Prepared by;

Alizah Ali
Department of Law
UITM Bandaraya Larkin
Element no 2: ACCEPTANCE
1. Definition Of Acceptance
2. Conditions of Acceptance
3. Modes of Acceptance
4. Exception of Communication of
Acceptance
1. Definition of Acceptance

Sect 2(b) of Contract Act 1950

 “when the person to whom the
proposal is made signifies his
assent thereto, the proposal is
said to be ACCEPTED. A
proposal when accepted become a
PROMISE”
1. Definition of Acceptance

Sect 2(b) of Contract Act 1950

ACCEPTANCE

If the offeree agrees/accepts

The offer

Made by the offerror

2. Conditions of Acceptance
CONDITION OF
ACCEPTANCE

1. MUST BE
2. MUST BE COMMUNICATED
ABSOLUTE
IN USUAL &
& UNQUALIFIED REASONABLE MANNER
Sect 7(a) CA 1950 Sect 7(b) CA 1950
2. Conditions of Acceptance
 1. MUST BE ABSOLUTE & UNQUALIFIED
Sect 7(a) CA 1950
“…the acceptance must be absolute and
unqualified..”
 without any condition
 without any modification
 must be the exactly on the same
term of the offer
…
… Counter offer
1. MUST BE ABSOLUTE & UNQUALIFIED–
ACCEPTANCE VS COUNTER OFFER
Counter offer = rejection of the original offer
= not valid as acceptance
 HYDE vs WRENCH
£ 1000
£ 950

If the OferrOR agrees with the

EXCEPTION  counter offer

 ORIGINAL terms will become VOID

 NEW CONTRACTUAL terms will be applied
1. MUST BE ABSOLUTE & UNQUALIFIED
ACCEPTANCE VS REQUEST 4 FURTHER
INFORMATION

Counter offer ≠ Request for further

information
• Rejection of the original offer
• Not acceptance
• The original offer is still open

STEVENSON JAQUES vs McLEAN

 1 tan = 40s
2. Conditions of Acceptance
 2. MUST BE COMMUNICATED IN USUAL &
REASONABLE MANNER
Sect 7(b) CA 1950
“…the acceptance must… be expresses in
some usual and reasonable manner,
unless the proposal presribes the
manner in which it is to be accepted”
 2. MUST BE COMMUNICATED IN USUAL &

REASONABLE MANNER..Sect 7(b)

1) Use any method
not cause delay
offerOR can understand that the
offerEE is making an acceptance

2) If the offerOR prescribes mode of

acceptance  the offerEE must follow the
said mode
if not follow offerOR may reject the
acceptance.
2. MUST BE COMMUNICATED IN USUAL &

REASONABLE MANNER..Sect 7(b)

 Case; Eliason vs Henshaw

harper’s ferry by wagon

2. MUST BE COMMUNICATED IN USUAL &

REASONABLE MANNER..Sect 7(b)

3) If the offerEE not follow the mode
prescribed  the offerOR may
INSIST the offerEE.. But if the
offerOR not insist, it is considered
that he accept the acceptance
Case; Wettern Electric vs Welsh Dev Agency
3. Mode of Acceptance
Topic covered …
3.1 Acceptance must be communicated
3.2 Silence is not an acceptance
3.3 Exception to communication of
acceptance
3. Mode of Acceptance
3.1 Acceptance must be communicated

 Sect 2(b) of CA 1950 ..

…“signifies his assent”
= offerOR knows that his offer has been
accepted by the offerEE
 Sect 3 of CA 1950 ..
…“must do something”...
 3. Mode of Acceptance
3.1 Acceptance must be communicated

 Communication – manifested from

intention
 Mere intention is not an acceptance
√ + X = X
intention communication acceptance
 case; Powell vs Lee

headmaster
3. Mode of Acceptance
3.2 Silence is NOT an acceptance

 offerOR cannot put a condition

in his offer that the silence of the
offerEE without giving any positive
conduct amounted to an acceptance.
3. Mode of Acceptance
3.2 Silence is NOT an acceptance
 Case; Fraser vs Everett
there was no rule of law saying that “silence
gives consent” applicable to mercantile
contract
 Case; Felthouse vs Bindley
“if I hear no more about him, I shall consider
the horse is mine”
3. Mode of Acceptance
3.3 Exception to communication of acceptance

GR:
Acceptance
Acceptance
need NOT be
must be EXCEPTION communicated
communicated

The situation are…

1. When the offerOR dispense with/waive the
need of communication (unilateral contract)
2. General offer
3. Reciprocal promises
4. Acceptance through Postal Rule
3. Mode of Acceptance
3.3 Exception to communication of acceptance

1. When the offerOR dispense with/waive the

need of communication (unilateral
contract)
CONDITION  offerOR prescribes the
specific mode of
acceptance
 offerEE follow the
prescribed mode of
acceptance
3. Mode of Acceptance
3.3 Exception to communication of acceptance

case; Carlill vs Carbolic Smoke Ball Co

CONDITION  bought the medicine
from the company
 take the medicine as
prescribed
 still suffer influenza
Case ; Erington vs Erington
3. Mode of Acceptance
3.3 Exception to communication of acceptance

2. General offer
- The offer is made to the public at
large
- Performance of the condition of the
offer is sufficient to constituted an
acceptance
- Case; Carlill vs Carbolic Smoke Ball Co
3. Mode of Acceptance
3.3 Exception to communication of acceptance

3. Reciprocal promises
= system barter
 Sect 2(f) of CA 1950 – definition of reciprocal promise
“promises which form the consideration…for
each other are called reciprocal promises”

 Sect 8 of CA 1950 – exception to communication

“…the acceptance of any consideration for a
reciprocal promise…is an acceptance of the
proposal”
3. Mode of Acceptance
3.3 Exception to communication of acceptance

4. Acceptance through Postal Rule

When the offerEE has to respond the
acceptance via letter, there is no need an oral
communication of acceptance

Q : when the communication of acceptance is

complete against the offerOR

When the offerEE put the letter of

acceptance into the post box
3. Mode of Acceptance
3.3 Exception to communication of acceptance

Sect 4(2)(a) of CA 1950

“the communication of an acceptance
is complete as against the
proposer when it is put in a
course of transmission to him..”

The offerOR is bound to

EFFECT the contract irrespective of any
delay of disappearance of the
letter of acceptance
3. Mode of Acceptance
3.3 Exception to communication of acceptance
Sect 4(2)(a)
complete
against the
offerOR ;when
offerEE put the
letter into post
box
Effect: offerOR
offerEE offerOR is bound with
the contract

Once the offerEE posts the letter of acceptance, the

OfferOR is bound to perform his promise
3. Mode of Acceptance
3.3 Exception to communication of acceptance

 Case; Ignatius vs Bell

surat Condition : before
20/12
Posted : 16/12
Arrived: 25/12

Whether the
acceptance is valid or
not ??
3. Mode of Acceptance
3.3 Exception to communication of acceptance

Case; Householf Fire Insurance Co Ltd vs Grant

- Df offer share to Plf

- Plf’s  s/u  dissappearance
- Plf claimed divident
- Df defence: there was no contract between
them
Whether the
acceptance is valid
or not ??
3. Mode of Acceptance
3.3 Exception to communication of acceptance

Sect 4(2)(b) of CA 1950

“the communication of an acceptance
is complete as against the
acceptor when it is come to the
knowledge of the offerOR”

The offerEE is ONLY bound

EFFECT to the contract when the
offerOR receive the letter of
acceptance
 3. Mode of Acceptance
3.3 Exception to communication of acceptance

 Sect 4(2)(b)
complete
against the
offerEE ;when
offerOR
received the
letter of
acceptance
 Effect: offerEE
is bound with offerEE offerOR
the contract

Once the oferrOR receives the letter of

acceptance, the OfferEE is bound to
perform his acceptance
3. Mode of Acceptance
3.3 Exception to communication of acceptance

Disadvantages

offerOR is already bound with the contract

once the offerEE post the letter. He will be
bound eventhough the letter is delay or
disappear. On the other hands, the offerEE
is not yet bound to the contract and will
only bound once the offerOR receive the
letter of acceptance
3. Mode of Acceptance
3.3 Exception to communication of acceptance

Solution

offerOR is allowed to add a new term that can protect

himself – as to the actual time when the offerOR would
be bound to the contract

Case; Holwell Securities Ltd vs Hughes

offerOR only will bound to the contract
when he read the said letter of
acceptance