Acceptance

Introduction

• An agreement emerges from the

acceptance of the offer.
• Offer creates no legal rights until its
acceptance.
• Acceptance is an expression by the
offeree of his willingness to be bound
by the terms of the offer.
 Introduction

• The proposal is said to be accepted when

the person to whom the proposal is made
signifies his assent thereto. A proposal
when accepted becomes a promise.

• An offer unless accepted, cannot become

an agreement. Acceptance is essential to
convert an offer into an agreement. Thus,
a proposal or an offer lies unfructified
unless it is accepted.
 Type of Acceptance

• An acceptance may be conditional, express, or implied.

• Conditional Acceptance
• A conditional acceptance, sometimes called a qualified
acceptance, occurs when a person to whom an offer has
been made tells the offeror that he or she is willing to
agree to the offer provided that some changes are made
in its terms or that some condition or event occurs. This
type of acceptance operates as a counteroffer. A
counteroffer must be accepted by the original offeror
before a contract can be established between the parties.
•
 Type of Acceptance
• Express Acceptance
• An express acceptance occurs when a person clearly and
explicitly agrees to an offer or agrees to pay a draft that is
presented for payment.
• Implied Acceptance
• An implied acceptance is one that is not directly stated but
is demonstrated by any acts indicating a person's assent to
the proposed bargain. An implied acceptance occurs when
a shopper selects an item in a supermarket and pays the
cashier for it. The shopper's conduct indicates that he or
she has agreed to the supermarket owner's offer to sell the
item for the price stated on it.
 Introduction
• Modes
• By express words spoken,
• In writing,
• By conduct.
Example; Let's say a manufacturer of tablets and computers called Soft
Touch needs electrical components from a supplier in Dubai. The Dubai
company requests a time draft requiring the Soft Touch, the importer
to pay in 60 days from acceptance of the documents.
The goods are shipped to Tanzani port, and the documents are sent
from the Dubai bank to the importer's bank in Tanzania. Once the
goods arrive at the port, the Tanzania bank presents the documents to
the Soft Touch (importer). The importer accepts the documents and
agrees to pay the invoice in 60 days for the cost of the merchandise.
With the documents in hand, Soft Touch can take them to the port and
collect the goods.
 Introduction

When A writes a letter to B stating the above

offer and B answers him in the affirmative, in
writing. This is an acceptance of an express
written acceptance.
A widow promised to settle some immovable
property on her niece if the niece stayed with
her. Consequently, the niece stayed with her,
till her death. Held, the niece was entitled to
the property since, there was an implied
acceptance by her conduct.
 Introduction

• Effect:
• Offer alone or acceptance alone is
“inactive”, “inert” and “ineffective”.
• By itself, they cannot lead to the
formation of a contract.
• A legal right thus will be created only
when there is a lawful offer by one party
and its lawful acceptance by another
party.
 Legal rules as to acceptance

• It must be absolute and unqualified

• An acceptance to be effective must be absolute
and unqualified and of all the terms of offer.
• A conditional or a qualified acceptance is no
acceptance at all.
• If there is any variation, even of unimportant
point, there is no contract.
• An acceptance with a variation is no acceptance
but is a mere counter proposal which is for the
original offeror to accept or not.
Legal rules as to acceptance

• Examples:
• M offered land to N at Tshs. 2 million.
• N accepted and enclosed tshs. 1.5
million with a promise to pay the
balance by monthly instalments of Tshs.
100,000/- each.
• Held, there was no contract between M
and N as this was not an unqualified
acceptance.
 Legal rules as to acceptance
• It must be expressed in some usual manner
• Except where the offeror prescribed a
particular mode of acceptance, the
acceptance must be made in such manner
that it may come to the knowledge of the
proposer.
• If the offeror prescribes a mode of
acceptance, the acceptance must be
given accordingly.
 Legal rules as to acceptance

• E.g. if the offeror says, “Wire Reply” and the

reply is sent by post, there is no acceptance of
the offer.
• If the offeree fails to follow the prescribed mode
of acceptance, the proposer my, within a
reasonable time after the acceptance is
communicated to him, insist that the proposal be
accepted in the prescribed manner.
• If he does not inform the offeree, he is deemed
to have accepted the acceptance although it is
not in the desired manner.
 Legal rules as to acceptance
• Example:
• A offers to buy certain quantity of cotton from B at a certain price
and asks B to send a telegram, if he accepts.
• B writes a letter accepting the offer. A may insist on a telegram
from B; but if he does not insist, the acceptance is good.
 Legal rules as to acceptance

• It must be by the party named in the offer

• An offer made to a particular person is to be accepted by him
alone, because he is the only party intended to accept.
• It cannot be assigned to another or accepted by another without
the consent of the person making it.
• Example:
• X sells his business to Y without disclosing this fact to his
customers.
• Z, was one of such customers. Z sent an order for goods to X by
name.
• Y received it and sent a letter of acceptance.
• Held, there was no contract between Y and Z because Z never
made an offer to Y.
Legal rules as to acceptance

• However, if it is made generally, any member of

the public may accept it.
• Example:
• A offers by advertisement a reward of Tshs.
50,000/- to anyone who will bring his lost dog.
• Any member of the public can accept this offer.
 Legal rules as to acceptance
• An acceptance must be communicated to the offeror
• Just as the offer should be communicated to the acceptor, the
acceptance must also be communicated to the offeror.
• If the offeree remains silent and does nothing to show that he has
accepted the offer, no contract is formed.
• An acceptance must be communicated to the offeror
• The acceptor should do something to signify his intention to
accept.
• A mere mental acceptance not evidenced by words or conduct is,
in the eyes of law, no acceptance.
• But the party entitled to get the communication of acceptance can
waive that right expressly or impliedly.
 Legal rules as to acceptance

• Examples
• 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.
• Through oversight the document remained in the
drawer.
• Held, there was no contract, because there is no
communication.
 Legal rules as to acceptance
• Examples
• F offered by letter to buy B’s car for Tshs. 3
million, saying “If I hear no more about it, I shall
consider the car mine at Tshs. 3 million.
• B did not write to F at all, but he told an
auctioneer who was selling his cars not to sell that
particular car because he has sold it to F.
• Examples
• The auctioneer inadvertently sold the car. Held, F
had no right of action against the auctioneer as the
car had not been sold to him, his offer of Tshs. 3
million not having been properly accepted.
Legal rules as to acceptance

• The mere mental determination to accept

unaccompanied by any external indication
will not be sufficient.
• A contract will thus be binding only when
the acceptor has done something to
signify his intention to accept and not
when he has only made up his mind to do
so.
Legal rules as to acceptance

• In certain cases, however, communication

of acceptance is not necessary.
• The offeror may prescribe a particular
mode of acceptance, then all that the
acceptor has to do is to follow that mode.
• In particular “Performance of the
conditions of a proposal, of the
acceptance of any consideration for
reciprocal promise which may be offered
with a proposal is an acceptance of the
proposal”.
Legal rules as to acceptance

• Such proposals demand acceptance by

performance.
• Thus in the following instances,
acceptance need not be express but can
be inferred from
• Express conduct, or
• Implied conduct.
 Legal rules as to acceptance
• Express Conduct
• By performance of Conditions
• Examples
• A newspaper advertisement offering $ 100
to anyone who contracted influenza
despite using smoke-ball, a patent
medicine, in a specified way appeared.
• After reading the advertisement Mrs Carlill
used the smoke-ball but nevertheless got
influenza.
 Legal rules as to acceptance
• She claimed the reward.
• The company contested the claim on the ground that
she should have notified them of her acceptance of
the offer.
• Held, the use of smoke ball by Mrs. Carlill constituted
acceptance of the offer by conduct, and no formal
notice was necessary.
• Examples
• A widow promised to settle some immovable property
on her niece if the niece stayed with her.
• The niece stayed with her at her residence till her
death.
• Held, the niece was entitled to the property because
she had accepted the aunt’s offer by going to her
residence and staying with her as desired.
 Legal rules as to acceptance
• By acceptance of consideration
• Examples
• A bank informed all the clients regarding
higher rates of interest to be charged
henceforth.
• Y having come to know of this fact,
subsequently accepted the loan.
• The contention of Y was that since he had
not intimidated the bank accepting the
clause (of higher interest), he is not bound to
pay the higher rate of interest.
 Legal rules as to acceptance
• Held, acceptance of money (i.e. consideration)
after prior information that higher rates of
interest would be charged, amounts to
acceptance of the consideration offered along
with a proposal.
• By accepting a benefit or service
Example
• A bus driver offers to carry passengers to City
centre for Tshs. 100/-. A takes his seat in the bus
and is taken to City Centre.
• A is deemed to have accepted the offer of the
bus drives by receiving the benefit or service
and shall be bound to pay Tshs. 100/- the fare.
 Legal rules as to acceptance
• Implied Conduct.
It may be noted that in the following cases law
shall presume communication of acceptance to the
offeror even though the offeror has not come to
know of it at all.
• Acceptance of an offer by conduct
When the offeree observes all the conditions which
the offeror has prescribed then he is not required
to communicate his acceptance expressly to the
offeror but observance of the conditions of the
offer will certainly amount to acceptance of the
offer.
 Legal rules as to acceptance

• Acceptance of an offer by conduct

• Offeror in such cases shall be estopped
from pleading absence of the knowledge
of acceptance.
• Examples
• A by a way of offer sends articles to B
without any prior order.
• If B consumes the goods, it shall be
presumed that B has accepted the offer.
 Legal rules as to acceptance

• Acceptance communicated to an agent

• Communication of acceptance to the agent in
cases when the offer was made through the
agent or the agent had the authority to
receive acceptance of the offer, shall be valid
and binding upon the principal.
• Examples
• If A sends the offer to B through the agency of
C, and B in turn gives his acceptance to C, the
acceptance shall be complete even if C
forgets it or loses it.
 Legal rules as to acceptance

• Waiver of the communication of acceptance.

• In those cases, where the offeror himself had waived the
requirement of the communication of acceptance, it need not be
communicated and the proposal shall become a contract without
such communication of the acceptance simply because of the fact
that the acceptor has acted in the manner prescribed by the
proposer
• Acceptance by post
• is considered to be complete as against the proposer as soon as the
letter of acceptance is posted.
• It is immaterial whether the letter ever reaches the proposer or
not.
• Communication of acceptance against the proposer shall be
considered thus to be complete without his getting even the
knowledge about it.
 Legal rules as to acceptance

• Acceptance must be within a reasonable time

• The acceptance must be made while the offer is
still in force i.e. before the offer lapses.
• Acceptance made after the offer has been
withdrawn is invalid.
• If any time limit is prescribed in the offer, it
should be accepted within that prescribed time
limit.
• However, if no time limit is prescribed, it must be
accepted within a “reasonable time”.
• What is a “reasonable time” depends upon
circumstances of each case.
 Legal rules as to acceptance

• Examples
• M offered to take shares in company R on June 8.
• 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.
• Acceptance cannot be in ignorance of the offer
• Acceptance cannot precede the offer nor an
acceptance in total ignorance of an offer result in a
contract.
Legal rules as to acceptance

• Examples
• S, offered a reward to anyone who
returned his lost dog.
• F brought the dog to S without having
heard of the offer.
• Held, F was not entitled to the reward,
because F was unaware of the fact and
hence the question of acceptance never
arose.