Acceptance under Sections 7 and 8 of the Indian Contract Act, 1872: Absolute and Unqualified Acceptance, the Prescribed Mode, Acceptance Within a Reasonable Time, and Acceptance by Conduct or Performance

Sections 7 and 8 govern the quality and the manner of an acceptance. Section 7 has two limbs which are often run together and should not be: the first requires the acceptance to correspond exactly to the proposal, and the second requires it to be expressed in a particular way. The consequences of failing the two limbs are entirely different. A failure of the first destroys the offer; a failure of the second is curable by the proposer's silence. Section 8 then supplies a route by which acceptance may be made without words at all. This topic concentrates on manner, mode and timing; the boundary between acceptance and counter offer is treated in its own topic.

1. The Provisions

2. The First Limb: Absolute and Unqualified

The first limb is the mirror image rule. The acceptance must correspond to the proposal exactly, and a reply that varies or adds to the terms is not an acceptance but a counter offer which destroys the original proposal. The requirement is not a formality: Section 2(e) requires the promises to form the consideration for each other, and they cannot do so if the parties have assented to different things.

Three cases mark the boundary. A reply that refers to an obligation already contained in the proposal leaves the acceptance absolute, as the Supreme Court held in Jawahar Lal Burman v. Union of India, (1962) 3 SCR 769. A reply that accepts subject to confirmation by another authority is not absolute, as held in Haridwar Singh v. Bagun Sumbrui, AIR 1972 SC 1242. And a reply that asks whether different terms would be considered is a mere inquiry and leaves the offer standing. These are worked through in the dedicated topic on acceptance and counter offer.

3. The Second Limb: The Manner of Acceptance

3.1 Where no manner is prescribed

Where the proposal says nothing about how it is to be accepted, the acceptance must be expressed in some usual and reasonable manner. What is usual is judged by the medium of the offer, the practice of the trade and any course of dealing between the parties. An offer made by email may ordinarily be accepted by email; an offer made by letter may be accepted by letter or by some quicker means. The standard is not rigid, and an acceptance conveyed by a means at least as expeditious as the one used for the offer will almost always satisfy it.

3.2 Where a manner is prescribed

A proposer is entitled to prescribe how his offer is to be accepted, and the prescription may relate to the medium, the form, the person to whom the acceptance is to be given, or the place at which it is to be received. Where the prescription is clear and the offeree ignores it entirely, no contract results.

3.3 The proviso: departure is curable by silence

Indian law is materially more forgiving than a strict prescription rule, because the proviso to Section 7 gives the proposer a choice rather than declaring the acceptance void. On receiving an acceptance made otherwise than in the prescribed manner, the proposer may within a reasonable time insist on the prescribed manner; if he does not, he accepts the acceptance. The mechanism has four features worth setting out.

1. The burden shifts to the proposer. He must act, and act promptly, if he wishes to rely on his own prescription. Inaction is not neutral; it validates the departure.
2. The objection must be made within a reasonable time after the acceptance is communicated to him, which is a question of fact turning on the urgency of the transaction.
3. The contract, once the departure is cured, dates from the original acceptance, since the proviso says the proposer accepts the acceptance, not that a new contract is made.
4. A prescription that goes to the substance is different. Where the stipulation is not merely about the route of the acceptance but is a condition on which the offer is made at all, such as a requirement that acceptance be accompanied by a deposit, its non-fulfilment engages Section 6(3) and the proposal is revoked rather than accepted imperfectly.

3.4 Who may communicate the acceptance

4. Acceptance Within a Reasonable Time

Section 7 says nothing about when an acceptance must be given, and the limit comes from the other direction. Section 6(2) revokes a proposal by the lapse of the time prescribed for its acceptance, or, where none is prescribed, by the lapse of a reasonable time without communication of the acceptance. An acceptance communicated after that point is not a late acceptance; it is a fresh proposal, because there is no longer any offer in existence.

Two practical points follow. The period runs until the acceptance is communicated, so whether the acceptance was in time is answered by applying Section 4, and in a postal exchange the relevant moment as against the proposer is despatch. And what is reasonable is a question of fact, shorter where the subject matter fluctuates in value or is perishable and longer for land and similar assets, as the reasoning in Ramsgate Victoria Hotel Co. v. Montefiore, (1866) LR 1 Ex 109 illustrates.

5. Acceptance by Conduct and by Performance

5.1 The two routes

Assent may be signified without words by two distinct routes, and they should not be confused.

• Acceptance by conduct rests on Section 9 read with Section 3. A promise made otherwise than in words is implied, and communication may be made by any act which has the effect of communicating. Here the conduct is the vehicle of communication: the offeror learns of the assent from what the offeree does. Acting on a draft agreement, or ordering and supplying goods on its terms, is acceptance of this kind.
• Acceptance by performance rests on Section 8. Here the proposal itself asked for an act rather than a promise, and the act is the acceptance. Prior notification is dispensed with by implication, because the offeror framed his proposal so as to invite performance. Reward offers and general offers to the public are of this kind.

5.2 The second limb of Section 8

The concluding words of Section 8 are often overlooked. The acceptance of any consideration for a reciprocal promise which may be offered with a proposal is itself an acceptance of the proposal. The provision covers the proposer who sends the consideration along with his offer: an advance payment, earnest money, or the first instalment of a price. A person who receives and retains what was sent has accepted by that act, and cannot afterwards say that he never signified assent.

5.3 The limits

1. Performance in ignorance of the proposal is not acceptance, because Section 2(b) requires the offeree to signify assent and one cannot assent to what one does not know.
2. Performance of an act one is already legally bound to do is not consideration, so even a person with knowledge cannot claim on the proposal if the act was one he owed anyway.
3. Silence is not conduct. Section 8 requires an outward act. A proposer cannot stipulate that inaction will be treated as acceptance.
4. Mental acceptance is insufficient, and an acceptance written but not despatched is in the same position, because nothing has been put in a course of transmission.

6. The Requirements Compared

7. The Position Stated Shortly

1. Section 7 has two limbs: correspondence with the proposal, and the manner in which the acceptance is expressed.
2. A failure of the first limb produces a counter offer which destroys the proposal; a failure of the second is curable.
3. Where no manner is prescribed, any usual and reasonable manner suffices, judged by the medium of the offer and the practice of the trade.
4. A proposer may prescribe the manner, medium, place and recipient of the acceptance, per Eliason v. Henshaw.
5. Under the proviso to Section 7 a departure from the prescribed manner is cured unless the proposer objects within a reasonable time, in which case he accepts the acceptance.
6. Powell v. Lee: the acceptance must be communicated by the acceptor or his authorised agent.
7. Time is supplied by Section 6(2), not Section 7; an acceptance after lapse is a fresh proposal.
8. Acceptance by conduct rests on Sections 9 and 3; acceptance by performance rests on Section 8, which also covers the acceptance of consideration sent with a proposal.
9. Performance in ignorance of the proposal, performance of an existing duty, silence and mental acceptance are all insufficient.

8. Related Topics and Provisions