OFFER AND ACCEPTANCE

MUHAMMAD JUNAID AKHTAR

LECTURER, DEPARTMENT OF LAW
THE UNIVERSITY OF FAISALABAD
 Acceptance of Offer

⚫ Definition:
⚫ When the person to whom the offer is made shows
his consent, the offer is said to be accepted. It is
agreeing to the proposal, willingness to accept the
proposal by the offeree.
⚫ The person who accepts the offer is known as
offeree/promisee/acceptor.
⚫ The proposal when accepted, it becomes a promise
or set of promises.
⚫ without the acceptance of the proposal no
agreement can come into existence
 EXAMPLE

⚫ A offers to sell his house to B for Rs 1crore.B accepts

the offer to purchase the house for Rs 1crore.This is
an acceptance.
 Essential ELEMENTS of a valid Acceptance

⚫ It must be Given by the Offeree:

⚫ An offer can be accepted only by the person to
whom it is made. It can not be accepted by any other
person.
⚫ EXCEPTION TO THIS RULE:
Acceptance by authorized agents of the offeree
may accepts the offer as they are legally authorized
to do so.
Similarly if offer is made to any particular group, it
can be accepted by any member of that group. This
is called acceptance by the specific class or group.
Similarly if the offer is made to the general public at
large, it can be accepted by any member of the
public who has the knowledge of the offer. This is
called the acceptance by the public in general.
 ACCEPTANCE MUST BE ABSOLUTE AND
UNCONDITIONAL

⚫ Acceptance of offer by the offeree must be as a whole

and without any counter condition by the offeree.
Otherwise it will not be turned into valid contract.
The offeree can either accept the offer as a whole or
reject as a whole. Counter offer can only be accepted
if the offeror agrees to it. otherwise it will not be a
valid contract.
 Example
⚫ A offer to sell his bicycle to B on Rs 20000 and B
replies that he can buy it on Rs 10000,there is a
material variation in the acceptance.Therefore,there
is no promise and agreement between the offeror
and offeree as the acceptance is not and
unconditional.
⚫ A offers to sell his 5marlas plot in B17 Islamabad on
lump sum amount of PKR 60lacs….B replies that he
can buy it but on one condition that PKR 30 lacs will
be paid on spot, and for other Pkr30lacs in
installments in two year is not valid acceptance..and
contract can not take effect.
 Acceptance must be in a prescribe Manner

⚫ If the offeror in his offer has prescribed any particular manner of

acceptance. Acceptance must be given according to that particular
manner.
⚫ Eliason vs. Henshaw:In this case Eliason accepts the offer to buy
flour from henshaw.Henshaw further requested that the letter of
acceptance of the same should be sent to him through harper ferry
within the time fixed.Eliason sent the letter of acceptance by post
thinking it would reach faster than the harper ferry, but unfortunately
the letter arrived after the prescribe date and was too late by date.
Henshaw was not bound by the acceptance as the acceptance reached
to henshaw was not in a prescribed time. Henshaw was not bound to
the performance of the contract as the mode of acceptance was not
according to the prescribe manner and time as prescribe by the offeror.
Eliason filed a suit in the court of Law for non performance of the
contract.But case was decided in favour of Henshaw as the henshaw
did not accept the offer as prescribed by him to eliason.
 Reasonable time

⚫ If no particular manner is prescribed in the offer then

acceptance should be made in a reasonable time.
⚫ What is reasonable time is a question of fact depending on
case to case and circumstances.
⚫ For example: An offer for buying strawberry boxes should
be accepted as soon as possible, as the goods are perishable,
so if offer is made to Mr. A by Mr.B and the offer is not
accepted in a day, Mr.B may sell the strawberry to
somebody else.
⚫ Acceptance can be given at any time before the offer is
revoked/terminated/cancelled.
 Rules of Acceptance of Offer

There are different rules as to the acceptance of offer

in different Countries.
Mirror Image Rule: According to this rule, the
acceptance must be 100 per cent according to the
terms and conditions of the offer. If offer is not
accepted according to the directions given in the
offer by the offerer,regarding the mode of
acceptance,time,date or any other terms and
conditions etc…the offer will be revoked and it will
not be a valid contract.
 Applicability of Mirror Image Rule

In Pakistan the mirror image rule is applicable, same

rule is applicable in India and England as well.
The reason behind the applicability of the same rule
in Pakistan and India is that Pakistan and India
were once the colonies of England, Therefore the
same rule of England is also enacted in India and
Pakistan Contract Law.
After,Independence,Pakistan and India did not
change their Law of Contract and so the same is
prevailing in our country as well as in India.
 GAP FILLER RULE

⚫ This rule is applicable in the United States of

America. According to this Rule if there is any kind
of gap in offer and acceptance, it must be filled by
the Court with its own interpretation and discretion
keeping in mind the interest of both the parties. As
the object of the court is to facilitate the Commercial
Contracts, if there is minute gap, rather than to fully
reject the contract by either parties, the Court gives
it ruling and interpretations keeping in mind the
interest of both the parties.
 EXAMPLE

⚫ If the time period for the acceptance is not

mentioned in the offer…..the court may keeping in
mind the interest of the parties may give its
interpretation, that the offer shall be accepted
within reasonable time.
⚫ For example what shall be the reasonable time in
accepting the perishable goods.
⚫ When the place for the delivery of contract items is
not mentioned in the contract. What would be the
place of delivery…?
 Acceptance must be communicated to the offeror

⚫ In order to form a contract, the acceptance must be

communicated to the offeror in a clear manner by
the offeree or his authorized agent.
⚫ If the offeree remains silent and does not show that
he has accepted the offer, no contract is formed. The
acceptor should do something to show his intention
of acceptance..thus if the person accepts the offer ,
but fails to email or by post send the letter of
acceptance, it is not an acceptance.
 EXAMPLES

⚫ A proposes his house to sell to B,B also shows his

willingness to buy the house, but does not send a
reply to A, as a letter of Acceptance. Thus A sold his
house to C,despite B intention's to buy the said
house,has no legal remedy against A.
 Acceptance may be Express or Implied

⚫When an acceptance is given by words spoken or

written through post or email. it is called express
acceptance.
Example: A offers to sell his I phone 12 to B,on 1lac,B
accepts the offer through spoken word, it is a kind of
express Acceptance.
⚫When Acceptance is given by conduct, it is called
implied acceptance.
A the passenger set in the taxi from G11 Markaz
telling the taxi driver to go to NUST university, is a
contract by its conduct.
 Example 2 of implied Acceptance

⚫ A passenger on board from Islamabad to Lahore via

Bus service, and gives ticket as service charges,
meaning thereby, that A is accepting the offer of the
Bus Company,impliedly by his conduct or act…..is
Implied Acceptance.
 Example No.3

⚫ A does all his grocery shoping in Metro Shopping

mall Rawalpindi….passes through check out and
pays his bill to the employee of the Metro shopping
mall…….?
⚫ What sort of mode of acceptance is in this
example…?
 Example No.4

⚫ Where a coolie takes the luggage at the railway

station without being asked by the passenger to do
so and if the passenger does not object to that ,than
he is bound to pay reasonably for the same as the
passenger accepted the offer by his conduct.
 Acceptance by Signing a document

⚫ Acceptance can be given by signing a document.

This is the most prevailing way of acceptance from
legal point of way. As signing a document of a
contract is a proof and evidence which can be
brought in the court of Law, whenever there is a
controversy between the parties.
 Acceptance must follow the offer

⚫ Acceptance must be given after receiving the offer.

Acceptance can not be given before the offer is given.
First offer will be given….and than acceptance of the
offer will be given.
⚫ Acceptance always follow the offer. it means that
without an offer an acceptance can not be made.
 Communication of an Acceptance when
complete…???

⚫ Section 4, of the contract Act 1872,explains the

communication of an acceptance is completed
⚫ The communication of an acceptance is complete in two
ways.
As against the offeror: when the letter of acceptance is
put in course of transmission to the offeror,(when the
letter of acceptance is put in the post box or given to the
postman officer) so as to be out of control of the Offeror/
acceptor.
As against the Acceptor: the Communication of an
acceptance is completed, when the letter of acceptance is
Delivered to the offeror.
 Example

⚫ A offers to sell his commercial Plaza to B,and B

accepts the offer, the letter of acceptance was posted
by B on 10th march 2021 for delivery to the offeror,
which reaches A on 13th March 2021.
⚫ Now the communication of acceptance is completed
against the offeror when it is posted on 10th march
2021,and the communication of acceptance is
completed against the acceptor on 13th march 2021
when the letter is received on 13th march 2021 by the
offeror and it comes into the knowledge of the
offeror.
 REVOCATION/ TERMINATION/ CANCELLATION OF
ACCEPTANCE

⚫Acceptance is generally revocable. An acceptor may

cancel his acceptance by speedier mode of
communication, which will reach earlier to the
offeror than the first letter of acceptance and not
afterward.
For example:
A offers his toyota vitz 2012 car to B for PKR 18 lacs.
B sends his letter of Acceptance by post on 10th
march 2021,on the same day B also phone call to A
to revoke his first letter of acceptance which is on
the way by post.
 Example No.2

⚫ A offers to B for selling his laptop by an offer letter,

B accepts the offer and send his acceptance letter by
post's may revoke his acceptance at any time by
email,phone,or any speedier mode, before the letter
of first acceptance reaches A, But if the letter of first
acceptance has reached A first in time, the
revocation of acceptance by any speedier mode is
ineffective.
 Modes of Revocations of ACCEPTANCE

⚫ By Notice of Revocation.
⚫ An Acceptance can be revoked by sending a notice of
revocation provided the notice must reach before
the letter of acceptance.
⚫ Notice could be through whatsapp
⚫ Through email
⚫ Through phone
⚫ Through fax machine
 Revocation when parties are face to face

⚫ Usually when both the parties offerer and offeree are

face to face ,one party give offer and the other party
accept the offer ..the contract is complete. And than
it is not possible to revoke the contract, only and
only contract in this situation may be revoke with
the mutual consent of the parties.
 BY LAPSE OF TIME

⚫ When the letter of acceptance is made after the

expiry of time open to accept the offer ….the
acceptance will stand revoke.
 EXAMPLE

⚫ The gerneral offer of 20% discount is open on

perfumes in j. from 10 june to 10 july..2021
Now if anybody orders for this offer after 10th july
2021 this order will not be accepted and will stand
revoke
 DEATH OR INSANITY OF ACCEPTOR

⚫ If the Acceptor dies or becomes insane before the

acceptance of offer in such a case acceptance stands
revoked as offer itself is revoked.
⚫ But what if the offer is accepted and afterward the acceptor
is died or insane….can the contract be enforceable …? If
the contract is of personal nature and personal skill
required to perform, such as surgery to be performed by a
specific surgeon or specific lawyer to argue the case then
in that situation the contract is not enforceable on the
death and the acceptance will stand revoke. But if the
contract is not of personal nature the contract may be
enforceable against the legal representative of the parties
to the contract.
 Failure to accept the condition precedent to
acceptance

If the acceptor fails to accept the condition precedent

to acceptance. such acceptance stands revoked.
EXAMPLE:
A offers to sell leather jacket to B, on PKR 25000,B
accepts the offer on condition that the delivery
charges shall be paid by A.
A fails to fulfill the condition precedent and hence the
acceptance stand revoked by B.