Law relating to Acceptance in the make of Contract in India

Section 2(b) of the Indian Contract Act defines "acceptance" as occurring 'when the person to whom the proposal is made signifies his assent thereto'. When a proposal is accepted, it becomes a "promise". Acceptance is the assent given to a proposal.

Essential Requirements of a Valid Acceptance (Section 7):

1.          Communication of Acceptance: Acceptance must be communicated by the offeree (or their authorised agent) to the offeror (Powell v Lee). Communication to a stranger is not sufficient. Mere mental acceptance is insufficient; it must be outwardly manifested and communicated (Felthouse v Bindley).

2.          Absolute and Unqualified: Acceptance must be absolute and unqualified, without any condition or variation. Section 7 requires acceptance to be absolute and unqualified. If the acceptance seeks to vary the offer, it constitutes a counter-offer and a rejection of the original offer (Hyde v Wrench). For a valid acceptance, there must be a "concurrence of mind" or ad idem, meaning agreeing on the same thing in the same sense. Acceptance must be total, not partial.

3.          Must be made in Response to an Offer: Acceptance must be given in response to a known offer. As seen in Lalman Shukla v Gauri Datt, acting in ignorance of an offer does not constitute acceptance.

4.          Manner of Acceptance: Acceptance must be expressed in some usual and reasonable manner, unless the proposal specifies a particular manner. If the proposal prescribes a manner, and the acceptance is not made in that manner, the offeror may, within a reasonable time, insist that the acceptance be made as prescribed.

5.          Must be made while the offer is subsisting: Acceptance must occur while the offer is still open and capable of being accepted. Acceptance after the offer has lapsed or been revoked is ineffective.

Silence as Acceptance: Generally, silence does not amount to acceptance. An offeror cannot stipulate that the offeree's silence will be treated as acceptance, thereby imposing a "burden of refusal" (Felthouse v Bindley).

Acceptance by Conduct: Acceptance can be implied from the conduct of the parties. Section 8 states that performance of the conditions of a proposal or the acceptance of any consideration for a reciprocal promise constitutes acceptance of the proposal. For example, consuming eatables at a restaurant creates an implied promise to pay. The case of Upton Rural District Council v Powell is an example of implied offer and acceptance.

Communication of Acceptance:

• General Rule: The communication of acceptance is complete as against the proposer when it is put into a course of transmission to him, so as to be out of the power of the acceptor. It is complete as against the acceptor only when it comes to the knowledge of the proposer. Section 4 governs this.

• Postal Rule: In contracts made through post, the offeror becomes bound as soon as the letter of acceptance is properly posted. However, the acceptor does not become bound merely by posting; they become bound only when the acceptance comes to the knowledge of the proposer. This is a key difference from English law where both parties are bound upon posting.

• Instantaneous Communication (Telephone/Telex): In direct or instantaneous communication, such as by telephone, the contract is complete only when the acceptance is received (clearly heard and understood) by the offeror. The contract is deemed to be made at the time and place where acceptance is received. The Supreme Court in Bhagwandas G. Kedia v Girdharilal & Co. endorsed this principle, aligning with the English case of Entores Ltd v Miles Far East Corporation.

Revocation of Acceptance: Unlike English law, acceptance in India is generally revocable. Section 5 provides that an acceptance may be revoked at any time before the communication of the acceptance is complete as against the acceptor, but not afterwards. This means an acceptor can revoke their acceptance by a speedier mode of communication (like a telegram) that reaches the offeror before or at the same time as the acceptance (e.g., a letter).

In essence, the framework of offer and acceptance under the Indian Contract Act, 1872, lays down specific rules for the creation of a legally binding agreement, forming the foundational step towards a contract. These rules, though similar to English common law in many aspects, have distinct features, particularly concerning the postal rule and the revocability of acceptance, which are tailored to the Indian context.