Indian Contract Act, 1872

1. ACCEPTANCE
BUSINESS LAW
S.M. GOLDYN ABRIC SAM, ASST. PROFESSOR, DEPT. OF MANAGEMENT
STUDIES, NMCC, MARTHANDAM

2. Offer / Proposal
• According to Sec.2(a),
• when one person signifies his willingness
to another
• to do or to abstain from doing anything
• with a view to obtaining the assent of the
other person to such act or abstinence,
• he is said to make a proposal.
S.M. GOLDYN ABRIC SAM, ASST. PROFESSOR, DEPT. OF MANAGEMENT STUDIES, NMCC,
MARTHANDAM

3. Acceptance
According to Sec 2(b) of the Indian Contract
Act, 1872,
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.
S.M. GOLDYN ABRIC SAM, ASST. PROFESSOR, DEPT. OF MANAGEMENT STUDIES, NMCC,
MARTHANDAM

4. ESSENTIALS OF A VALID ACCEPTANCE
1. Acceptance must be absolute and unconditional
• For example, Helena proposed to sell her scooter for Rs. 30,000
to Wendy. If Wendy accepts the offer as such, it ends up as an
promise. In this case, it is a valid acceptance. But if Wendy
negotiated the scooter for Rs.20,000 with Helena, it does not
end up as an promise, as it is a counter offer.
2. Acceptance must be communicated to the offeror
1. For example, a manager of a raw material supplying
company received a email regarding supply of raw material.
The manager started writing a reply through email as
‘Accepted’ and saved in his drafts and forgot to send the
email.
S.M. GOLDYN ABRIC SAM, ASST. PROFESSOR, DEPT. OF MANAGEMENT STUDIES, NMCC,
MARTHANDAM

5. ESSENTIALS OF A VALID ACCEPTANCE
3. Acceptance should be made within a reasonable time.
• For example, A proposed to sell his car for Rs. 9,00,000 to B. It was
mentioned that B if accepts the offer, he/she has to communicate within 5
working days.
4. Acceptance may be expressed or implied
• Expressed – through words spoken or written
• Implied – gathered from the circumstances or the conduct of the parties
• There should be an intention on the part of the acceptor to fulfil the terms of
the offer
• Acceptance must be made by the party or parties to whom the offer is made
S.M. GOLDYN ABRIC SAM, ASST. PROFESSOR, DEPT. OF MANAGEMENT STUDIES, NMCC,
MARTHANDAM

6. ESSENTIALS OF A VALID ACCEPTANCE
5. A counter offer is not an acceptance
• In the previous example, , Helena proposed to sell her scooter for Rs. 30,000 to
Wendy. If Wendy negotiated the scooter for Rs.20,000 with Helena, it is not
acceptance as it is a counter offer.
6. An acceptance may be revoked at any time before the communication of the
acceptance is complete, but not afterwards.
S.M. GOLDYN ABRIC SAM, ASST. PROFESSOR, DEPT. OF MANAGEMENT STUDIES, NMCC,
MARTHANDAM

7. TERMINATION OF AN OFFER
• Lapses after a stipulated or reasonable time.
• When a offeree fails to fulfil a condition precedent to
acceptance
• Termination by death or insanity
• When it is rejected by the offeree
• When it is revoked by the offerer before acceptance
• When it is not being accepted in the mode prescribed
S.M. GOLDYN ABRIC SAM, ASST. PROFESSOR, DEPT. OF MANAGEMENT STUDIES, NMCC,
MARTHANDAM

8. S.M. GOLDYN ABRIC SAM, ASST. PROFESSOR, DEPT. OF MANAGEMENT STUDIES, NMCC,
MARTHANDAM