Acceptance for CLAT - Practice Questions & MCQ

In contract law, acceptance is one of the key elements that solidify the formation of a legally binding contract.

Essentials of Acceptance:

Unconditional Agreement:

• Acceptance signifies the complete and unqualified agreement to the terms and conditions put forth by the offeror. It means that the offeree, the party receiving the offer, must consent to all the terms and conditions exactly as they are without any alterations or conditions.
• Example: A offers to sell a piece of land to B for ₹1,00,000. B agrees to buy the land for ₹1,00,000 without suggesting any changes or additional requirements. This represents an unconditional acceptance of the offer.

Communication:

• Acceptance must be communicated to the offeror, ensuring that both parties are aware of the agreement. In most cases, silence or inaction does not constitute acceptance, unless the offeror explicitly states that silence will be regarded as acceptance.
• Example: If A offers to rent a house to B and specifies that B's silence will be treated as acceptance, then if B receives the offer and does not respond, it is considered an acceptance of the rental terms.

Mode of Acceptance:

• The mode of acceptance should align with the method prescribed in the offer. If the offeror does not specify a particular method, the acceptance should be communicated in a reasonable and customary manner. Acceptance can be expressed orally, in writing, or through conduct, as long as it follows common communication practices.
• Example: If the offer states that acceptance should be made via fax, sending a fax indicating acceptance is a valid mode of acceptance.

Time Frame:

• Acceptance must occur within the time frame stipulated in the offer. If the offeror does not specify a time limit, the acceptance should be made within a reasonable period. Promptness is encouraged, as unreasonable delays may result in the offer becoming void.
• Example: A offers to provide catering services for an event and specifies that B has 3 days to accept the offer. If B accepts after 4 days have passed without a reasonable explanation for the delay, the acceptance may not be valid.

Case Law Example - Bhagwandas Goverdhandas Kedia v. M/s. M. V. Shah & Co.

• Background
  • This case deals with the concept of acceptance in contract law and the distinction between a valid acceptance and a counter-offer. Here are the key details of the case:
• Facts
  • The plaintiff, Bhagwandas Goverdhandas Kedia, wanted to purchase 150 bales of cotton from the defendant, M/s. M. V. Shah & Co.
  • The defendant sent a telegram to the plaintiff offering to sell 150 bales of cotton at a certain price and mentioning that the offer would be open for a specific period.
  • The plaintiff responded to the telegram by accepting the offer but included a condition that the cotton should be of "good make" and that the contract should remain open for a further two days.
• Issue
  • The central issue in this case was whether the plaintiff's response, with the additional condition of "good make" and the extension of the offer's validity, constituted a valid acceptance or a counter-offer.
• Decision

The court held that the plaintiff's response did not constitute a valid acceptance but rather a counter-offer. Here's the reasoning behind the decision:

• Additional Condition: The plaintiff's inclusion of the condition regarding the quality of the cotton ("good make") altered the terms of the original offer. This change meant that the plaintiff was not accepting the offer as it was presented by the defendant but was introducing a new condition.
• Extension of Time: Similarly, the plaintiff's request to keep the offer open for an additional two days altered the time frame specified in the defendant's offer. This, too, constituted a change to the original offer.
  
  Based on these factors, the court concluded that the plaintiff's response was not an acceptance but a counter-offer. As a result, no contract was formed between the parties at that point.
   
• Legal Significance
  • This case underscores the importance of an acceptance being clear, unqualified, and in conformity with the terms of the original offer. Any attempt to introduce new conditions or alter the terms of the offer constitutes a counter-offer, which may lead to the rejection of the initial offer. 
  • It's a significant precedent in contract law, emphasizing the principle that acceptance must be absolute and unconditional to create a binding contract.