II. Essentials of a Valid Acceptance

1. It Must Be Communicated

2. It Can Be Express or Implied

a. Express:

b. Implied:

Important Cases:

III. Postal Rules: Timeline of Communication & Revocation

IV. Four Ways an Offer is Revoked (Section 6)

By Notice of Revocation:

By Lapse of Time:

By Failure to Fulfill a Condition Precedent:

By Death or Insanity:

V. Modern Relevance Note

*****

I. Concepts & Definitions-

1. The Second Step: A proposal, once accepted, becomes an agreement. Therefore, acceptance is the vital second step in forming a binding contract.

2. Definition (Section 2(b)): Acceptance occurs "when the person to whom the proposal is made signifies his assent thereto...".

3. The Gunpowder Analogy: Legal scholar Anson famously noted, "Acceptance is to an offer what a lighted match is to a train of gunpowder". In English law, this means it creates an irreversible effect ; however, under Indian law, acceptance remains revocable under specific conditions.

II. Essentials of a Valid Acceptance

For an acceptance to be legally binding, it must satisfy five strict conditions:

1. It Must Be Communicated

Acceptance must be actively communicated to the offeror or an authorized person. Mental intent or internal decisions are insufficient.

Important Case: Felthouse v. Bindley (1862) 11 CB (NS) 869

i. Facts: An uncle offered to buy his nephew's horse, stating, "If I hear no more about him, I consider the horse mine". The nephew intended to accept and told his auctioneer not to sell the horse, but he never replied to his uncle. The auctioneer accidentally sold the horse anyway, and the uncle sued.

ii. Ruling: The court held there was no contract. Silence does not amount to acceptance; it must be communicated.

2. It Can Be Express or Implied

a. Express: Delivered via spoken or written words.

b. Implied: Demonstrated through an act or conduct.

Important Cases:

1. Carlill v. Carbolic Smoke Ball Co [1893] 1 QB 256.: The company offered a £100 reward to anyone who caught influenza after using their smoke ball as directed. Mrs. Carlill used it and still got sick. The court ruled that by purchasing and using the product according to the terms, she had provided valid implied acceptance.

2. Amit Mondal v. Pannalal Das AIR 2018 (NOC) 238 (CAL): A seller signed an agreement and accepted earnest money from a purchaser but later tried to deny the contract. The court held that accepting the earnest money constituted an implied acceptance of the contract.

3. It Must Be Absolute and Unqualified

Acceptance must perfectly match the terms of the offer. Any deviation or conditional acceptance acts as a rejection and triggers a counter-offer, causing the original offer to lapse.

Important Case: Hyde v. Wrench (1840) 3 Beav 334

Facts: A defendant offered to sell a farm for £1,000. The plaintiff countered with an offer of £950, which was rejected. The plaintiff then tried to accept the original £1,000 price.

Ruling: The court held that the counter-offer of £950 completely destroyed the original offer. The defendant was under no obligation to fulfill the contract.

4. It Must Follow the Prescribed Mode

If the proposer insists on a specific method of communication (e.g., email, telegram), the acceptance must use that mode. If no mode is specified, it must be sent via a usual and reasonable manner (like standard mail).

5. It Must Be Given Within a Reasonable Time

Acceptance must be delivered within the timeframe specified by the offeror. If no timeline is set, it must be given within a "reasonable time," which is a question of fact decided by the courts depending on the context.

III. Postal Rules: Timeline of Communication & Revocation

When parties handle contracts remotely (via post/telegraph), Section 4 and Section 5 of the Indian Contract Act establish the exact moments liabilities begin:

Action	Complete Against the Sender	Complete Against the Receiver
Communication of Offer	N/A	When it comes to the knowledge of the receiver (e.g., when the letter is delivered).
Communication of Acceptance	Against the Proposer: When the letter is posted (put in transit), meaning the proposer is now bound.	Against the Acceptor: When the letter physically reaches the proposer.
Communication of Revocation	When the person revoking puts the notice into transmission (e.g., dispatches the telegram).	When it comes to the knowledge of the person receiving it.

Note on Postal Risk: Once an acceptor correctly addresses, stamps, and posts an acceptance letter, the proposer is legally bound—even if the letter is delayed or lost entirely in transit.

IV. Four Ways an Offer is Revoked (Section 6)

A proposal can be canceled or terminated in any of the following ways:

By Notice of Revocation: The proposer can revoke the offer at any time before the

communication of acceptance is complete against them.

Henthorn v. Fraser [1892] 2 Ch 27:

An offer was open for 14 days. The plaintiff posted an acceptance the next day. The defendant tried to withdraw the offer after the acceptance was posted but before receiving it. The court held the revocation was ineffective because the contract was already concluded the moment the acceptance was mailed.

By Lapse of Time: If the specified time window closes, or a reasonable timeframe expires without a response.

By Failure to Fulfill a Condition Precedent: If the offer requires a specific action first (like paying an earnest deposit or leasing a secondary property) and the acceptor fails to perform it, the offer lapses.

By Death or Insanity: The death or mental incapacity of the proposer automatically operates as a revocation of the proposal under Indian law.

V. Modern Relevance Note

Because these rules were codified primarily for physical mail and telegrams, the text notes that the logistical intricacies of postal communication delays have largely lost practical relevance in today’s instant, digital age.

*****