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Section 2 (b): 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. Thus acceptance converts a proposal to a promise.
Acceptance must be given only by the person to whom the offer is made
Powell v. Lee Plaintiff was an applicant for the headmastership of a school. The managers passed a resolution appointing him, but the decision was not communicated to him. One of the members, however, in his individual capacity informed him. The managers cancelled the resolution and the plaintiff sued them. There must be notice of acceptance
from the
unauthorised person is as insufficient as overhearing from behind the door. An offer made to a class may be accepted by any member of that class. An offer made to public can be accepted by any member of the public. Similarly, offer made to a single person should be accepted by him alone.
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Hyde v. Wrench this case, an offer to sell a farm for 1000 pounds was rejected by the plaintiff, who offered 950 Pounds for it. This was turned down by the offeror and the plaintiff agreed to pay 1000 pounds. Held not a valid acceptanceThere was a counter offer, which had made the acceptance qualified The prior offer had lapsed when the counter offer was made. There was no acceptance at all
Acceptance should be in some reasonable manner and usual manner unless the proposal prescribes the manner in which it is to be accepted
Acceptance may be express or implied If a mode of acceptance is prescribed in the offer, the acceptor
has to follow it. If he deviates from that mode, the proposer may within a reasonable time after the acceptance is communicated to him, insist that his proposal may be accepted in the prescribed manner. Failing which it is presumed that he accepts the acceptance. Eliason v. Henshaw A offered to buy flour from B requesting that acceptance should be sent by the wagon that brought the offer. B sent his acceptance by post, thinking that it would reach the offeror more speedily. But the letter arrived after the time of the wagon. A was held not to be bound by the acceptance. Where no mode is prescribed, acceptance should be in an usual and reasonable manner. Mail is a very reasonable manner in such cases.
without any formal agreement. Later agents met and drafted an agreement as per Bs wish. B continued supplying coal on the new terms and conditions. The Rly.co. also started to pay and deal as per the new terms with B. He sent in a signed copy of agreement , which co. agent also signed but kept in his drawer. No communication of acceptance. Still company was held to be bound because they acted as per the terms and conditions of Bs proposal
Acceptance must be given within a reasonable time or within the prescribed time before the offer lapses
An offer cannot be kept open beyond
a reasonable time. Acceptance should not precede offer. E.g. Allotment of shares before the application by the allotee. Rejected offers can be accepted only after renewing it. E.g. counter proposals Hyde v. Wrench
Communication of offer
The communication of offer is complete when it comes
to the knowledge of the person to whom it is made. i.e. when the letter of offer reaches the offeree. Hence, before that at any time offeror can revoke the offer
Communication of acceptance
1. As against the proposer: when the letter of acceptance is put in due course of transmission to him, so as to be out of the power of acceptor. i.e. when it is posted by the acceptor. Hence he can revoke the proposal at any time before the letter of acceptance is posted by the acceptor
before the communication of acceptance is complete as against the proposer and not afterwards
E.g.: A proposes by a letter by post to sell his house to B. B accepts the proposal by a letter sent by post. A may revoke his proposal at anytime before the letter of acceptance is posted and not afterwards.
2. As against the acceptor: when the letter of acceptance comes to the knowledge of the proposer. i.e. when it reaches the proposer. So the acceptor can revoke the acceptance at any time before the letter of acceptance reaches the proposer.
An acceptance may be revoked at anytime before the communication of acceptance is complete as against the acceptor and not afterwards E.g.: A proposes by letter sent by post, to sell his house to B. B accepts the proposal by a letter sent by post. B may revoke his acceptance at anytime before the letter of acceptance reaches A and not afterwards
Communication of revocation
1. As against the person who makes it: when the letter of revocation is put into due course of transmission to the person to whom it it was intended. i.e. when it is posted. 2. As against the person to whom it is made: when it comes to his knowledge. i.e. when he receives the revocation letter
COMMUNICATION OF ACCEPTANCE
The assent should be signified. E.g.: a common instance of communication of acceptance is the falling of the hammer at an auction sale. A mere mental determination is not sufficient. An overt or express act or omission is necessary to constitute a valid acceptance.
Communication to offeror himself Acceptance must be communicated to offeror himself. Offer cannot impose burden of refusal
Felt house v Bindley
Plaintiff sent a letter to his nephew to purchase his horse. It said If I hear no more about the horse, I consider the horse Mine at 33.15 pounds. The nephew told defendant, auctioneer not to sell this horse as it was already sold to his uncle. The defendant put up the horse for auction and sold it. The plaintiff sued the defendant. Held that communication of acceptance should be to the offeror himself
Auction sale of liquor shop. Conditions said that the bid shall be subject to the confirmation of the chief commissioner. There will be no final contract till the acceptance of the highest bid is confirmed by the Chief Commissioner. The person whose bid has been provisionally accepted is entitled to withdraw his bid.
Instantaneous communications
When I shout an offer at a man at the other side of
the river. An aircraft passes by and I do not hear his reply. Decide? I am speaking to the person whom I offered something via telephone. Before I could get his reply the phone is dead. Decide?
In the case of instantaneous communications, offer and acceptance are communicated in reciprocity. It happens one after the other. Offer and acceptance are complete when it comes to the knowledge of the person to whom it was intended. But when communication is by post, contract is completed when the letter of acceptance is posted.
obligations. The offer has to be revoked before acceptance is complete as against the proposer. In the same way acceptance has to be revoked before it comes to the knowledge of the offeror.