What is a valid acceptance under contract law?

Last time, we talked about valid offers. Let’s find out what is a valid acceptance.

Abu offered his Lexus for RM80000. You agreed and paid him the money, in cash.

Is this a valid acceptance?

YES it is. Why is that so? There are four reasons why it is so..

Four points of valid acceptance

A valid acceptance must be:

1. absolute and unconditional (You gave Abu RM80000)

What if... you said you'll buy it for RM75000? That's not unconditional acceptance. That’s called a counter-offer and it destroys his original offer (Hyde v Wrench [1840])

2. said to the person making the offer (You said yes to Abu)

Section 2(b) Contracts Act 1950: when someone who received the offer communicates his agreement, this offer is considered accepted.

3. made in a reasonable time limit (You accepted the offer immediately when meeting Abu)

Section 6(b) Contracts Act 1950: if acceptance is not made within the offeror's specified time frame or within a reasonable time, the offer is deemed to have been revoked once the time has lapsed.

What if... you didn’t respond immediately? He asked you to think about it and get back to him soon. Two days later you accepted his offer. That would be a valid acceptance.

What if... it's twenty weeks weeks later? That’s an unreasonable lapse of time and the offer is revoked automatically.

4. accepted according to instructions or in any other reasonable way (You paid cash to Abu)

Section 7(b) Contracts Act 1950: acceptance must follow the offeror's stated method of acceptance. If he does not specify any method, the person receiving the offer must accept using a reasonable method.

If Abu asked for cash when selling the Lexus, you must pay him cash.

If he didn't mention on how you should pay, you can also use cheque or bank transfer.

Final thoughts

Just remember these four points and you won't go wrong when accepting an offer.

Enjoy driving around in your new Lexus!

Pic credits: wikimedia.org