is invalid.
 ACCEPTANCE MUST BE
COMMUNICATED IN THE MODE
PRESCRIBED
• If the offeror prescribes a particular manner of
acceptance it shall be given in that form.
• If the offeror prescribes no particular manner
it shall be given in some usual and reasonable
manner.
• Example: A makes an offer to B and says: “If
you accept the offer, reply by wire”. B sends
the reply by post. It will be a valid acceptance
unless A informs B that the acceptance is no
according to the mode prescribed.
 ACCEPTANCE MAY BE EXPRESS OR
IMPLIED
• When acceptance is made by word spoken or
written, it is an express acceptance.
• When acceptance is made by conduct it is an
implied acceptance.

Example: When a person goes to a hotel and

eats some food, he impliedly accepts to pay
for it.
ACCEPTANCE MUST BE MADE BY THE
OFFEREE
• Acceptance must be made only by the person to
whom the offer is made and not by others.
• If it is accepted by another then there is no valid
acceptance.

Example: When the offer is made by A to B the

acceptance of the offer by C would be
inoperative.
 ACCEPTOR MUST BE AWARE OF THE
PROPOSAL AT THE TIME OF THE
OFFER
• If the acceptor is not aware of existence of the
offer and conveys his acceptance, no contract
comes into existence.
• An act done in ignorance of the offer of a
reward, cannot be the acceptance of that
offer.
• Example: S offered a reward to anyone who
returned his lost dog. F brought the dog to S
without having heard of the offer. Held, F
was not entitled to the reward. [Fitch v.
Snedaker, (1868) 38 N.Y. 288]
 ACCEPTANCE MUST BE MADE ONLY
AFTER THE OFFER IS MADE
• There can be no acceptance at all before the
communication of an offer.
• Example: In a company, shares were allotted
to a person who had not applied for them.
Subsequently, when he applied for shares, he
was unaware of the previous allotment. The
allotment of shares previous to the
application is invalid.
 ACCEPTANCE CANNOT BE IMPLIED
FROM SILENCE
• The acceptance of an offer cannot be implied
from the silence of the offeree or his failure to
answer, unless the offeree has by his previous
conduct indicated that his silence means that
he accepts.
• Example: A wrote to B, “ I offer you my car
for Rs. 50,000. If I don’t hear from you in
seven days, I shall assume that you accept.”
B did not reply at all. There is no contract.
AGREEMENT TO AGREE IN FUTURE IS
NO ACCEPTANCE
• If the parties have not agreed upon the terms of
their contract but have made an agreement to
agree in future, there is no contract.
• Example: An actress was engaged by a theatrical
company for a certain period. One of the terms of
the agreement was that if the play was shown in
London, she would be engaged at a salary to be
mutually agreed upon. Held, there was no
contract [Loftus v. Roberts, (1902) 18 T.L.R. 532]