Acceptance- Meaning, Rules, Types, Examples
Acceptance is required for an offer to be regarded as complete and to turn into a commitment. Read the complete blog to learn more!
Izhar Ahmad11 Nov, 2023
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The Indian Contract Act of 1872 defines acceptance in Section 2 (b) as the moment when the person receiving a proposal expresses agreement, transforming the offer into an accepted promise. In essence, the complete acceptance by the offeree strengthens the offer into a firm promise.
Upon acceptance, not only does the proposal become a promise, but it also gains irrevocable status. Unlike an offer, which doesn't impose legal obligations, a promise, once accepted, establishes legal commitments between the parties involved. It's crucial to note that an offer remains revocable until accepted; however, once acceptance is communicated, withdrawal or revocation is no longer permissible.Want to Learn Everything About The Acceptance? Learn from an Expert!
Acceptance Meaning
Acceptance is defined as the moment when the individual to whom a suggestion is made shows their agreement, strengthening the offer. Consequently, when the offeree absolutely accepts the offer made by the offeror, this acceptance turns the proposal into a binding promise. The act of acceptance is crucial for the fulfillment of an offer, showing its end and shifting into a legally binding promise.Rules for Valid Acceptance
The following are the rules for valid acceptance:Acceptance Solely by the Offeree
The act of accepting an offer is restricted to the offeree, the person to whom the offer is presented. This principle of self-acceptance emphasizes that only acceptance by the offeree is deemed legitimate. Without the offeree's knowledge, a third party cannot accept the offer, unless the offeree has authorized an agent to accept on their behalf.Communication is Essential
For an offer to transform into a binding contract, the offeree must communicate their acceptance to the offeror. The offeree needs to be aware that an offer has been extended before expressing acceptance. Mere intent to accept is insufficient; clear communication is imperative.Adherence to Prescribed Mode
Acceptance must align with the specified manner outlined in the offer. If no particular mode is designated, acceptance should follow the customary business practice. Silence, in the absence of specified terms, is not regarded as acceptance.Unqualified and Absolute Nature
Acceptance must be unequivocal and without conditions. Conditional acceptance would constitute a counteroffer, negating the original offer. For instance, if B accepts A's offer to buy a cycle for $2,000 but insists on a reduced price of $1,500, it is not acceptance but a counteroffer. In the absence of specified regulations, acceptance should be expressed reasonably and ordinarily, in line with standard business practices. Implied acceptance may be demonstrated through actions or conduct. However, the law does not recognize silence as a valid form of acceptance; the offeror cannot assume acceptance in the absence of a response.Looking for the Best Commerce Coaching?
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Types and Examples of Acceptance
Acceptance in contract law can take various forms, each with its own implications. Here are the types of acceptance:Express Acceptance:
This occurs when the offeree explicitly communicates their agreement to the terms of the offer. It can be verbal or in writing, providing a clear expression of assent. Example: Rahul verbally agrees to purchase a vintage camera from Sonia for ₹10,000 during their conversation.Implied Acceptance:
Implied acceptance is not explicitly stated but inferred from the offeree's conduct or behavior. It suggests that, through actions, the offeree has accepted the terms of the offer. Example: Meera regularly receives a newspaper subscription at her doorstep without explicit renewal instructions, implying her ongoing acceptance of the service.Conditional Acceptance:
When the offeree accepts the offer but attaches certain conditions or requirements, it is considered conditional acceptance. However, conditional acceptance is generally treated as a counteroffer, and it does not result in a binding contract. Example: Arjun agrees to buy Riya's laptop for ₹30,000, but only if she includes additional software. This is a conditional acceptance.Unconditional Acceptance:
This is a straightforward and unqualified acceptance of the offer. The offeree agrees to all the terms and conditions presented in the offer without any modifications or conditions. Example: Priya unconditionally accepts Sameer's offer to provide graphic design services for her business at the agreed-upon rate of ₹50,000.Partial Acceptance:
If the offeree accepts only a portion of the offer and rejects the rest, it is termed partial acceptance. This can be complex, as it depends on whether the offeror is willing to accept partial acceptance. Example: Karan accepts part of Ananya's proposal for a joint venture but rejects the financial terms. This constitutes a partial acceptance.Cross Offer:
In a cross offer, both parties make identical offers to each other simultaneously. Since neither party is strictly the offeree or offeror, there is no acceptance until one party chooses to accept the other's offer. Example: Mohan offers to sell his car to Geeta for ₹5,00,000, while simultaneously Geeta offers to buy the same car from Mohan for the same amount. This creates a situation of a cross offer.Silence as Acceptance (Exception):
While generally not considered a valid form of acceptance, there are exceptions where silence may be construed as acceptance. This typically occurs when the parties have a prior understanding that silence will be treated as acceptance. Example: In a longstanding business relationship, where it is customary for Amar to receive a monthly supply of raw materials from Akbar, Amar's silence may be considered acceptance of the regular deliveries.Postal Rule or Mailbox Rule:
In cases where acceptance is communicated by mail or other means of long-distance communication, the acceptance is generally effective upon dispatch. This rule facilitates the smooth functioning of contractual relationships when parties are not in immediate proximity. Example: Nisha sends a letter accepting Vikas's job offer for ₹8,00,000 per annum. The acceptance is generally effective upon posting, following the mailbox rule.Acceptance FAQs
What do you mean by acceptance?
Acceptance refers to the offeree's agreement to the terms of an offer, creating a binding contract in legal contexts.
What is acceptance in accounting?
In accounting, acceptance typically pertains to acknowledging the validity of financial transactions or documents.
What is acceptance in business?
In business, acceptance signifies the approval or agreement to terms, proposals, or contracts between parties involved in a transaction.
What is the acceptance process?
The acceptance process involves the offeree expressing agreement to the terms of an offer, leading to the formation of a legally binding contract.
What are the 4 rules of acceptance?
Acceptance must be communicated, unconditional, in the prescribed mode, and aligned with the terms of the offer.
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