1. THE RULES GOVERNING PROPOSAL AND ACCEPTANCE
1. PROPOSAL
Introduction
In section 2(a) of the Contracts Act 1950 provides “when one person signifies to another
his willingness to do or to abstain from doing anything, with a view to obtaining the assent of
that other, he is said to make a proposal.”
How a proposal could be made
Section 9 of the Contracts Act, 1950 provides that, “So far as the proposal..is made in
words, the promise is said to be express. So far as the proposal is made otherwise than in words,
the promise is implied.” By virtue of this section, a proposal can either be express which is in
writing or verbally or implied where implied from the conducts of the parties.
Types of proposal
There are two types of proposal. The first one is specific proposal. Section 2(b), “when
the person to whom the proposal is made signifies his assent, the proposal is said to be
accepted.” The proposal is addressed to a specific person and only the addressee may accept the
offer. Second, general proposal. It such proposal is addressed generally to anyone who may
satisfy all the terms or conditions of the offer stipulated by the offeror.
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2. Conditions of a valid proposal
First, a proposal must be certain. It is a condition that a proposal must be certain, clear,
complete, final and detail to avoid any obscurity or doubt. If the proposal is not clear, it is not to
be regarded as a valid proposal. Second, a proposal must be communicated. A proposal must be
communicated to the promise. Otherwise the proposal is not valid.
Proposal distinguished from invitation to treat.
A proposal must be distinguished from invitation to treat in order to ascertain when is the
actual proposal takes place. If a person does something with the intention to make a proposal,
then such act may bind the offeror if there is an acceptance by another person to such a proposal.
However, if a person does something with the intention to make an invitation to treat, then
anything does by another person in response to such invitation to treat is only a proposal. Thus,
there is no binding contract yet until there is an acceptance to such offer.
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3. 2. ACCEPTANCE
Introduction
Section 2(b) of the Contracts Act 1950 provides, “when the person to whom the proposal
is said to be accepted, a proposal, when accepted, becomes a promise.” According to this section,
if the offeree agree or accepts the proposal made by offeror, there is acceptance to such proposal.
Once there is an acceptance, an agreement between the parties is created. A contract exists and it
is binding upon the parties.
Conditions / requirement of a valid acceptance:
i) Acceptance must be absolute and unqualified, section 7(a).
The term absolute and unqualified means that, the acceptance must be made without any
condition or qualification. The acceptance must be made exactly on the same term of the offer,
without any modification.
ii) Acceptance must be communicated in some usual and reasonable manner,
section 7(b)
The communication of the acceptance must be usual and reasonable. The offeree can
communicate his acceptance in any usual and reasonable mode or method, so long as the mode
which he used is the one which did not cause delay, and which brought the acceptance to the
knowledge of the offerer.
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4. Mode of acceptance
i) Acceptance must be communicated, section 2(b).
The general rule, is that the acceptance must communicated to the offeror. According to
this section, the phrase “signifies his assent” indicates that the offeree must communicate his
acceptance to the offeror. One more thing is silent is not an acceptance. As the acceptance must
be communicate, thus, silence of the offeree is not valid acceptance.
ii) When the offeror dispensed with the need of communication of acceptance.
( Unilateral contract )
Unilateral contract is a contract whereby the offeror is bound to the contract once a
person / offeree fulfills or complies with the conditions or requirements of the proposal as
stipulated by the offeror.
iii) When there is an offer to the public.
If it is a general propsosal, it does not require any communication of acceptance.
Performance of the condition of the proposal will be sufficient to constitute a valid acceptance.
iv) Reciprocal promises, section 2(f).
Reciprocal promises are promises, which form the consideration for the promises of each
other party to the contract.
v) Acceptance through post ( Postal Rule ), section 4 (2) (a).
Acceptance through pos is complete when the letter of acceptance is posted, even though
it has not come to the actual knowledge or received by the offeror.
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5. A. CASES
1. PROPOSAL
1. Section 2(b), Boulton v Jones ( 1857 )
2. Carlill v Carbolic Smoke Ball Co ( 1893 )
3. Guthing v Lynn ( 1831 )
4. Section 4(1), Taylor v Laird ( 1856 )
5. Harris v Nickerson ( 1873 )
2. ACCEPTANCE
1. Hyde v Wrench ( 1840 )
2. Eliason v Henshaw ( 1819 )
3. Powell v Lee ( 1908 )
4. Felthouse v Bindley
5. Carlill v Carbolic Smoke Ball Co ( 1893 )
6. Ignatius v Bell ( 1913 ) 2 FMSLR 115
B. STATUTE
1. Contracts Act 1950
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