A proposal or offer is said to have been accepted when the person to whom the proposal is made signifies his assent to the proposal to do or not to do something [sec-2(b)].
Acceptance is an expression, by words or conduct, which clearly indicates that the person making it, agrees to be bound by the terms of offer. An acceptance is the manifestation by the offeree of his willingness to be bound by the terms of the offer.
Acceptance must be judged objectively, but can either be expressly stated or implied by the offeree’s conduct. To form a binding contract, acceptance should be relayed in a manner authorized, requested, or at least reasonably expected by the offeror.
Essential elements of valid acceptance(Rules):
1. Acceptance must be given by the party to whom the offer is made: Acceptance can be given by the oferee or his duly authorized agent.
2. Acceptance must be absolute and unqualified [sec-7(1)]: Acceptance is valid when it is absolute and unqualified and is expressed in some usual and reasonable manner, unless the proposal prescribed the manner in which it is to be accepted.
3. The acceptance must be expressed in some usual or reasonable manner[Sec-7(2)]: Where the mode of acceptance is prescribed in the proposal, it must be accepted in that manner.
Example: X applied for certain shares in a company in June but the allotment was made in November. X refused to accept the allotted shares. It was held that the offeror, X, could refuse to take shares as the offer stood withdrawn and could not be accepted because the reasonable period during which the offer could be accepted had elapsed.
4. Time: Acceptance must be given within the specified time limit, if any, and if no time is stipulated, acceptance must be given within the reasonable time and before the offer lapses.
5. Acceptance must be communicated to the offeror: It must further be remembered that an acceptance must be communicated to the person who made the offer. The offeree should do something to signify his assent i.e., to communicate his acceptance.
6. Acceptance must be given before the offer lapses or revoked: Acceptance can be given only to an existing offer. When an offer terminates, it cannot be accepted.
7. Acceptance subject to contract is no acceptance: If the acceptance has been given “subject to contract” or subject to approval by certain persons or by the use of similar words, it has no effect at all.
8. More silence is not acceptance: The acceptance of an offer cannot be implied from the silence of the offeree or his failure to answer, unless the offeree has in any previous conduct indicated that his silence is the evidence of acceptance.