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    Sunday, 26 March 2017

    When acceptance converts a proposal into promise

    Acceptance must be absolute
    In order to convert a proposal into a promise, the acceptance must--

    1. be absolute and unqualified

    2. Be expressed in some usual and reasonable manner, unless the proposal prescribes the manner in which it is to be accepted. If the proposal a manner in which it is to be accepted and the acceptance is not made in such manner, the proposer may within a reasonable time after the acceptance is communicated to him, insist that his proposal, shall be accepted in the prescribed manner, and not otherwise; but if he fails to do so, he accepts the acceptance.

    Absolute and unconditional acceptance
    A .transaction, to be recognized as a contract must, in 'its ultimate analysis, resolve itself into a proposal and its absolute and unqualified acceptance. If it contains a material variation of the terms of the offer, there is no consensus ad idem or agreement upon which a contract can be founded. Until there is absolute acceptance of a proposal the parties are still in the stage of negotiations and no legal obligations attach to them. Therefore, offeree would not be bound by acceptance, which is not absolute and unqualified.

    Where an acceptance is in substance only a provisional arrangement subject to something more being done to complete the arrangement it cannot make a binding contract. In order to decide whether there is an absolute and unqualified agreement between the parties to a contract, the entire negotiation and correspondence should be considered.

    Acceptance by conduct
    An absolute and unqualified acceptance may; even when even is no express communication from the offeree, be inferred from his conduct.

    Oral contract
    Where by the absolute and unequivocal acceptance of an offer a binding contract has come into existence between the parties the non-execution of a formal, document cannot absolve the parties of their engagement.

    Mutuality is necessary
    A contract must have an element of mutuality. An acceptance which at the same time exempts the acceptor of any obligation is not an acceptance capable of creating a binding contract.

    Acceptance of revoked offer
    Where acceptance of defendant to the offer of the plaintiff was formally made after receiving revocation from plaintiff, no concluded and binding contract between parties had come into existence.

    Acceptance of all terms necessary
    An acceptance must be absolute and unconditional and must correspond to the terms of the offer without leaving any term open to further negotiations. An acceptance which does not extend to all the terms of a contract cannot make a binding contract.

    Conditional acceptance
    An acceptance which is qualified by certain conditions cannot amount to an absolute and unqualified acceptance which is capable of resulting in a complete contract. It is equivalent to a new offer which may either be accepted or rejected. Thus, when an order for goods is accepted "subject to confirmation by mail" the acceptance is conditional and the contract cannot be said to have been complete on the date of such acceptance.

    Condition precedent to contract may be waived
    A condition in a concluded contract of insurance that the liability under it will attach itself only on the insured paying the premium is only a condition precedent for the policy taking effect inserted for the benefit of the insurer which can be waived by him.

    An acceptance with a variation in the terms of an offer or with a qualification is simply a counter-proposal. Its communication does not low amount to the acceptance of a proposal or an offer made by the other party. On the other hand, a counter-offer amounts to a rejection of the 6, original offers. An offer once refused is dead and cannot be accepted r unless renewed. In the latter case if it is accepted a binding contract is created.

    Nature of variation in proposal
    It is not every slight variation in the acceptance that would affect the validity of a contract. It must be a material variation to bring about that result. It depends on the facts and circumstance of each case whether a particular statement amounts to a counter-proposal or not. To hold a particular statement as a counter-proposal, it is necessary to show that the same amounted to a substantial variation in the offer made. If something is added by way of explanation or to elucidated a particular term or to make express which otherwise is implied, it will not amount to a counter-proposal.

    Withdrawal of counter-proposal
    If a counter-proposal is withdrawn before it has been either accepted or rejected, then it must be held that the original proposal stand unrejected, and is capable of being accepted.

    Acceptance of counter-proposal
    A counter-proposal must he accepted by the original offeror before a contract can result. Where the plaintiff while accepting the defendant's offer of a lease made a counter-proposal for insertion of a clause in the lease note providing for a renewal of lease for another five years the defendant's estate manager replied. "I am making necessary arrangements." It was held that the counter-offer was not accepted.

    Fresh negotiation after contract is complete
    Where an offer is accepted absolutely and unconditionally the contract is complete, any further negotiations between the parties after that would not be a counter-offer. They will only be negotiations for a new contract.

    Manner of acceptance
    Where a person in an offer made by him to another person expressly or impliedly intimates a particular -mode of acceptance as sufficient to make the bargain binding, it is necessary for the other person to whom such offer is made to' follow the indicated mode of acceptance. If acceptance is not made in such manner, there is no contract between the parties.

    Assent by conduct
    Assent must be by express words or positive conduct. Where a constituent of a bank after a notices enhancing the rate of interest renews his over draft account and also obtains further advances it must be taken that he has accepted the implied proposal of the bank contained in the notice to keep alive his account and to make further advances only at the higher rate of interest and therefore he is bound to pay such interest.

    Silence of offeree

    The law does not cast a duty on the person to whom an offer is made to reply to that offer and 'fence acceptance cannot be inferred from the silence of the offeree.
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