Contracts play an important role in our day to day life; it has entered every aspect of the society. We enter into a contract randomly without knowing about it actually, for example, while buying a movie ticket, purchasing any commodity from a grocery shop, online shopping or even downloading an app on your device. An agreement doesn’t become a contract unless it is enforceable by law. A contract initiates with an offer and completes with an unconditional acceptance. The entire offer depends upon the acceptance by another party since when an offer is accepted it creates a legal obligation between the parties as it becomes an irrevocable promise.
OFFER OR PROPOSAL
According to Section 2(a) of The Indian Contract Act, 1872, “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.” Section 2(c) says that “The person making the proposal is called the ‘promisor’, and the person accepting the proposal is called the ‘promisee’.”
TYPES OF OFFERS
A general offer is an offer which is not for a particular party but to a public at large; there is no restriction on the type of people accepting the offer. Anyone can accept the offer from the public who has the knowledge of the particular offer. For example: an offer to give reward to anybody who will find a lost horse or a person or even a valuable commodity. A case of general offer would be the Harbhajan Lal v. Harcharan Lal, in which the defendant's son ran away from his home and the defendant issued a pamphlet, where he offered a reward of Rs. 500 to anybody who will bring his son back home. The plaintiff Harbhajan Lal found the boy at Bareilly Railway Station, from where he took him to the police station and also informed his father through a telegram. The court held that since there was a general offer open to all which can be accepted by anybody who will fulfill the conditions stipulated in the offer and plaintiff has fulfilled them by sending a boy safely to his father’s home, he is entitled to the reward.
A specific offer is an offer which is not for all or any person but to a specific person or certain kind of people; it places a restriction on the type of people who can accept an offer. It’s not open for all; it is made only to certain specific people. For example: David offers to buy a bike from Charlie for Rs. 5lakh. This offer is a specific offer which is made with a specific person Charlie and no person other than Charlie can accept this offer. In the case of Boulton v. Jones, the defendant i.e. Mr. Jones sent a written order addressed to the owner of Brocklehurst by name to buy certain goods. Unknown to the defendant, Brocklehurst had sold and transferred his business to Mr. Boulton. But Mr. Boulton also hasn't informed him about this and delivered the goods to the defendant. When the defendant found about the fact he refused to pay Mr. Boulton claiming that he had intended to deal with Brocklehurst personally, also mentioned his name in the order. Hence, the court held that the defendant is not liable to pay the plaintiff since it was a specific offer made to a definite person; no one can accept it other than the person to whom it is made.
A counter offer is an offer when the promisee or offeree does not accept the original offer but offers some changes in it in the form of additions or deletions as a condition for the acceptance. In such a situation, the original offer gets rejected and it cannot be revived at any later stage. After the counter offer by the offeree, roles get exchanged offeror becomes offeror and offeree becomes offeror, it can be accepted by the offeror who initiated the initial offer. In the case of Hyde v. Wrench, the defendant, Mr. Wrench offered plaintiff, Mr. Hyde to sell his farm for £ 1,200 but Mr. Hyde refused to accept this offer. The defendant offered another deal this time, to sell his property to him for £ 1,000 and he made it clear that this offer is a final offer regarding this property. The plaintiff refused it and sent another offer letter that he will buy his property in £ 950 which defendant refused. After that refusal plaintiff sent a letter of acceptance for the earlier offer which was for £ 1,000. However, the defendant refused to sell. The court held that there was no binding contract between Mr. Hyde and Mr. Wrench since when Mr. Hyde made a counter offer, it supersedes the original offer. So, the plaintiff can’t accept the earlier offer made by the offeror when he already countered that offer.
A cross offer is an offer in which both the parties make the exact same offer to each other at the same time. This type of offer is rare to occur as it’s based on chance. In this type of offer there won’t establish any type of contract between both the parties because it cannot be interpreted if one party’s offer is accepted by the other party.
A standing offer is an offer which is made for a certain amount of time and it can be accepted before the end of that time period. There is one fixed deadline for the acceptance of this type of offer.
According to Section 2(b) of The Indian Contract Act, 1872, “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.”
So, this definition is saying that when the offeror makes the proposal to the offeree, and he or she accepts the proposal unconditionally i.e. without stating any condition for the acceptance then it will amount to the acceptance.
For example: Nicholas offers to buy Daisy’s car for Rs. 5 Lakh and Nicholas accepts an offer. Now, after acceptance this offer becomes a promise. An offer does not create any legal obligation between both the parties of the contract but when the offer is accepted by the offeree, it becomes a promise. And a promise is not supposed to be broken as it is irrevocable because it creates a legal obligation on each party of the contract. As stated above an offer after acceptance becomes a promise and it can’t be revoked after that, However, it can be revoked before the acceptance.
RULES OF VALID ACCEPTANCE
WHO CAN GIVE THE ACCEPTANCE?
An offer can only be accepted by the person to whom it is made and it is only relevant for the specific offer or proposal. No third person can accept the offer unless he is appointed to accept on behalf of the offeree.
In the case of Boulton v. Jones, Boulton accepted the offer which was not made for him and hadn't notified the defendant about the transfer of business. Hence, it was not a valid acceptance since he doesn’t have the right to accept that particular offer.
ACCEPTANCE HAS TO BE ABSOLUTE AND UNQUALIFIED
As we have discussed it earlier, acceptance of an offer must be absolute and unqualified. It must be unconditional that means the offeree must accept it without any condition. If he or she puts any condition for the acceptance of the particular offer then it would amount to a counter offer which nullifies the original one.
ACCEPTANCE MUST BE COMMUNICATED
Contract cannot be established without the communication of the acceptance of such an offer. When the acceptance of an offer is communicated to the offeror, it becomes a contract. The acceptance must be communicated in a prescribed manner and if no such form is prescribed in the offer then it can be communicated in any normal course of business. Nobody can communicate the acceptance of an offer without the knowledge of such an offer.
IS SILENCE AMOUNTS TO AN ACCEPTANCE?
Silence can’t be interpreted as a form of an acceptance for any offer. If an offeror tells to an offeree that won’t hear acceptance of the offer until a certain period of time then he will assume that the offer is accepted by the offeree, this kind of statement turns the offer to be invalid.
In the case of Felthouse v. BindleyOfferor who was an uncle of an offeree offered to buy his horse and wrote that if he won’t hear acceptance of the offer from his side by the certain date, he will presume that the offer is accepted by him. Nephew didn’t reply to the offer but told the auctioneer not to sell that horse but the auctioneer sold that by mistake. The court held that the defendant is not liable for the breach of contract since without the communication of acceptance there cannot be a valid contract.
So, to conclude, acceptance is an essential element to form a binding contract. It can be made expressly or impliedly as in expression offeree can accept the offer through words and impliedly he or she can accept such offer through his or her actions. When you haven’t communicated the acceptance of such an offer but took the advance money for the sale of your property, then it would automatically amount to an acceptance of such an offer. In a general offer, there is no need to communicate an acceptance of the offer, it is communicated through the fulfillment of the conditions stipulated in such kind of offer.
This article is written by Radhika Yadav of Lloyd Law College.