Mode of Communication of Acceptance

Introduction

In contract law, an offer becomes a promise only when it is properly accepted.
The Indian Contract Act, 1872 lays down rules on how acceptance must be communicated.

Acceptance must be clear, unconditional, and communicated in a proper manner.
These rules ensure that both parties understand when a contract is legally formed.

Meaning / Definition

Under Section 7 of the Indian Contract Act, 1872, acceptance must satisfy two essential conditions:

1. Acceptance must be absolute and unqualified (complete agreement without any changes).
2. Acceptance must be communicated in a usual or reasonable manner, unless the offer specifies a particular method.

If the offer prescribes a specific method of acceptance, it should normally be followed.

Modes or Types of Communication

Absolute and Unqualified Acceptance

Acceptance must be clear and unconditional.
If the person receiving the offer changes the terms, it is not acceptance but a counter-offer (new offer made in response to the original offer).

A counter-offer cancels the original offer.

Example:

• A offers to sell his bicycle to B for ₹2000.
• B replies that he will buy it for ₹1500.

This is not acceptance. It is a counter-offer.

Acceptance in Usual or Reasonable Manner

If the offer does not specify a method of acceptance, the acceptance can be communicated in any usual or reasonable way.

Usual methods include:

• Post
• Telephone
• Telegram
• Email
• Personal messenger
• Conduct (actions showing agreement)

These are methods normally used in business transactions.

Acceptance in Prescribed Manner

Sometimes the offer specifies a particular method of acceptance.

Example:

• “Send acceptance by registered post.”
• “Confirm acceptance by email.”

In such cases, acceptance should be made using that method.

The offer may also require certain conditions to be fulfilled, such as:

• Payment of advance money
• Signing a document

If these conditions are not fulfilled, a valid contract may not arise.

Acceptance by Conduct

Acceptance may also be implied through conduct (actions that show agreement).

Example:

• A offers to supply goods.
• B receives the goods and uses them.

B’s actions may show implied acceptance.

However, silence cannot be treated as acceptance.
An offeror cannot say that no reply means acceptance.

Completion of Communication (Section 4)

Section 4 of the Indian Contract Act, 1872 explains when communication of acceptance becomes complete.

As against the proposer (person making the offer)

Communication is complete when acceptance is put into transmission, so that the acceptor can no longer control it.

Example:
When a letter of acceptance is posted.

As against the acceptor (person accepting the offer)

Communication is complete when the acceptance comes to the knowledge of the proposer.

Example:

• A sends an offer to B by post.
• B sends acceptance by post.

Communication is complete:

• Against A: when B posts the letter.
• Against B: when A receives the letter.

The law generally presumes that a properly posted letter reaches its destination.

Important Case Law

Hyde v. Wrench (1840)

Facts:

• A offered to sell a farm to B for £1000.
• B replied that he would buy it for £950.
• A refused.
• B later agreed to pay £1000 and claimed a contract existed.

Judgment:

The court held that no contract existed.

Reason:

• B’s offer of £950 was a counter-offer (new offer).
• This ended the original offer.
• Once the original offer ended, it could not be accepted later.

Practical Example

A company sends an offer to supply computers.

The offer states:

“Please confirm acceptance by email.”

If the buyer:

• Sends acceptance by email → valid acceptance.
• Sends acceptance by phone call → may not be valid if the method specified must be followed.

If no method is specified, acceptance by email, phone, or letter may all be valid.

Summary

• Acceptance must be absolute and unconditional.
• Conditional acceptance becomes a counter-offer (new offer).
• Acceptance must be communicated in a usual or reasonable manner unless a method is prescribed.
• If the offer specifies a method of acceptance, that method should normally be followed.
• Silence cannot amount to acceptance.
• Communication of acceptance is complete at different times for the offeror and acceptor (Section 4).
• A counter-offer cancels the original offer, as seen in Hyde v. Wrench.