Project topic :- Essential's of Acceptance

&Communication Of Offer

 ‘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.

ESSENTIALS OF VALID ACCEPTANCE

O It must be given by the OffereeO It must be Absolute and UnconditionalO It must be in Prescribed MannerO It must be Communicated to the

OfferorO It may Express or ImpliedO It must Follow the OfferO It must be given within Reasonable

Time

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.

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.

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.

IT MUST BE COMMUNICATED TO THE OFFEROR

O 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.

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.

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.

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.

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”

OfferO 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.

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.”