Section 2(b) - "When the person to whom the proposal is made signifies his assent there to the proposal is said to be accepted. Proposal and acceptance both can be made by words or by conduct. Without the acceptance of a proposal no agreement comes into existence."
Example :- Suppose Mr. Shah offers to sell his hotel to Mr. Salman for Rs. 50 lac. Mr. Salman accepts the offer to purchase the hotel for Rs. 50 lac. This is acceptance.
The following are the different legal rules or essentials a valid acceptance:
1. It must be given by the Offeree:
An offer can be accepted only by the person to whom it is made. It cannot be accepted by an other person without the consent of offeror. If anyone attempted to accept it no contract with that person arises.
Example:A sold his business to B without disclosing the fact to his customers. J sent an order for the supply of goods to A by name. B received the order and executed the same. It was held that there was no contract between B and J because J never made any offer to B.
2. It must be Absolute &Unconditional:
In order to convert the offer into an agreement the acceptance must be absolute and unconditional. If the offeree imposes any condition in his acceptance it is not a valid acceptance but a counter offer.
Example:A offers to sell his watch to B for Rs.500 and B replies that he can buy it only for Rs.300 thee is a material variation in the acceptance. Therefore, there is no agreement as the acceptance is not absolute and unconditional.
3. It must be in a Prescribed Manner:
If the offeror in his offer has prescribed any particular manner of acceptance it must be given according to all that particular manner. If no particular manner is prescribed in the offer then acceptance should be made in a reasonable manner.
Example:A makes an offer to B and writes “if you accept the offer send your acceptance by telegram.” B sends his acceptance by registered post. It is not a valid acceptance. But a should inform B that it is rejected because it not in the prescribed manner.
4. It 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. Mere expression of intention to accept an offer is not a valid acceptance.
Example:A proposes by letter to purchase B’s house. B expresses his intention to sell it to A but does not send a reply to him. The house is sold to C despite B’s intention. A has no legal remedy against B.
5. It may be express or implied:
When an acceptance is given by words spoken or written, it is called express acceptance. When it is given by conduct, it is called implied acceptance. Sometimes the proposal instead of being made to a definite person is made to the public.
Example:A wrote a letter to B to sell his cycle for Rs.2,000. B accepted his offer and sent a letter of acceptance to A. It is an express acceptance.
6. The acceptance must be given before the lapse of offer:
A valid contract can arise only when the acceptance is given before the offer has elapsed or withdrawn. An acceptance which is made after the withdrawal of the offer is invalid, and does not create any legal relationship.