Communication must be made by the offeree or his authorized agent(only offeree can accept the offer
Section 2(h) of the Indian Contract Act, 1872 defines the term ‘Contract’. A contract is an agreement enforceable by law. A simple definition of a contract can be ‘a legally binding agreement between two parties’. Earlier, the Contract Act 1950 was governing the contractual transactions in Malaysia. If there were some cases which the law of contract was unable to deal, the English law can be applied there. There are lots of contract being offered, accepted or even rejected daily around the world. All these contracts are either made orally or in the written form. As the examples for oral contract such as buying coffee at a shop, buying a mobile phone from a shop. Whereas contracts in written form such as buying a house or a contract of buying a car or bike. There essential elements of a valid contract are offer, acceptance, consideration, intention to create legal relations and capacity. The below mentioned things also apply to the agent or any person appointed by the offeree in his place. the agent can also perform the above functions that are required to complete the process of communication between the offeror and offerre, only if he has been authorised by the offeree. According to Section 182 of the Indian Contract Act,1870, an agent as a person employed to do any act for another, or to represent another in dealings with the third person. Any person can be an agent unless: a) he is not a minor, b) he is not of unsound mind. An agent has the authority. The offeree would be liable for any decisions taken by the agent on his behalf except for cases when the person is not doing the duty of the agent. Thus, the decisions or actions taken by the agent would not bound the offeree to vicarious liability. Thus, in this article, both the agent and the offeree will be addressed as the one and same person. Offer The offer is the first and foremost part of a contract. The person who makes the offer is called the offeror, and the person to whom the offer is made is called the offeree. An Offer is a proposal offered by the offeror to the offeree. In section 2(a) of the Indian Contract Act, 1870, when one person signifie his willingness to another to do or to abstain from doing anything, with a view to obtaining the assent of that other to the act or its abstinence, he is said to make a proposal. Thus, a proposal or offer is something, which can be converted into an agreement by its acceptance. Acceptance
According to Section 4(1) of the Contract Act 1950, the communication of a proposal is complete only when it comes to the knowledge of the person to whom it is made (offeree). Communication of acceptance is complete only when it is communicated to the offeror.
As the topic we are discussing, acceptance must be communicated to the proposer in order to form a valid contract. There are several rules which deal with the communication of acceptance. Besides, the offeree is the person to whom the offer is made can only accept an offer. Furthermore, an offeree is not liable for any thing if another person accepts the offer on his behalf without the offeree’s approval. Moreover, if the offer specifies a manner of acceptance such as by post or fax, then it must be accepted by using a manner that is not as less effective as the manner specified but it is an exception to the postal rule. Also silence is not considered as an acceptance. However, there is an exception for postal rule. In the case of Felthouse v Bindley, A makes an offer to sell his house to B but B did not communicate to A to buy his house. Finally, B bought the house under pressure. Thus, it was held that silence cannot be implied as acceptance. In section 2(b) of Contract Act, when the person to whom the proposal is made signifies his assent thereto, the proposal is said to be accepted: a proposal, when accepted, becomes a promise. According to section 2(c) of the Indian Contract Act, 1870, the person who making proposal is called the promisor and the person accepting the proposal is called the promise. The ‘promisor’ is also known as a ‘proposer’ or an ‘offeror’. A ‘promisee’ is also referred to as an ‘acceptor’ or ‘offeree’. An acceptance must be differentiated with a counter offer. If the offeror refuses the offer or changes the terms of the offer, the offer has been broken and the offer cannot be accepted at a future time. In the case of Hyde v Wrench, the defendant offered to sell the estate to the plaintiff at a certain price. However, the plaintiff made an offer to buy it at a lower price. This offer was refused. So, the plaintiff told the defendant that he will accept the initial offer, but the defendant refused so the plaintiff filed a case against him. It was held that no contract was made as the initial offer did not exist at the time the plaintiff wanted to accept. Therefore, the offer was terminated by the counter offer. There are a few conditions of acceptance. Firstly, the acceptance must be absolute and unqualified. In section 7(1) of the Indian Contract Act, 1870, in order to convert a proposal into a promise, the acceptance must be absolute and unqualified. Secondly, the communication of proposal is very important part. Of course, an offer or a proposal needs to be communicated to the ‘offeree’. In section 4(1) of the Contract Act 1870, the communication of proposal is completed when it comes to the knowledge of the person to whom it is made. Similarly, the acceptance by the offeree needs to be communicated to the offeror. This is important because, the offeror can always revoke his or her offer before there is an acceptance, but not after. Thirdly, communication of acceptance is the last part of the offer and acceptance. In section 4(2) of the Indian Contract Act 1870, ‘the communication of acceptance is complete; as against the proposer, when it is put in a course of transmission to him, so as to be out of the power of acceptor; as against the acceptor, when it comes to the knowledge of the proposer…’ So, for the offeror, his offer is deemed to be accepted the moment the promise has been transmitted the acceptance to the offeree and there is no possibility for him to retract it, even before the offeror has received it or comes to know about it. However, for the promisee or acceptor, the acceptance is considered to be communication to the promisor only when the promisor has received it to come to know about it. An offeror cannot state in the offer that mere silence or no communication will deem to be acceptance. Acceptance, whether by the words or conduct, is not effective until it is actually communicated to the offeror by the offeree. The sole and main reason for this rule is to protect the offeror from finding himself in an inevitable position of being bound to a contract without knowing that his offer had been accepted. An exception to this general rule is acceptance sent by post. This is commonly known as the ‘postal rule’. The postal rule states that an acceptance by post takes effect only when the acceptance is posted and not when it is actually received. The effect of this rule is that the acceptance is valid before it is actually communicated to the promisor or offeror. This is true even in cases where the letter never reaches its destination. However, it is not applicable in certain cases where the acceptance is made by way of instantaneous communication, such as during a face- to-face or a telephonic conversation. It can only apply where it is specified that acceptance may be by way of post or where it is reasonable to post that the acceptance, such as where the offer itself was sent by post. However, if the terms of the offer exclude the postal rule, then it will not be applicable. Thus, it can be concluded that the acceptance must be communicated by the offeree or his agent to the offeror in order to free himself of the liability and also in order to complete the process of communication between the offeror and offeree. Even though there may be issues regarding the postal rule, there have been some suggestions, however, the answer should depend on particular set of facts and whether it was possible for, in each case for the sender to be aware of the fact that the communication of acceptance had not been successful. Where it is possible for the receiver to prove non-communication, the burden is on the sender to re-transmit the message and the postal rule would not apply. On the other hand, where detection is not possible, then the postal rule would apply to make the acceptance effective upon transmission. This reasoning would apply as well to voicemail or email messages.