Section 7(2) of the Indian Contract Act, 1872: Communication of Acceptance Must Be Through Prescribed Mode Introduction
Section 7(2) of the Indian Contract Act, 1872: Communication of Acceptance Must Be Through Prescribed Mode
Introduction
The Indian Contract Act, 1872 lays down the foundational principles of contract law in India. Among its provisions, Section 7(2) plays a pivotal role in determining how acceptance of an offer must be communicated. Contracts are formed based on the mutual consent of parties, and for consent to be valid, the offer and its acceptance must be clear, certain, and communicated in a manner acceptable to both parties. Section 7(2) deals with situations where the offeror specifies the mode or manner of acceptance, and how deviations from it affect the contract formation.
Text of Section 7(2)
Section 7(2) of the Indian Contract Act states:
“If the offeror prescribes a particular mode of acceptance, the acceptance must be made in that mode, and if not, the offeror may insist that his offer shall be accepted in the prescribed mode only. If the offeror fails to do so within a reasonable time, he is deemed to have accepted the acceptance.”
In simpler terms, when an offeror tells the offeree to accept in a particular way (e.g., through email or registered post), then the offeree must use that method. If the offeree uses another method, the offeror must object within a reasonable time. If not, the contract is considered valid.
Essential Elements of Section 7(2)
Prescribed Mode of Acceptance:
The offeror must clearly communicate the manner in which the acceptance should be conveyed—such as "accept via email only" or "send acceptance through registered post."Mandatory Compliance:
The offeree is expected to comply with this prescribed method. If they do not, the offeror has the right to reject the acceptance.Waiver Through Silence:
If the offeror does not object to the deviation within a reasonable time, they are deemed to have accepted the mode of acceptance. This avoids undue hardship to the offeree and encourages timely communication.
Illustration
Suppose Mr. A offers to sell his house to Mr. B and asks him to reply by email only. Mr. B, instead, sends a letter of acceptance by post. Mr. A receives it but remains silent and later claims no contract was formed. In this case, if Mr. A does not object within a reasonable time, he is considered to have accepted the alternative mode, and the contract becomes binding.
Judicial Interpretation
Eliason v. Henshaw (U.S. Case):
Although not an Indian case, this American case is often cited to explain this principle. The court held that acceptance must be made in the manner prescribed by the offeror, or it is invalid unless waived.Brogden v. Metropolitan Railway Co. (1877) LR 2 AC 666:
In this English case, the House of Lords held that even if formal acceptance is not made according to the specified mode, performance or continued dealing may imply valid acceptance.Bhagwandas Goverdhandas Kedia v. Girdharilal Parshottamdas (1966 AIR 543):
The Supreme Court of India observed that acceptance, to be effective, must be communicated and be consistent with the mode prescribed or accepted by the parties.
Purpose and Rationale
Section 7(2) ensures:
Clarity in Communication: Prevents misunderstandings by allowing the offeror to control how acceptance reaches them.
Certainty in Contract Formation: Reinforces the need for mutual agreement on essential terms, including communication.
Protection of Parties’ Intent: Balances both parties' expectations—while giving the offeror control, it also protects the offeree by requiring the offeror to object promptly to any deviation.
Practical Relevance Today
In the digital age, where contracts are often formed via email, apps, or online platforms, Section 7(2) is especially important. For example:
If an online seller requires a buyer to accept terms by clicking a checkbox, a reply via email may not suffice.
In B2B agreements, if one party asks for acceptance by a signed hard copy, and the other sends a scanned copy via email, the original mode matters unless the deviation is waived.
Conclusion
Section 7(2) of the Indian Contract Act, 1872 underscores the importance of following the prescribed mode of acceptance in contract law. It creates a legal obligation on the offeree to comply with the offeror’s instructions and ensures that both parties are on the same page regarding communication. However, it also introduces flexibility by allowing the offeror to waive strict compliance, thus promoting fairness in contractual dealings. In a world where communication channels are rapidly evolving, Section 7(2) remains a vital provision in maintaining contractual certainty and integrity.
Closing Credit
Author- Abhishek
"The views expressed are personal. This article is intended for educational purposes and public discourse. Feedback and constructive criticism are welcome!"
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