How are offer and acceptance defined under the Indian Contract Act?

Question

I sent a quotation to a vendor and they replied with changed terms. I want to know if a contract was actually formed between us. What I am unsure about is the procedure — where the application goes, what it costs, and how long offer and acceptance matters usually take. A plain explanation of the steps, in order, would help more than a general answer.

MyVakeel Legal Desk · Accepted Answer

The law that applies to offer and acceptance here is Indian Contract Act 1872, Section 2(a), Indian Contract Act 1872, Section 2(b) and Indian Contract Act 1872, Section 7. The detail below matters, because Indian Contract Act 1872, Section 2(a) draws the line differently depending on what your documents show.

Section 2(a) defines a proposal as a signification by one person to another of willingness to do or abstain from doing something, with a view to obtaining that person's assent.

Section 2(b) provides that when the person to whom a proposal is made signifies assent, the proposal becomes accepted and turns into a promise.

Section 7 requires acceptance to be absolute and unqualified and communicated in a prescribed or usual manner, so a conditional or modified reply is treated as a counter-offer, not acceptance.

A counter-offer extinguishes the original proposal, and the party that first proposed must independently accept the new terms for a contract to arise.

Communication of acceptance is complete against the proposer when it is put in transmission and against the acceptor when it comes to the proposer's knowledge, under Section 4.

In practice, in this order: 1) Compare the vendor's reply against your original offer to identify any variation in terms; 2) Treat a modified reply as a counter-offer requiring your fresh acceptance; 3) Confirm final agreed terms in writing before performance begins; 4) Retain all correspondence to prove the sequence of offer and acceptance if disputed.

Timing matters here: Indian Contract Act 1872, Section 2(a) works on limitation periods, so a offer and acceptance claim that is right on the merits can still fail if it is brought late. You can post the details on the MyVakeel forum for a practising advocate to review, or book a paid consultation with a Bar Council verified lawyer in corporate law.