What is an Acceptance in Contract Law?

What is an Acceptance in Contract Law? The Acceptance meaning and the essentials of valid acceptance are briefly explained in this article. Generally, the meaning of Acceptance refers to one person's compliance with the terms of an offer made by another. Acceptance is judged objectively, but can either be expressly stated or implied by the offeree's conduct.

The offer and acceptance play an important role in the formation of a Contract. In this article, we will cover all important provisions relating the acceptance like What is Acceptance in Contract Law? the meaning of acceptance, essentials of valid acceptance, the legal rules of a valid acceptance in contract law, and the types of acceptance.  

We already covered the provisions relating to a What is an Offer in Law in Contract Law?

Meaning and Definition of Acceptance

You may ask What is an Acceptance in Contract Law? Generally, acceptance means giving assent and agreeing with the terms and conditions of the other person's offer. Acceptance meaning in Hindi is "स्वीकार करणे." 

The Acceptance in Contract Law Definition is given under section 2 (b) of the Indian Contract Act, 1872.  Acceptance means, "When the person to whom the proposal is made signifies his assent thereto, the proposal is said to be accepted. The proposal when accepted becomes a promise."

As per the above definitions, acceptance means the person or group of persons to whom the offer is made by the offeree is said to be accepted when the other party gives assent to the offer without any condition.

The offer can be revoked before giving acceptance to the offer. Once the offer is accepted then it cannot be revokable.

Example: X makes an offer to buy Y's motorcycle for Rs. 50,000/- and B accepts this. Now, this is a promise and it cannot be revoked.

To understand the concept of acceptance we have to learn about the basic legal rules regarding valid acceptance and the essential elements of acceptance in contract law.

Essentials of Valid Acceptance

Here, we have discussed some essentials of valid acceptance and legal rules of acceptance in contract law;

1. Acceptance must be given by the party to whom the offer was made

The acceptance can be given only by the party to whom the offer is made. No other person can give that acceptance to an offer to whom it is not made.

In case of a specific offer, the persons to whom the offer is made only he can accept that offer.

In the case of a general offer, who performs all the terms and conditions prescribed in the offer is considered as the acceptance of the offer.

Example: One charitable trust announces publicly that only handicapped students will be provided with educational laptops less than 80% of the market value. Therefore, only handicapped students may accept the offer and buy the laptop. 

2. The acceptance must be communicated with the offeree

When the offer is made to enter into a contract, the offeror's acceptance must be communicated with the offeror to constitute a valid contract. Without fulfilling conditions prescribed by the offeror, there will not be a valid contract.

And, mere acceptance without communicating with the offeror does not constitute a valid contract.

According to section 3, the communication of acceptance of the proposal must be communicated with the offeror.

Example: A makes an offer to buy B's car for Rs. 5,00,000/-. B in his mind thinks and accepts the offer but does not communicate with the offeree. 

Does this amount to valid acceptance. A big NO.

Mere silence does not amount to valid acceptance.

In the case of Powell v/s Lee, 1908. Plaintiff made an application to be appointed as headmaster. Appointing authority passed one resolution appointing the plaintiff but this was not communicated with the plaintiff. Later, the appointing authority cancelled the resolution and it came to the knowledge of the plaintiff. The plaintiff filed a suit for breach of contract.

Here, the court observed that the plaintiff did not send his acceptance by communicating with the appointing authority. Therefore, where there is no valid acceptance there is no valid contract.

3. Acceptance must be absolute and unconditional

According to section 7 (a), to constitute an offer into a valid promise, the acceptance must be absolute and unconditional. This means the acceptance given to the offer must be without imposing any condition which leads to a counter-offer to the original offer.

In simple words,  to constitute a valid contract, the acceptance of the offer is being given without making any conditions. 

To convert an offer into a promise, the acceptance must be absolute, unqualified and unconditional. Look at the example to understand it in a better way.

Example: A makes an offer to sell his old house for Rs. 50 Lacs. B accepts the offer but with the condition that he will pay 50% of the amount now and the other 50% next year. This amounts to a conditional acceptance and also a counteroffer.

4. Acceptance must be in the prescribed mode and prescribed time

According to section 7 (b), the acceptance must be given in the prescribed mode and within the offeree's prescribed period. 

And, if the offer does not prescribe any manner of acceptance or prescribed time limit, then the acceptance of the offer must be given in a reasonable manner and within a reasonable time period.

Example: A buys a Rolex watch at a watch shop with the condition that the watch should be in the gift-wrapped box and shall be delivered the next evening. But, the shopboy delivers the watch without gift wrapping. It amounts to a failure of the prescribed manner of acceptance.

Types of Acceptance