Acceptance Must Be Absolute and Unqualified

This is the single most examined proposition in the section. The classic illustration: A offers to sell a farm for 1,000 pounds; B replies offering 950; A refuses; B then purports to accept the original 1,000. There is no contract, because B's counter offer ended the original offer.

A mere enquiry is not a counter offer

There is an important qualification that students miss. Asking a question about the offer is not the same as varying it. "Would you consider delivery in two instalments?" is a request for information; "I accept, delivery to be in two instalments" is a counter offer. The test is whether the answer purports to alter the terms or merely to explore them.

A conditional acceptance is not an acceptance

"I accept subject to contract", "I accept subject to my solicitor's approval", or "I accept subject to a formal agreement being drawn up" leave something still to be agreed, so nothing is concluded. The parties remain in negotiation.

Contrast an acceptance that is complete in itself but records an intention to record the bargain formally later. That is a contract, and the later document is evidence of it. The distinction is one of construction, and the words "subject to" are the usual signal.

Acceptance must be of the whole proposal

A proposal cannot be accepted in part. If A offers 100 tonnes of wheat at a price and B says "I accept 50 tonnes", B has made a counter offer.

Broken down: limb two, the manner of acceptance

Limb two has three steps, and the third is the one that carries marks.

1. If the proposal prescribes no manner, the acceptance must be in a usual and reasonable manner. What is usual depends on the trade and on how the offer itself was made.
2. If the proposal prescribes a manner, acceptance ought to be in that manner.
3. If it is not, the proposal does not automatically fail. The proposer has a choice. He may, within a reasonable time after the acceptance is communicated to him, insist on the prescribed manner. If he does not, he is taken to accept the acceptance, and there is a contract.

So a deviation in the manner of acceptance produces not a nullity but an option, and the option is lost by silence. That is the opposite of the position under a counter offer, and the two are easy to confuse:

Silence is not acceptance

Section 7 requires the acceptance to be expressed, and section 3 requires an act or omission by which the party intends to communicate or which has the effect of communicating. It follows that an offeror cannot impose a contract by saying that silence will be taken as consent.

"If I hear nothing from you by Friday I shall assume you agree" imposes no duty on the offeree to reply, and his silence is not an acceptance. The rule protects people from being bound by inaction, and it is why unsolicited goods sent with a note saying that failure to return them will be treated as purchase create no contract.

There are two apparent exceptions worth stating precisely, because neither is really an exception to the rule:

• Where the offeree, by his conduct, does something that amounts to acceptance, that is acceptance by conduct under sections 8 and 9, not acceptance by silence.
• Where a previous course of dealing between the parties makes silence the understood mode of assent, the silence is being read as conduct in the light of the dealings, not as bare silence.

A worked example

Ramesh writes to Sunita: "I offer to sell you my flat for eighty lakh rupees. Reply by registered post by 30 September."

(a) Sunita replies by registered post on 20 September: "I accept, provided you also leave the air conditioners." This varies the terms. It is a counter offer under limb one, it destroys Ramesh's offer, and Sunita cannot afterwards accept the original.

(b) Sunita replies by registered post: "I accept. Would you be willing to leave the air conditioners?" The acceptance is absolute; the second sentence is an enquiry. There is a contract, and the question about the air conditioners is a separate request Ramesh may refuse.

(c) Sunita replies by email on 20 September, accepting in full. Ramesh reads it and says nothing until 5 October, when he says he required registered post. The manner was prescribed and not followed, so limb two applies. Ramesh could have insisted on registered post within a reasonable time after the acceptance was communicated. He did not, and a fortnight's silence after reading it is unlikely to be reasonable. He accepts the acceptance, and there is a contract.

(d) Ramesh's letter had said: "If I do not hear from you by 30 September, I shall treat the flat as sold to you." Sunita says nothing. There is no contract. Silence cannot be turned into acceptance by the offeror's own stipulation.

What it does NOT mean

"Any variation ends the negotiation for good." It ends the original offer. The counter offer is itself a live proposal, and the original offeror may accept it. Negotiation continues; what is gone is the power to accept the earlier terms.

"An acceptance in the wrong manner is void." It is not. Section 7(2) gives the proposer an option to insist on the prescribed manner, and silence within a reasonable time loses the option.

"Asking a question rejects the offer." It does not, provided the question does not purport to change the terms.

"An offeror can make silence into acceptance." He cannot, and the attempt is a standard fact pattern.

Quick revision

• Section 7: acceptance must be absolute and unqualified, and in a usual and reasonable manner unless a manner is prescribed.
• A counter offer is a new proposal and destroys the original offer.
• A mere enquiry is not a counter offer.
• Acceptance "subject to contract" or subject to approval is conditional and concludes nothing.
• A proposal must be accepted as a whole.
• Wrong manner: the proposer may insist within a reasonable time; if he does not, he accepts the acceptance.
• Silence is not acceptance, and the offeror cannot stipulate that it is.

Test yourself

1. State the two requirements in section 7. The acceptance must be absolute and unqualified, and it must be expressed in some usual and reasonable manner unless the proposal prescribes the manner.

2. B answers A's offer with different terms, A refuses, and B then accepts the original terms. Contract? No. B's reply was a counter offer, which destroyed A's original offer, so there was nothing left for B to accept.

3. The offer required acceptance by telegram; the offeree accepted by letter and the offeror said nothing for a month. What follows? Under section 7(2) the offeror could have insisted on the prescribed manner within a reasonable time. Having failed to do so, he accepts the acceptance and there is a contract.

4. Can an offeror provide that silence will amount to acceptance? No. Acceptance must be expressed, and the offeree is under no obligation to reply. Silence is not acceptance.

5. Distinguish a counter offer from a mere enquiry. A counter offer purports to alter the terms of the proposal and operates as a rejection of it. An enquiry seeks information or explores a variation without purporting to alter the terms, and leaves the offer alive.