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Acceptance

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Definition

In Contract Law

Black's Law Dictionary definition:

  • The taking and receiving of anything in good part, and as it were a tacit agreement to a preceding act, which might have been defeated or avoided if such acceptance had not been made.
  • The act of a person to whom a thing is offered or tendered by another, whereby he receives the thing with the intention of retaining it, such intention being evidenced by a sufficient act. JEtna Inv. Corporation v. Chandler Landscape & Floral Co., 227 Mo.App. 17, 50 S.W.2d 195, 197.
  • The exercise of power conferred by an offer by performance of some act. In re Larney's Estate, 266 N.Y.S. 564, 148 Misc. 871.

In Contract Law

  • Compliance by offeree with terms and conditions of offer would constitute an "acceptance". Davis & Clanton v. C. I. T. Corporation, 190 S.C. 151, 2 S.E.2d 382, 383.
  • Qualifications or conditions make a "counteroffer," not an "acceptance." Cohn v. Penn Beverage Co., 313 Pa. 349, 169 A. 768, 769. Bullock v. McKeon, 104 Cal.App. 72, 285 P. 392, 395.

Essential Requirements of a Valid Acceptance

When a proposal is being accepted, it results in an agreement.

It is only after the acceptance of the proposal that a contract between the two parties can arise.

When the person to whom the proposal is made, signifies his assent thereto, the proposal is said to be accepted. Thus, acceptance is the assent given to a proposal.

There are two essential requirements of a valid acceptance:

  1. Acceptance should be communicated by the offeree to the offeror.
  2. Acceptance should be absolute and unqualified.

Communication of Acceptance

(1) Acceptance express or implied

An acceptance may be in the form of express words (written or spoken) or may be signified through conduct. In every case, there should be some external manifestation or overt act of acceptance (that is fall of hammer in auction sale). A mere mental determination (or intent) to accept is not enough (that is keeping agreement in a drawer).

(2) Communication when not necessary

In all cases of general offers (unilateral contracts), the acceptance is usually by conduct.

Performance of the condition of a proposal is an acceptance of proposal (Car/ill Verses Carbolic Smoke Ball Co.). In such cases, communication of acceptance is not necessary.

(3) Communication to offeror himself

A communication to any other person is no communication in the eyes of law [as per Felthouse Verses Bindley].

(4) Communication by acceptor himself

Information received from an unauthorized person is ineffective as it is like overhearing from behind the door [Powell Verses Lee].

(5) Mode of communication

Provides that acceptance has to be made in the manner prescribed by the proposer (if not prescribed, then in some usual and reasonable manner). Further, a duty is cast on the offeror to reject such acceptance within reasonable time and if he fails to do so, the contract is concluded.

(6) When communication of acceptance complete

When the parties are in the presence of each other, the contract is concluded when acceptance is communicated to the proposer. When the parties are at a distance and are contracting through post or by messengers, the proposer become bound as soon as the acceptance is put in the course of transmission to him (that is when letter of acceptance posted by acceptor)./But the acceptor will become bound only when the communication of acceptance is received by the proposer. When the acceptance is by telephone or telex (that is direct communication), the contract is complete only when the acceptance is received by the offeror (Bhagwandas Kedia Verses Girdharilal & Co.)

Absolute and Unqualified Acceptance

In order to convert a proposal into a promise, the acceptance must be absolute and unqualified that is without any qualification or condition. For a valid acceptance, there must be an ad idem "concurrence of mind1' that is agreeing on the same thing in the same course/ sense and at the same time.

(1) Counter proposals

An acceptance with a variation (that is introduction of new terms) is no acceptance, it is simply a counter proposal, which must be accepted by the original promisor before a contract is made. A counter offer implies the stage of negotiation has not yet passed. A counter offer puts an end to the original offer and it cannot be revived by subsequent acceptance by the acceptor

(2) Provisional acceptance

An acceptance made subject to the approval is called provisional acceptance. It does not ordinarily bind either party until the final approval is given. Meanwhile the offerer is at liberty to cancel his offer unless there is a contrary condition supported by consideration.

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