Section 8 of indian contract act
Section 8 – Acceptance by performing conditions, or receiving consideration. Performance of the conditions of proposal, for the acceptance of any consideration for a reciprocal promise which may be offered with a proposal, is an acceptance of the proposal.
An implied acceptance is one that is not directly stated but is demonstrated by any acts indicating a person's assent to the proposed bargain. An implied acceptance occurs when a shopper selects an item in a supermarket and pays the cashier for it. In this case while purchasing a product from the buyer, the shopper need not to show separately that he or she want to accept the product and buy it for the proposed price. The shopper's conduct indicates that he or she has agreed to the supermarket owner's offer to sell the item for the price stated on it. If the buyer again asks for a separate price (bargain) other than the price given by the shopper then that will lead to interference of the acceptance.
Case law –
Carlill v. Carbolic Smoke Ball Co., (1893) 1 QBD 256 – The defendant company advertised that they would pay pound 1,000 to any person who used their carbolic smoke ball for a certain time any yet contracted influenza. The plaintiff purchased the medicine, used it for the stated time but contracted the disease. It was held that the contract was accepted by being acted upon, that the defendant had not stipulated for any communication of acceptance and therefore the plaintiff was entitled to recover the amount. It was held that when the offeror, while making the offer, expressly or impliedly, indicated that there is no need of intimating the acceptance and only performance of the conditions of offer would be enough, acting upon the stated conditions would result in a contract. Bowen L.J. stated:
“One cannot doubt that, as an ordinary rule of law, an acceptance of an offer ought to be notified to the person who makes the offer in order that the two minds may come together. Unless this is done the two minds may be apart, and there is not that consensus which is necessary according to the rules of English Law... to make a contract. But there is this clear gloss to be made upon that doctrine, that as notification of acceptance is required for the benefit of the person who makes the offer, the person who makes the offer may dispense with notice to himself if he thinks it desirable to do so, and I suppose there can be no doubt that where a person in an offer made by him to another person, expressly or impliedly intimates a particular method of acceptance as sufficient to make the bargain binding, it is only necessary for the other person to whom such offer is made to follow the indicated mode of acceptance; and if the person making the offer, expressly or impliedly intimates in his offer that it will be sufficient to act on the proposal without communicating acceptance of it to himself, performance of the condition is sufficient acceptance without notification.”
M/s. Rakesh Kumar Dinesh Kumar v. U.G. Hotels & Resorts Ltd. – There was contract for supply of goods by plaintiffs to defendant. Default was made by defendant in making payment. Defendant had made an offer in writing to pay certain amount in full and final settlement of dues. It was shown by the conduct of the parties that plaintiff had impliedly accepted offer and received part of amount. The receipt of the amount by the plaintiff, it was held, amounted to an acceptance of the offer.
L.I.C. of India v. R. Vasireddy – The question arising before the Supreme Court was, whether receipt and retention of the insurance premium and the delay in replying to the proposal could be treated as the acceptance thereof. In this case the deceased filed a proposal of insurance on his life for Rs. 50,000 on 27.12.1960. He issued two cheques for Rs. 300 and 220 respectively, which were got encashed by the L.I.C. by 11.1.1961. the deceased died the next day i.e., on 12.1.1961. In an action by the widow of the deceased to claim the amount, the L.I.C. contended that the contract of insurance had yet to be completed. It was averred that since the proposal had yet to be accepted by the Division Manager, according to the prescribed procedure in such cases, the amount of the two cheques had been kept only in deposit in the suspense account and had not been credited towards the premium account, and therefore, the L.I.C. was not bound to pay the insured amount Rs. 50,000. The contention of the L.I.C. was accepted by the Supreme Court and since the contract had not yet been concluded, the L.I.C. was not liable to pay the sum claimed. It was observed: “Though in certain human relationship silence to a proposal might convey acceptance but in the case of insurance proposal, silence does not mean or denote consent and no binding contract arises until the person to whom an offer is made says or does something to signify his acceptance. Mere delay in giving and answer cannot be construed as an acceptance as prima facie, acceptance must be communicated to the offeror.”
Bhagvathi Prasad Kumar v. Union of India 2006 (5) SCC 311 - Apex Court has held Section 8 of the Indian Contract Act provides for acceptance by performing conditions of a proposal. In the instant case, the Railway made an offer to the appellant laying down the conditions that if the offer was not acceptable the cheque should be returned forth with, failing which it would be deemed that the appellant accepted the offer in full and final satisfaction of its claim. This was further clarified by providing that the retention of the cheque and/or encashment there of will automatically amount to satisfaction in full and final settlement of the claim. Thus if the appellant accepted the cheques and encashed them without anything more, it would amount to an acceptance of the offer made in the letters of the Railways dated 7.4.1993. the offer prescribed the mode of acceptance, and by conduct the appellant must be held to have accepted the offer and therefore, could not make a claim letter. In the light of the above legal position whether the contention of the complaint seeking the further compensation tenable or not in the present set of the facts of the case is to be looked into.