2. ‘ACCEPTANCE’
O All contracts are made by the process of a
lawful offer by one party and the lawful
acceptance of the other by the other party.
O X says to Y, “Will you buy my house for Rs.
50,000?” This is an offer. If Y says, “Yes”, the
offer is accepted and contract is formed.
3. ESSENTIALS OF VALID
ACCEPTANCE
O It must be given by the Offeree
O It must be Absolute and Unconditional
O It must be in Prescribed Manner
O It must be Communicated to the
Offeror
O It may Express or Implied
O It must Follow the Offer
O It must be given within Reasonable
Time
4. IT MUST BE GIVEN BY THE
OFFEREE
O An offer can be accepted only by person to
whom it is made. It cannot be accepted by
another person with the consent of offeror.
Similarly in case of offer to the particular class it
can be accepted by any member of that class.
O Example:
A sold his business to B without disclosing the fact to
his customers. J send is an order for the supply of good
to A by name. B receives the order and executed the
same. It was held that there was no contract between B
and J because J never made any offer to B.
5. IT MUST BE ABSOLUTE
AND UNCONDITIONAL
O In order to convert the offer into an
agreement, the acceptance must be an
absolute an unconditional. If the offeree
imposes any condition in his acceptance, it
is not a valid acceptance, but a counter
offer.
O Example:-
A offer to sell his watch to B for Rs.200 and B
replies that he can buy it only for Rs. 100, there
is a material variation in the acceptance.
Therefore, there is no agreement as the
acceptance is not absolute and unconditional.
6. IT MUST BE IN
PRESCRIBED MANNER
O If the offeror in his offer has prescribed any
particular manner of acceptance, it must be
given according to that particular manner.
O Example: A makes an offer to B and writes ''if
you accept the offer send your acceptance by
telegram'' B sends his acceptance by registered
post, it is not a valid acceptance. But A should
inform B that it is rejected because it is not in
prescribed manner.
7. IT MUST BE
COMMUNICATED TO THE
OFFERORO In order to form a contract the acceptance
must be communicated to the offeror in a
clear manner by the offeree or his
authorize agent. Here expression of
intension to accept an offer is not a valid
acceptance.
O Example: A proposes by letter to
purchase B's house. B expresses his
intension to sell it to A but does not
send a reply to him. The house is sold
to C, despite B's intension. He has no
legal remedy to against B.
8. IT MAY EXPRESS OR
IMPLIED
O When an acceptance is given as words
spoken or written, it is called express
acceptance. When it is given by conduct,
it is called implied acceptance.
Example: A wrote letter to B to sell his
cycle for Rs.2000 B accepted his offer and
sent a letter of acceptance to A. it is an
express acceptance.
9. IT MUST FOLLOW THE
OFFER
O Acceptance must be given after receiving
the offer. It should not precede the offer.
Acceptance always follows the offer.
Example: A offers a rewards for an act
and B does the act in ignorance of the
offer , now B cannot claim the reward
when he becomes aware of its
existence.
10. IT MUST BE GIVEN WITHIN
REASONABLE TIME
O In order to be valid acceptance, it must be
given at specified time allowed by offeror.
If no time is mentioned, then the
acceptance must be given in a reasonable
time.
Example: M implied for certain shares
in a company in june but allotment was
made in November. M refuse to accept
the shares, it was held that M could
refuse to take shares offer has lapsed
after the expiry a reasonable time.
11. Proposal
O An “offer “involves the making of a
“proposal”. The term proposal is defined in
the Contract Act as follows: “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 to such act or abstinence, he is said
to make a proposal”
12. Offer
O A proposal is also called an offer. The
promisor or the person making the offer is
called the offeror. The person to whom the
offer is made is called the offeree.
13. Promise and Acceptance
O “When the person to whom the proposal is
made signifies his assent thereto, the
proposal is said to be accepted. A
proposal when accepted becomes a
promise.”