Acceptance Definition: Section 2(b):- 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. Proof of an offer to enter legal relations upon definite terms must be followed by the production of evidence from which the courts may infer an intention by the offeree to accept that offer. The phenomena of agreement: a)The fact of acceptance b)The communication of acceptance. Section 3: assent should be signified by an act or omission Acceptance by external manifestation or overt act Ex: fall of hammer in the case fo an auction sale. Bhagwandas v. Girdharilal (1966) Shah J: An agreement does not result from a mere state of mind: intent to accept an offer or even a mental resolve to accept an offer does not give rise to a contract. There must be some external manifestation of that intent by speech, writing or other act Such manifestation may be in the form of express words, written or spoken or may be signified through conduct. Agreement may be inferred from conduct: Brogden v. Metropolitan Railway Co. (1877) 2 App Cas 666 Brogden had for years supplied the defendant company with coal without a formal agreement. At length the parties decided to regularize their relations. The companys agent sent a draft form of agreement to Brogden, and the latter, having inserted the name of an arbitrator in a space which had been left blank for this purpose, signed it and returned it, marked approved. The companys agent put it in his desk and nothing further was done to complete its execution. Both parties acted thereafter on the strength of its terms, supplying and paying for the coal in accordance with its clauses, until a dispute arose between them and Brogden denied that nay binding contract existed. The difficulty was to determine when, if ever, a mutual assent was to be found. Lord Cairns LC the subsequent conduct of the parties in supplying and accepting coal on the basis of proposed agreement was a conduct that evidenced or manifested their intention. Section 8:- Performance of the conditions of a promise which may be offered with a proposal, is an acceptance of the proposal. Hindustant Cooperative Insurance Society v. Shyam Sunder, AIR 1952 Cal 691 After an oral understanding to insure and the completion of the medical examination, the company informed the proposer that if he submitted the proposal form and deposited the half-yearly premium, his proposal would be accepted. He accordingly submitted a cheque and the proposal. The company cashed the cheque but had not yet replied to him their acceptance of the proposal that the proposer died. The question was whether by cashing the cheque the company had accepted the proposal without there being the formal acceptance Harris CJ mere silence after receipt and retention of premium cannot be construed as acceptance. But in this case where the assured, a positive act on his part by which he recognizes or seeks to enforce the policy amounts to an affirmation of it.

Communication to offeror himself: Felthouse v. Bindley (1863) 7 LT 835 The plaintiff offered by means of a letter to purchase his nephews horse. The letter said: If I hear no more about the horse, I consider that horse mine at 33.15s pounds. To this letter no reply was sent. But the nephew told the defendant, his auctioneer, not to sell the horse as it was already sold to his uncle. The auctioneer by mistake put up the horse for auction and sold it. The plaintiff sued the auctioneer on the ground that under the contract the horse had become his property and, therefore, defendants unauthorized sale amounted to conversion. But the action failed. The court said: it is clear that the nephew in his own mind intended the uncle to have the horse, but he had not communicated his intention to the uncle. Offer cannot Impose Burden of Refusal It is not open to an offeror to stipulate against an unwilling offeree that the latters silence will be regarded as equivalent to acceptance. He cannot force him to take a positive course of action under penalty of being contractually bound if he does not. Communication by acceptor himself Powell v. Lee (1908) 24 TLR 606 The plaintiff was an applicant for the headmastership of a school. The manages 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 their resolution and the plaintiff sued for breach of contract. Rejecting the action the court observed: "There must be notice of acceptance from the contracting party in someway. Information by an unauthorised person is an insufficient as overhearing from behind the door." When Communication not necessary Carlill v. Carbolic Smoke Ball Co. (1893) 142 ER 1037 BOWEN LJ:- Expressly or impliedly intimates a particular mode of acceptance as sufficient to make the bargain binding, it is only necessar for the other person to follow the indicated method of acceptance. Unilateral contracts. External manifestation of acceptance than a mere mental determination. DENNING LJ Taylor v. Allon (1965) 1 All ER 557 A motor- cyclist was convicted for being with his motor cycle on a public road without third-party insurance. His insurance had expired, but his company had sent him a temporary cover note. He had not accepted this and, therefore, at the relevant date there was no contract.

Load Parker, however, suggested that if he had taken out his motor cycle in reliance upon the temporary risk note that would have been sufficient acceptance by conduct without communication. Acceptance should be made in prescribed manner Eliason v.Henshaw (1819) 4 Wheaton 225 A offered to buy flour from B requesting that acceptance should be sent by the wagon which brought the offer. B sent his acceptance by post, thinking that this would reach the offeror more speedily. But the letter arrived after the time of the wagon. A was held to be not bound by the acceptance. Where no manner Prescribed: Reasonable and Usual Manner Minor departure from the prescribed mode of communication. Lapse of time: The power to accept the offer ends at the time specified in the offer. If the offer stipulates a period of time, namely 15 days, time would rum from the date of receipt of offer, unless the offer stipulates that time shall run from the date of the offer, or its transmission. If such offer stipulates reply by return post, it may be accepted by a letter posted on that date. But where a specific time is prescribed for the receipt of an acceptance, it must reach the addressee before that time. Kalyanji Vithaldas & Sons v. State of Madhya Pradesh, (1996) 10 SCC762 K agreed to purchase tendu leaves for three years ending on 31 December 1970, the terms of the lease providing that it was renewable every year. K was to opt for renewal within 15 days prior to December 31 and the leases were to be renewed by issue of order by the government and acceptance by the department by 31 January next year. K offered for renewal on 7th December 1968, and it was accepted by the government on 31 January 1969 but dispatched on 7th February 1969. K sought to withdraw it before 31 January 1969. It was held that it being a continuing contract, the acceptance on 31 January 1969 was in time and the lease stood renewed. Registered post and ordinary post. Section 7: Acceptance must be absolute: In order to convert a proposal into a promise, the acceptance must (1) be absolute and unqualified, (2) be expressed in some usual and reasonable manner, unless the proposal prescribes the manner in which it is to be accepted. If the proposal prescribes a manner in which it is to be accepted, and the acceptance is not made in such manner, the proposer may, within a reasonable time after the acceptance is communicated to him, insist that his proposal shall be accepted in the prescribed manner, and not otherwise; but if he fails to do so, he accepts the acceptance. The offer and acceptance must correspond. This is sometimes called the mirror rule, that is the acceptance must match with the terms of the offer. When there is a variation between the offer and acceptance even in respect of any material term, acceptance cannot be said to be absolute and it does not result in the formation of a legal contract.

 In order to decide whether there is an absolute and unqualified agreement between the parties to a contract, the entire negotiations and correspondence should be considered. An absolute and unqualified acceptance may, even when there is no express intimation from the offeree, be inferred from the conduct of the offeree. Mirror Rule: There has been a growing judicial awareness of the danger that a very strict application of the requirement of certainty of the terms could result in the striking down of agreements intended by business community to have a binding force, and the courts have been reluctant in striking down an agreement on which the parties have already acted. Article 7 of International Sales Act, 1967 1) An acceptance containing additions, limitations, or other modifications shall be rejection of the offer and shall constitutes a counter-offer. 2) However, a reply to an offer which purports to be an acceptance but which contains additional or different terms which do not materially alter the terms of the offer shall constitute an acceptance unless the offeror promptly objects to the discrepancy; if he does not object, the terms of the contract shall be the terms of the offer with the modifications contained in the acceptance. Counter Proposals Hyde v. Wrench (1840) 3 Beav 334 In 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 then the plaintiff agreed to pay 1000 pounds. Holding that the defendant was not bound by any such acceptance, the court said: The defendant offered to sell it for 1000 pounds and if that had been at once unconditionally accepted, there would undoubtedly have been a perfect binding contract, instead of that, the plaintiff made an offer of his own, to purchase the property for 950 pounds and thereby rejected the offer previously made by the defendant. Partial acceptance: Ramanbhai v. Ghasiram, ILR (1918) 42 Bom 595 An application for certain shares in a company was made on the condition that the applicant would be appointed cashier in a new branch of the company. The company allotted him some shares without fulfilling the condition and the claimed the share money. Held:- It was held that the petitioners application for 100 shares was conditional and that he had no intention to become a member of the company when he applied for the shares until he was appointed a cashier in the branch office. Inquiry into terms of proposal: An inquiry about the technical details of a proposal is not a counter-proposal. Postal Communications The usual question in postal communication is as to when is the contract concluded? Adams v. Lindsell (1818) 106 ER 250