CMA Foundation · Fundamentals of Business Laws and Business Communication · Essential Elements of a Contract, Offer and Acceptance
Nair Textiles proposes to Gupta & Co. that acceptance must be sent only by registered post. Gupta & Co. instead sends its acceptance by ordinary email, which Nair Textiles receives. Nair Textiles says nothing for several weeks. Under the Indian Contract Act, 1872, what is the position?
Nair Textiles is taken to have accepted the acceptance. When a proposal prescribes a manner and acceptance is made differently, the proposer must insist on the prescribed manner within a reasonable time after receiving it. Silence for weeks means he failed to insist, so the contract stands.
- ANair Textiles, by failing to insist within a reasonable time, is taken to have accepted the acceptanceCorrect
- BThe acceptance is void because the prescribed manner was not followed
- CThe acceptance is valid only if Gupta & Co. also sends a registered letter later
- DNair Textiles can insist on the prescribed manner at any time, even after months
Explanation
Where a proposal prescribes the manner of acceptance and acceptance is made differently, the proposer may within a reasonable time after the acceptance is communicated insist on the prescribed manner. If the proposer fails to do so, he accepts the acceptance. Nair Textiles stayed silent for weeks, so a contract results. Calling the acceptance void is wrong, since the proposer's right to insist is time-limited.
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