Page 28 - DCOM103_COMMERCIAL_LAW

Unit 2: Offer and Acceptance

Notes
Examples: (a) A made an offer to B to purchase a house with possession from
25th July.

The offer was followed by an acceptance suggesting possession from 1st August. Held,
there was no concluded contract [Routledge v. Grant, (1828) 4 Bing. 6531].
(b) M offered to sell a piece of land to N at £ 280. N accepted and enclosed £ 80 with
a promise to pay the balance by monthly instalments of £ 50 each. Held, there was no
contract between M and N, as the acceptance was not unqualifi ed [Neale v. Merret, (1930)
W.N. 189].
(c) N offered to buy J’s horse if warranted quiet in harness. J agreed to the price and
warranted the horse quiet in double harness. Held, there was no acceptance [Jordon v.
Norton, (1838) 4 M. & W. 155].
(d) A says to B, “I offer to sell my car for ` 50.000.” B replies, “I will purchase it for ` 45,000.”
This is no acceptance and amounts to a counter-offer.
2. It must be communicated to the offeror. To conclude a contract between the parties; the
acceptance must be communicated in some perceptible form. A mere resolve or mental
determination on the part of the offeree to accept an offer, when there is no external
manifestation of the intention to do so, is not suffi cient [Bhagwan Dass Kedia v. Girdhari Lal,
A.I.R. (1966) S.C. 543]. In order to result in a contract, the acceptance must be a “matter of
fact”.

Examples: (a) A tells B that he intends to marry C, but tells C nothing of his
intention.
There is no contract, even if C is willing to marry A.
(b) F offered to buy his nephew’s horse for £ 30 saying: “If I hear no more about it I shall
consider the horse is mine at £ 30.” The nephew did not write to F at all, but he told his
auctioneer who was selling his horses not to sell that particular horse because it had been
sold to his uncle. The auctioneer inadvertently sold the horse. Held, F had no right of action
against the auctioneer as the horse had not been sold to F, his offer of £ 30 not having been
accepted [Felthouse v. Bindley, (1862) 11 C.B. (N.S.) 869].
(c) A draft agreement relating to the supply of coal was sent to the manager of a railway
company for his acceptance. The manager wrote the word ‘approved’ and put the draft in
the drawer of his table intending to send it to the company’s solicitor for a formal contract
to be drawn up. By some oversight the document remained in the drawer. Held, there was
no contract [Brogden v. Metropolitan Rail Co., (1877) 2 A.C. 666].
In some cases the offeror may dispense with the communication of acceptance. It happens
when the performance of certain conditions takes place, or some required act is done
(Sec. 8). For example, in Carlill v. Carbolic Smoke Balls Co., (1893) I Q.B. 256, where Carlill
used the smoke balls of the company according to its directions and contracted infl uenza,
it amounted to acceptance of the offer by doing the required act and she could claim the
reward.

3. It must be according to the mode prescribed or usual and reasonable mode. If the acceptance
is not according to the mode prescribed, or some usual and reasonable mode (where no
mode is prescribed) the offeror may intimate to the offer within a reasonable time that the
acceptance is not according to the mode prescribed and may insist that the offer must be
accepted in the prescribed mode only. If he does not inform the offeree, he is deemed to
have accepted the acceptance [Sec. 7 (2)].

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