law 200 assignment.docx

7/27/2019 Law 200 assignment.docx

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Acceptance must be absolute and must correspondwith the chance of offer.Matching acceptance rule is a common law principle of contract law that for a contract to be

formed, the terms of an acceptance must correspond exactly with those of the offer.

Acceptance of a contractual offer must be positive, unconditional, unequivocal, and

unambiguous, and must not change, add to, or qualify the terms of the offer. This is also

known as the mirror image rule or ribbon matching rule. Acceptance refers to a manifestation

of willingness to be bound by the terms of an offer made in a manner invited or required by

the offer. An acceptance of an offer must be absolute and unconditional. In order for the

acceptance to be effective all of the terms of the offer must be accepted without change or

condition.

Acceptance results in the formation of a contract: both parties are bound and neither can

withdraw from the bargain without incurring liability to the other. Ordinarily, acceptance

must be expressed or communicated by the offeree to the offeror, in order to manifest mutual

assent. The manner in which acceptance is to be communicated may be specified in the offer,

in which case that becomes the exclusive means of acceptance. But if the offer prescribes no

means any reasonable and usual mode may be adopted. In some cases merely acting in

justifiable reliance on an offer may serve as sufficient reason for making a promise binding.

(Drennan v. Star Paving Co.)

An acceptance in order to be binding must be absolute and unconditional. The acceptance

must be to all term of offer, whether material or immaterial to the contract. If the parties are

not consensus-ad-idem to all the terms and conditions of the contract, there is no contract. It

is another important essential element of a valid acceptance. A valid contract arises only if

the acceptance is absolute and unconditional. It means that the acceptance should be in total

and without any condition. Thus, an acceptance with a variation is no acceptance. It is simply

a counter offer. A counter offer puts an end to the original offer, and it cannot be revived by

subsequent acceptance. It often happens that a person intends to accept an offer and writes a

letter stating that he does accept it, but then adds some further remarks or some question

which may be relatively unimportant or trivial.


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Acceptance must be outright and unreserved. There should not be any adjustment of the

terms of an offer to have a valid acceptance as stated above. If there is negotiating involved in

the acceptance, it is known as negotiation on price and quality of the goods and a contract

might be made sometime at the end of the negotiation, but at the beginning of negotiation no

contract is formed because introducing new terms in the offer in fact modifies the original

offer and rejects it and it is known as making counter offer by the offeree.

Moreover, a counter offer amounts to a rejection of the original offer, which then ceases to be

capable of acceptance. These rules are somewhat rigid and may well be too rigid but these

further remarks or questions may be held to qualify the purported acceptance to such a degree

that they prevent it having the legal character of an acceptance. The offeror may then be free

to withdraw at the last minute. If, however, he simply fails to reply to the additional remarks

raised by the offeree, but proceeds with the performance of the contract, it may be possible to

hold that the counter-offer has in turn been accepted by conduct. It follows, therefore, that a

conditional acceptance may fail to count as a real acceptance at all. A contracting party who

had made a mistake simply had himself to blame. Unless, of course, the mistake was actually

induced by something said or done by the other party, in which case there might be remedies

for fraud or misrepresentation or, perhaps, breach of a contractual term.

There must be a correlation in an acceptance with all the terms of the offer. Agreeing to take

200 tons of wheat is not an acceptance of an offer to sell 300. Agreeing to pay 35 is not an

acceptance of an offer to sell at 40. It is a counter offer, the effect of which is to terminate

the original offer. Care has to be taken here to avoid being overzealous in demanding

exactness'. (Tinn & Hoffman) An eligible and provisional acceptance amounts to a counter

offer which amounts to non-acceptance. Moreover, an offer must be accepted in full. If only a

part of the offer is accepted, the acceptance will not be valid. Even the slightest deviation

from the terms of the offer makes the acceptance. In effect a derivate acceptance is regarded

as a counter offer in law. E.g. L offered to M his scooter for Rs. 4000 M accepted the offer

and tendered Rs. 3900 cash down, promising to pay the balance of Rs. 100 by the evening.

There is no contract, so the acceptance was not absolute and unqualified.

Contract Act 1950 provides that in order for a proposal to be converted into a promise, the

Acceptance of that proposal must be absolute and unqualified. Absolute and unqualified


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acceptance means the terms of the offer has not been modified or changed by the offeree. If

the offeree bargains on the offer and modifies the terms of the offer, lets say he asks the

seller (offeror) to reduce the price of the goods which has been proposed to sell, then there

will be no acceptance. Because the buyer has modified the price (by asking the seller to

reduce the price) and thereby he has not accepted the offer, rather he has made a new offer to

buy the goods with reduced price which in fact rejects the original offer.

As stated earlier, acceptance must be absolute and unqualified so that there is complete

consensus between the offeror and the offeree. If the parties are still negotiating, an

agreement has not yet formed. In Lau Bother & Co. v. Chin Pacific Navigation Co. Ltd

(1965), negotiations for the delivery of logs were conducted through a series oftelegrams and

letters. Whilst the parties still were in the negotiating stage, the defendants withdrew the

offer. Whenthis matter was referred to the court, the court held that the parties were still in a

state of negotiation and noagreement was formed. Therefore, the defendants were justified in

withdrawing the offer.

If an acceptance is qualified by words such as subject to contract or subject to formal

contract being drawn up by our solicitors, the court would be inclined to hold in the absence

of strong evidence that there is no contract made. A conditional contract is not absolute and

unqualified contract. The intention to create legal relation is also absent here. In other words,

it is incomplete contract and it cannot be enforced by any party.

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References:

Calamari, John D., and Joseph M. Perillo. 1998. The Law of Contracts. 4th ed. St. Paul,

Minn.: West Group.

Chirelstein, Marvin A. 2001. Concepts and Case Analysis in the Law of Contracts. 4th ed.

New York: Foundation.

Collins, Hugh. 1999.Regulating Contracts. New York: Oxford Univ. Press.

DiMatteo, Larry A. 1998. Contract Theory: The Evolution of Contractual Intent. East

Lansing: Michigan State Univ. Press.

Hare, J. I. Clark. 2003. The Law of Contracts. Clark, N.J.: Lawbook Exchange.

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