Acceptance under the Indian Contract Act Is one of the main essentials for a valid contract. An agreement that fulfils all the necessary conditions given under the Indian Contract Act to form any type of contract must have the acceptance of the offer. The acceptance of an offer enables the parties to come into a written contract between the parties who has the capacity to contract with each other. however, there is no need to accept the general offer made by a party because the general offer is accepted by the conduct of the person. Best article on acceptance under Indian Contract Act he will discuss the definition of acceptance and main essentials of the acceptance.
For the formation of a contract, the main essentials are:
If any agreement meets these requirements, the agreement becomes a contract and enforceable by law.
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Acceptance under the Indian Contract Act
Section 2(b) of the Indian Contract Act gives the definition of acceptance. According to the section, when a party to whom the proposal has been made, Signified consent to accept the offer or proposal, The proposal or offer is said to be accepted by that party.
There are two parties in a contract in which a person who gives the offer to a person to make contact with him on specified terms and conditions is called the offerer. And the person to whom the offer makes an offer is called the offeree.
So, in simple words, when the offeree accepts the proposal made by the offeror, it is called acceptance. Acceptance means that the offeree is ready to enter into the contract with the offerer.
For example, Rahul offers Shyam to buy his car for the amount of $2000. Shyam accepts his offer and sells his car for the same amount to him. In this example buy the car, where’s the offer, $2000 is a consideration. And when Shyam accepts his offer it becomes an acceptance of the offer made by Rahul to him.
Status of offer after acceptance
An offer made by a person to another person does not create any legal obligations for the offeror and offeree until the offeree accepts the offer. But when the offeree accepts the offer, it becomes a promise towards the offeror. The promise creates a legal obligation between both parties and it becomes irrevocable.
Types of acceptance under the Indian contract Act
There are three types of acceptance given under the Indian Contract Act. The acceptance can be classified as absolute acceptance and conditional acceptance. The person accepting the offer made by another person without making any changes in the terms and conditions of the offer is known as absolute acceptance or general acceptance. However, if a person needs some changes in terms and conditions of the offer made by another person before accepting the offer, it is called conditional or qualified acceptance.
These types of acceptance define how a person can give his acceptance for an offer made by the offeror. It is very important for the offeror to know about the types of acceptance so that he can perform the contract according to the acceptance types.
An express acceptance is a clear intention of a person to accept the offer. The express acceptance may be written or oral by the offeree. In express acceptance, the offeree can express his acceptance by his words or by writing a letter, email or anything to the offeree by saying that he is accepting his offer on the same conditions given by him in the offer.
In ignition where both the parties to the contract are face to face, then dick communication related to the offer in which one party accept the offer of another party orally is valid acceptance and if the parties are at different places, then they can accept the offer through the post, telegram or any other reasonable way.
For example, Ankit makes an offer to Ajay to buy his house for 10 lakh rupees. Ajay sends a letter by post to Ankit that he is accepting his offer. This is an example of expressed acceptance because Ajay gave his acceptance by sending the letter in writing. Also, if Ajay made the call to Ankit that he is accepting his offer and ready to sell his house at the same price, it is also an example of expressed acceptance because in which he is giving his acceptance orally.
The acceptance may be implied also. When the offeree conveyed his acceptance through his conduct, behaviour or any other manner is called implied acceptance. In implied acceptance, the offeree doesn’t give his acceptance orally or in writing but he acts in a way that shows his acceptance towards the offer made by the offeror.
For example: in an auction of selling goods, a person made the offer that he is ready to buy those goods in the amount of 7lakh rupees. The auctioneer struck the hammer thrice in order to accept his offer. The striking of a hammer thrice is the act done by the auctioneer in order to give his acceptance. Also,
Buying a product from a supermarket is also an example of implied acceptance.
When the offeree is willing to accept the offer given by the offeror on some changes in the terms and conditions of the agreement or he is willing to accept the offer on the occurring of some events.
The conditional acceptance is a qualified acceptance because the law allows the person to do conditional acceptance for an offer made by the offeror. A conditional acceptance is very useful for the party if the party is not sure how the situation will turn out after some time.
We can see conditional acceptance in two ways:
- Changes in the terms and conditions
- the occurring of some event
When the person is willing to accept the offer by changing some terms and conditions, it becomes a counter-offer. In this situation, the offeror becomes the offeree because now he has to accept the new terms and conditions.
Conditional acceptance or conditional acceptance can be of many types on the base of:
- Related to Place- any acceptance which can be done in a specific place only.
- Related to Amount- in which the person gives the condition that he can pay a certain amount of money only. For example, if A made the offer to B that he will sell his car to B for $50000. But B said that he can pay $40000 only.
- Related to Time- in this type, the offeree is willing to accept the offer at a specific time.
- By some only- In an offer where there is more than one offer, some accepted the offer and some are willing to accept the offer yet.
- Instalment pay- In this type of acceptance, the person makes the counter-offer to the offeror that he can pay the consideration in instalments.
General rules for a valid acceptance
For an acceptance to be valid it must be fulfilling its rules given under the Indian Contract Act.
Acceptance should be given to the offerer
According to the rule given under the act, in a specific offer, the acceptance can only be made to the person who has made the offer. No third person can take the position of an offeror without the knowledge of the offeree.
For example, A sold his company to B without giving knowledge to his seller who used to take goods from A’s company. Now, seller C can break the contract with the company because he didn’t give his acceptance to B to buy his goods.
It should be absolute
The acceptance made by the offeree must be absolute and unconditional. There must not be any condition that can amount to the counter offer.
For example, A made an offer to B that he will sell his bike to B for $400. B says that he will accept the offer of A if he sells his bike for $300 only. Here, it is a counter-offer but not a valid acceptance.
It must be communicated to the offeror
The offer accepted by the person must be communicated to the offeror. The person can communicate his acceptance in an oral or implied way. He can also communicate his will need to come into a contract by implied acceptance.
For example, Rohit made an offer to Mohit that he will sell his goods to Mohit for $200. Mohit was willing to accept the offer so he wrote a letter to Rohit but he forgot to post the letter. In this case, Mohit failed to communicate his acceptance and it is not a valid acceptance even though he was willing to do the contract on the same terms and conditions given by Mohit.
It must be in the demanded mode
If the offeror has given any prescribed mode for the acceptance of the offer, the scene must be done in that mode only. But in a case, if a person gives his acceptance to the offer by any other mode, the acceptance will not be considered valid. But in a case where the offeror didn’t give any prescribed manner, the offeree is free to make the acceptance through telegram, post, telephone or any other way.
For example, A makes an offer to B that if he wants to buy his house for $4000 then he must mail him for the same. B wanted to buy that house but he sent a letter by post. Here, B fails to accept the offer in a prescribed way and it is an invalid acceptance.
It should be made while the offer is still in existence
It is a most important essential of a valid acceptance that the offer made by the offeror must exist during the time of acceptance. The person cannot accept the offer once it’s become invalid. Section 5 of the Indian Contract Act says that a person can invoke the offer before the communication of the acceptance made by the offeree.
For example, Amit made an offer to Rohit that he will buy his house for $4000 and also said that Rohit can give his acceptance within 30 days. Rohit communicated his acceptance after 30 days. Now it is an invalid acceptance because the offer was only for 30 days. Now even after accepting the offer, Rohit cannot bind Amit to make contact with him.
Mere silence is not acceptance
According to our law, this silence cannot be considered as acceptance of an offer. But there are definitely some exceptions to this law. The acceptance of an offer is the expression of the mind. The judgements on mere silence are not acceptance varies from case to case.
The acceptance made in a contract binds both the parties into a legal relationship to perform the contract by accepting the terms and conditions of the contract. An invalid acceptance cannot bind the parties in a legal relationship. The parties cannot file the Litigation in the court of law if there is no proper acceptance of the offer. Another party will not liable to pay any money even the party has done any breach of contract. Always make the acceptance which is fulfilling the rules of valid acceptance given under the Indian Contract Act.