Acceptance Under The Indian Contract Act, 1872

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Definition:

Acceptance, even the word in itself means that there is some offer from one party and the counter party gives its assent. Similarly, even the Indian Contract Act, once the offeree accepts the proposal made by the offerer, it is said to be an Acceptance.

Hence, in the simplest of terms, assent or consent to an offer is known as Acceptance. Under the Indian Contract Act, Acceptance can be Expressed or Implied.

  • In case the acceptance is oral or written, it becomes an Expressed Acceptance

Arjun offers to sell his cellphone to Rakesh over an email. Rakesh replies to that email stating that he accepts the offer to buy.

  • In case the acceptance is shown by conduct, it becomes an Implied Acceptance thereby leading to an Implied Contract.

The Museum of Arts is holding an auction to sell a historic book to raise funds for charity. They advertise the same in the newspapers. This states a Mere Invitation to an Offer as per the Indian Contract Act, 1872. The invitees bid for the same. Bidding is expressed orally, so the offer to buy is an Express Offer but the final call is taken by the auctioneer by striking the hammer thrice. This is known as Implied Acceptance.

Who Can Accept?

Offers can either be made out to people in General or to a Specific counter-party

  • If it is a General Offer it can be accepted by anybody who firstly comes to know about this offer, has the capacity to contract and accepts the offer with all its terms and conditions.

For example there is an advertisement in the paper that any Holiday Packages booked with JGK Holidays before 31st of May 2015 is entitled to a discount 20% of the per person package cost.

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  • If it is a Specific Offer it can ONLY be accepted by that Specific Counter-party to whom the offer is made.

For example, Aarkey Group of Companies wants a specific type of tool to help in their construction business. They have a long-standing association with Mayfair Tool Suppliers. Because of this relationship, Mayfair offered to sell this custom-made tool at a special price which was only set for the Aarkey Group.

Legal Rules and Conditions for Acceptance

    1. Acceptance must be absolute and unqualified: The acceptance made by the offeree cannot be conditional. For example if Aseema wants to sell her bike to Kartika for Rs. 62000/-, Kartika can’t come back and state that she accepts the offer but she will buy the same for Rs. 55000/-
    2. Acceptance must be communicated to the offerer: If the acceptor just accepts the offer in his head and does not state the same to the offerer whether in an Express manner or an Implied Manner, it cannot be called as an Acceptance.
    3. Acceptance must be in the mode prescribed: Acceptance sometimes is asked for in a prescribed/specified mode of communication. For instance Deepak wants the acceptance made orally in person, but Ravi accepts Deepak’s offer and posts his acceptance to him. This shall not be considered as a valid acceptance.
    4. Acceptance must be given within a reasonable amount of time: It’s very rare that an offer will be open to acceptance at all times and any time. More often than not, the offer states a time limit. In case it doesn’t, the acceptance shouldn’t take forever.
    5. Mere silence is not acceptance: In case the offeree does not respond to an offer made to him, his silence cannot be mistaken for an acceptance. But, there is an exception to this rule. If it is specified that the non-acceptance has to be communicated to the offerer within say 3 weeks from the date the offer is made, the silence shall be communicated as acceptance.
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