Acceptance by Performing Conditions, and Implied Promises

1. The performance must be of the conditions of the proposal, that is, the act must be the act the offeror asked for. Something similar is not enough.
2. The performance must be with knowledge of the offer. A person who finds a lost dog and returns it, learning of the reward only afterwards, has not accepted anything: he did not act in response to a proposal. This follows from section 2(a)'s requirement that the proposal be made with a view to obtaining assent, and from the very idea of acceptance, which is assent to something known.

General offers: how section 8 works in practice

A general offer is a proposal made to the world at large on stated terms. It is not accepted by everyone who reads it; it is accepted by whoever performs.

Three features follow:

• The contract is made with one person, not with the world. The offer is to the world; the contract is with the performer.
• Communication of acceptance is dispensed with, because the offeror asked for an act and not for a reply.
• The offer may be revoked, but the revocation should be given the same publicity as the offer. Once someone has begun performance on the faith of the offer, revocation becomes problematic, and the fairer view is that the offeror cannot withdraw once performance has begun in reliance.

A continuing general offer may be accepted more than once. An advertisement promising a sum to anyone who uses a product as directed and still falls ill is accepted afresh by each person who does so, so long as the offer stands.

Express and implied promises: section 9

Section 9 divides promises by how they were made, not by how strong they are.

• Express: made in words, spoken or written. "I will pay you 500 rupees for this table."
• Implied: made otherwise than in words, that is, by conduct. Boarding a bus, taking a seat in a restaurant, handing goods to a shopkeeper at the till.

An implied promise is a real promise and is as binding as an express one. The Act's own scheme depends on it: a general offer accepted by performance under section 8 produces an implied promise under section 9.

Two cautions:

An implied promise is not the same as a quasi contract. In an implied contract there is a genuine agreement, inferred from conduct rather than words. In a quasi contract under sections 68 to 72 there is no agreement at all, and the law imposes the obligation. See [Quasi Contracts: Obligations Resembling Those Created by Contract].

An implied promise is not a term implied by a court into an existing contract. Section 9 is about how the promise was made; implying a term is about filling a gap in a promise already made.

A worked example

A pharmaceutical company advertises: "We will pay one lakh rupees to any person who contracts influenza after using our inhaler three times daily for two weeks as directed. We have deposited five lakh rupees with our bank to show our sincerity."

(a) Meena reads the advertisement, buys the inhaler, uses it as directed for a fortnight, and contracts influenza. The advertisement is a general offer, not an invitation to treat: it states terms with precision, it is intended to be acted on without further negotiation, and the deposit shows an intention to be bound. Meena's use of the inhaler as directed is performance of the conditions of the proposal, which is an acceptance under section 8. No communication was required. There is a contract and she may claim.

(b) The company says it never received any notice of acceptance from Meena. Section 8 answers this. Where a proposal invites performance, performance is the acceptance, and the offeror has by the form of his offer dispensed with separate communication.

(c) Ravi had already been using the inhaler for a month before the advertisement appeared, and continues. Performance must be referable to the proposal and made with knowledge of it. Conduct that began before the offer existed was not assent to it, and the fortnight's use relied on must be use in response to the offer.

(d) The company withdraws the advertisement after Meena has used the inhaler for ten days. The revocation should have the same publicity as the offer, and it is at best doubtful whether an offeror may revoke against a person who has begun performance in reliance on it. Meena has the stronger position.

What it does NOT mean

"Every advertisement is a general offer." Most are invitations to treat. An advertisement becomes an offer when it states terms capable of acceptance without further negotiation and shows an intention to be bound. See [Proposal: What an Offer Is, and What Only Looks Like One].

"Section 8 abolishes the need for communication generally." It does not. It applies where the proposal invites performance. In an ordinary bilateral negotiation the acceptance must still be communicated under sections 3 and 4.

"An implied contract is a weaker contract." It is not. Section 9 classifies by mode, not by force.

"A person who performs without knowing of the offer can claim." He cannot claim on the contract, because he did not accept anything. He may in a proper case have a claim under section 70, which is a different route with different requirements.

Quick revision

• Section 8: performance of the conditions of a proposal, or acceptance of consideration offered with it, is an acceptance.
• No separate communication is needed where the offer invites performance.
• Performance must be of the conditions asked for, and made with knowledge of the offer.
• General offer: made to the world, contract made with the performer, revocation should be given equal publicity.
• Section 9: in words means express, otherwise than in words means implied. An implied promise binds equally.
• Implied contract is not quasi contract: the first rests on real agreement inferred from conduct, the second on no agreement at all.

Test yourself

1. How is a general offer accepted? By performing the conditions of the proposal, which section 8 makes an acceptance without any separate communication.

2. A finds B's lost watch and returns it, learning only afterwards that B had advertised a reward. Can A claim it? Not on the contract. Acceptance requires assent to a known proposal, and A did not act in response to the offer. Any claim would have to be made elsewhere.

3. Distinguish an express promise from an implied promise. Section 9: a promise made in words is express; one made otherwise than in words, that is by conduct, is implied. Both are equally binding.

4. Is a contract with the world at large possible? The offer is to the world; the contract is with whoever performs the conditions. So the contract is with one identified person, and there is no absurdity.

5. What is the second limb of section 8? The acceptance of any consideration for a reciprocal promise offered along with a proposal is itself an acceptance of that proposal.