Page 29 - DCOM103_COMMERCIAL_LAW

Commercial Law

Notes
Example: A makes an offer to B and says: “If you accept the offer, reply by
wire.” B sends the reply by post. It will be a valid acceptance unless A informs B that the
acceptance is not according to the mode prescribed.
4. It must be given within a reasonable time. If any time limit is specifi ed, the acceptance

must be given within that time. If no time limit is specified, it must be given within a
reasonable time.
Example: On June 8 M offered to take shares in R company. He received a letter
of acceptance on November 23. He refused to take the shares. Held, M was entitled to
refuse as his offer had lapsed as the reasonable period during which it could be accepted
had elapsed [Ramsgate Victoria Hotel Co. v. Montefi ore, (1886) L.R. 1 Ex. 109].
5. It cannot precede an offer. If the acceptance precedes an offer, it is not a valid acceptance
and does not result in a contract.

Example: In a company, shares were allotted to a person who had not applied
for them. Subsequently when he applied for shares, he was unaware of the previous
allotment. The allotment of shares previous to the application is invalid.
6. It must show an intention on the part of the acceptor to fulfil terms of the promise. If no

such intention is present, the acceptance is not valid.
7. It must be given by the party or parties to whom the offer is made.
8. It must be given before the offer lapses or before the offer is withdrawn.
9. It cannot be implied from silence. The acceptance of an offer cannot be implied from the
silence of the offeree or his failure to answer, unless the offeree has by his previous conduct
indicated that his silence means that he accepts.

Examples (a) A wrote to B, “I offer you my car for ` 50,000. If I don’t hear from you in
seven days, I shall assume that you accept.” B did not reply at all. There is no contract.

(b) Harvey v. Facey, (1893) App. Cas. 552 discussed earlier in this Unit.
Acceptance given by a person other than the offeree or by a person who is not authorised to give
acceptance is ineffective in law. Likewise information received from an unauthorised person is
ineffective [Powel v. Lee, (1908) 24 T.L.R. 606].

Example: (i) A offered to sell his land to B for ` 50,000. B replied purporting to accept and
enclosed ` 10,000 promising to pay the balance of ` 40,000 by monthly installments of ` 5,000
each. Held, that B could not enforce acceptance because his acceptance was not unqualifi ed.
(ii) A offers to sell his house to B for ` 5,00,000. B replies, “I am prepared to buy your house for
` 5,00,000 provided you purchase my Maruti Car for ` 2,00,000”. There is no acceptance on the
part of B.
However, if some conditions are implied as a part of the contract and the offeree accepts the offer
subject to those conditions the acceptance will be treated as valid.

Example: A, a real estate company, offers to sell a flat to B and B agrees to purchase it

subject to the title to the flat being approved by B’s solicitor. The acceptance by B is absolute and
not qualified as it is presumed that A has a title to the property and it was not necessary for A to

mention anything about the title.

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