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CMA Foundation · Fundamentals of Business Laws and Business Communication · Essential Elements of a Contract, Offer and Acceptance

Mehra, a trader, performs a proposal's conditions by sending goods as the proposal required, without any separate message of acceptance. Which of the following best describes the legal position under the Act?

Performing the conditions of a proposal is itself acceptance under Section 8, so an agreement is formed by conduct. No separate written or spoken acceptance is needed, and no further time condition applies.

  1. ANo contract arises until Mehra sends a written acceptance
  2. BPerformance of the conditions of the proposal amounts to acceptance, so an agreement is formedCorrect
  3. CPerformance is only an invitation to treat
  4. DPerformance forms a contract only if the goods are accepted within a year

Explanation

Section 8 states that performance of the conditions of a proposal is an acceptance of it. So an agreement results from the conduct without separate words. The other options add requirements not found in the Act.

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