When the person to whom the proposal is made signifies his assent thereto it is said to be “accepted” [cl. (b)]. Whether an “offer” has been “accepted” or not, is always a question of fact depending upon the circumstances of each case.
Thus in Harvey v. Facey (p) Harvey wrote to Facey: “will you sell whiteacre? wire lowest price,” to which Facey replied: “Lowest price $900” Harvey replied: “accepted; send title deeds”; to which Facey sent no reply. Held there was no contract because Harvey’s proposal “to sell” had never been “accepted” by Facey. In a recent Madras case A offered to B (who was an agent for C) to purchase C’s Bungalow for Rs 6000.
In reply to B’s cable C replied “won’t accept less than Rs 10000.” A accepted the price of Rs. 10,000. C however sold the bungalow to another for a higher price. Held, by the Supreme Court, that a mere statement of the lowest price at which the vendor would sell contains no implied contract to sell at that price to the person making the inquiry. Hence C’s cable couldn’t be treated as a counter offer capable of resulting in a concluded contract on A’s acceptance and that therefore A’s suit for specific performance failed.
Acceptance depends upon the intention of parties. An insurance company “accepting” the terms of a “proposal” do not thereby enter into and agreement of insurance. Insurance is only affected when a properly stamped policy is issued by the company in return of the premium paid by assured. Acceptance can either be (i) express, i.e. verbal or written or (ii) implied by conduct, e.g. taking a seat in a tram car is an “acceptance” of the company’s “proposal” to run trams one day payment of the scheduled fares. The essential of a valid acceptance are defined by section 9.