Business Ethics Assignment: Acceptance, An Element of Contract Act 1950

Question

Task: Prepare a report on business ethics assignment in appropriate format with references ranging between 1000-1200 words addressing the below points:

1. Choose any one of the elements of contract
2. Review the provisions regarding the element as per Contract Act 1950
3. Review any two case precedents relating to the element chosen

Answer

Introduction
The Contract Act 1950 considered in this business ethics assignment is modelled on the Indian Contract Act 1872 that deals with the concept of promise and acceptance of the same. When one person does or abstains from doing something with a view to obtain the assent of the other to the act or absistence, he is making a proposal and when the other person accepts the same the proposal becomes a promise.

The element that I have selected for my proposed contract is acceptance, an acceptance must be absolute and unqualified and should be communicated in a reasonable manner with a given time period. Performance of the conditions of the proposal is considered as acceptance of the same and should be dealt with accordingly. In this report we shall analyse different angles of acceptance of any given proposal and also see how it highlights the overall terms of the contract that is stated and proposed.

Review of the chosen element
Any proposal when accepted becomes a promise and hence acceptance is an important element of the Contract Act 1950. The key features of acceptance are – Acceptance should be absolute and unqualified, it should be communicated to the promise in such a manner that is understandable, and he is able to relate to the same. In case it is mentioned in which manner does the proposal needs to be accepted it should be accepted in the similar manner. In case it is not accepted in the prescribed manner then the person should communicate that he wants his proposal to be accepted in the similar manner and in case he fails to do the proposal is considered to be accepted accordingly Acceptance also happens by performing conditions and receiving considerations. Performance of the conditions of a proposal or acceptance of any consideration in lieu of the proposal shall be considered as acceptance of the proposal (PERTANIKA, 2017). In case the acceptance is made in words it is said to be express and in case it is not said in words the promise is said to be implied. An acceptance may be revoked at any time of the communication of the acceptance is complete as against the person accepting and not post that. Any rejection of the acceptance post that shall be considered void-ab-initio and should not be accounted for. Thus, acceptance is an important element of the contract act and for any proposal to become a promise it is important that the timing of the acceptance is correct, if the timing is not correct than the acceptance is not valid. In case we see that the acceptor fails to perform the conditions of the contract as accepted by him, he cannot charge any compensation in lieu of the same if he does not give prior notice while accepting the contract of his intentions of doing the same. Mostly there are no defined terms or rules for acceptance it is mostly done in a usual manner but in case there are expressed clauses stated than acceptance should be done in line of the same (J, 2012).

Case Precedents

Case 1: The case is between Tan Chee Hoe & Anor v. Ram Jethmal Punjabi [1983].
The main focus of the case is that acceptance must be unqualified and absolute, in case the person who has to accept the offers puts in any condition to the original offer before accepting the same then same shall be considered as a counteroffer and not acceptance. For example, Ah Chong agrees to sale his second-hand car to Ali and Ali agrees to accept the offer on one condition that the car should be repainted again, hence then that would be considered as counteroffer and that is the main focus of this case (Marques, 2018).

Thus, we see that acceptance should be without any conditions from the other party, in case conditions are placed than that leads to counteroffer and that further needs acceptance for the offer to be completed and valid. The decision given is that acceptance should be both ways for the offer to be valid.

Case 2: The case is between Adams v Lindsell 106 ER 250.
In the given case the main focus is communication of the acceptance via mail and if not received on time whether its binding on the plaintiff, in case such issue happens because of the negligence of the plaintiff. In this case Adam made an offer to sale wool to Lindsell but Lindsell accepted the offer and mailed the communication by post but Adam received the letter after two days of delay and hence he considered that Lindsell has rejected his offer and he sold the wool to some third party. Thus we see that in case it was not because of Adams delay that the letter reached to him late and since it was not in his knowledge that Lindsell has accepted his offer, the proposal between the two shall be considered as uncomplete and void and ab initio and Adam is not liable in any way for selling his goods to any third party as the offer was never completed and thus explains the importance of acceptance in the first place (Sharifah, 2019).

Conclusion
Based on the overall analysis it can be said that as per the Contract Act 1950, timing of the acceptance is very important and also it is important to understand when and how the acceptance can be revoked. In case acceptance is not revoked appropriately then that would be considered as an offer that is accepted and it becomes legally binding on both the parties. Thus, we see that it is a very important element of the Contract Act 1950 and needs to be studied thoroughly so that in case any proposal or offer is made it can be accepted or rejected at the correct time.

References
J, P. (2012). Corporate Responsibility via Malaysian Contract Law: A Concern. Soc. Sci. & Hum, 227-238.

Marques, R. P. (2018). Continuous Assurance and the Use of Technology for Business Compliance. Encyclopedia of Information Science and Technology, 820-830.

PERTANIKA, J. (2017). SOCIAL SCIENCES & HUMANITIES. An Analysis of Consensus Ad Idem: The Malaysian Contract, 73-84.

Sharifah, S. (2019). The Doctrine Of Illegality Under Section 24 Of The Malaysian Contracts Act, 1950. Journal of Malaysian and Comparative Law , 89-108.