CONTRACTS I PROJECT

SILENCE AS ACCEPTANCE

A v. B
Problem 5

SUDIKSHA RAVI
FIRST YEAR
SECTION A
218043
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TABLE OF CONTENTS

Headings Page No.

1. Introduction 3
2. Issues 3
3. Arguments for A 4
4. Arguments for B 5
5. Judgement 6
6. Bibliography 8
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SILENCE AS ACCEPTANCE

INTRODUCTION
In consultation with the Indian Contract Act, 1872, this project aims to resolve the given
problem by providing an adequate solution through an appropriate judgement. The case deals
with silence as a means of acceptance. In this particular case, A sent an offer by post to B, to
which A received no response. Hence, A called up B and told him that if he does not respond
within fifteen days, A will consider that B has accepted his offer. B agrees to this statement,
but neglects to respond within fifteen days.
The issues presented are as follows.

ISSUES
1. Does mere silence constitute as acceptance?
2. Is there a valid contract between A and B?
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ARGUMENTS FOR A

Section 3 of the Indian Contract Act, 1872 purports that a proposal or acceptance may be made
by an act or omission, by which the person intends to communicate, or which has the effect of
communication. However, the offeror may expressly or impliedly waive the requirement of
1
communication of acceptance. In this scenario, A expressly conveyed to B that his silence
will constitute as acceptance through his telephonic conversation with B. Since notification of
acceptance is required for the benefit of the offeror, the offeror could waive this requirement
and dispense with notice to himself. 2

Silence cannot be construed as acceptance, save in certain exceptional circumstances. 3 One of

these exceptions is where the offeree makes up his mind to accept a proposal by remaining
silent, where an option holder has agreed that his silence shall be acceptance, or where the
mode of acceptance has been specified by the offeree, and he stipulates silence shall be
acceptance. 4
It is evident from the facts that option-holder B has accepted A’s proposition,
agreeing that his silence will be acceptance on the phone call between them. B undertook to
speak if he does not want the agreement to be concluded. Therefore, this can be construed as a
special circumstance. 5

It has been suggested that silence and inaction can be effective provided that they can be
regarded as clear and unequivocal and the other party has notice. 6 Both A and B had notice of
such a mode of acceptance, and the time period was unequivocally expressed as 15 days.
Furthermore, B agreed to this mode of acceptance and hence, his intention to accept the offer
is also clear and unequivocal.

Silence may not generally hold as acceptance, however, there may be further facts, which taken
together with the offeree’s silence constitute an acceptance. 7
This intention on B’s part,

1
SWEET & MAXWELL, CHITTY ON CONTRACTS (30th Ed., 2008), 169, 2-047.
2
Carlill v. Carbolic Smoke Ball Company, [1893] 1 QB 256, at 265.
3
Allied Marine Ltd v. Vale do Rio Doce SA (The Leonidas D) [1985] 2 All ER 796.
4
NILIMA BHADBHADE, THE INDIAN CONTRACT AND SPECIFIC RELIEF ACTS, VOL. 1 (Pollock and Mulla, 14th

Ed., 2012), at 119.

5
Re Selectmove Ltd [1995] 1 WLR 474, 478.
6
Vitol SA v. Norelf Ltd [1996] 3 All ER 193.
7
Ramji Dayawala and Sons Limited v. Invest Import, (1981) 1 SCC 80.
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coupled with the arguments stated above is conclusive proof that a binding contract has been
formed and A can sue B on this contract.

ARGUMENTS FOR B
In the given facts, A, the offeror, has said that B’s silence will amount to acceptance.
Acceptance of proposal and intimation of this acceptance by some external manifestation that
the law regards sufficient is necessary. 8 Generally, an offeree who does nothing in response to
an offer is not bound by its terms. This is so even if the offer provides that it can be accepted
by silence. 9

An acceptance has no legal effect until communicated to the offeror. 10 Thus, the general rule
is that silence does not amount to acceptance. 11 The absence of any response by B to an offer
cannot be construed as acceptance capable of binding him. Law does not cast a duty on the
12
person to whom a proposal is made to reply to that proposal, hence acceptance cannot be
inferred from mere silence.

For fruitfulness of acceptance, necessary intention must be proved. 13 B’s neglect in responding
to the offer does not explicitly conclude intention. When not responding to an offer, B could
have been slow, lazy or forgetful. The proposer must receive intimation that the offeree has
accepted his offer and has signified his willingness to perform his promise. 14 This willingness
cannot be concluded on behalf of B.

Mere silence cannot amount to any assent. It does not even amount to any representation on
15
which any plea of, estoppel may be founded. Moreover, construing silence as acceptance
allows for a floodgate, where people can take advantage of the normal human tendency of
inaction to say that silence conveys intention and bind others to agreements they do not intend
to enter into.

8
Bhagwandas Govardhandas Kedia v. Girdharlal Parshottamdas and Company, AIR 1966 SC 543, at 547.
9
Felthouse v. Bindley (1862) 11 CB (NS) 869.
10
supra note 3.
11
supra note 9.
12
Gaddar Mal v. Tata Industrial Bank Ltd, AIR 1927 All 407, at 410.
13
supra note 9.
14
supra note 8.
15
Bank of India Ltd v. Rustomjee Fakirji Cowasjee, AIR 1955 Bom 419.
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The Indian Contract Act, 1872 does not explicitly provide for silence as a mode of acceptance,
but Section 3 of the act mentions actions by which a party “intends to communicate such
acceptance” will constitute as acceptance. Section 7 says that acceptance must be “absolute
and unqualified”. This goes to show that acceptance must be unequivocal and intended. Silence
and inaction cannot be deemed to convey these factors. 16

Thus from the above stated arguments and interpretation of the statute, it is evident that a
binding contract cannot be formed when B’s ‘acceptance’ is given through silence. A cannot
sue B.

JUDGEMENT
17
As per the general rule, silence cannot amount to acceptance. The policy behind this
principle is that one potential contracting party should not be able to impose a contract on
another by requiring the other to take some action in order to not be bound. 18

This case does not fall into the exceptional circumstances referred to previously, as they require
complete initiation and indication on part of the offeree. 19 In this case, A, the offeror imposed
the silence as a mode of acceptance on B. It was not B’s initiative.

It is difficult to see how the silence or inaction of an offeree who fails to reply can operate as
acceptance, as there is no communication. An acceptance is not communicated unless and until
it is in some perceptible form. 20 Even if the offeror has waived communication by indicating
that acceptance by silence will suffice, as in this case, the offeror cannot subject the offeree to
contractual obligations by reason of failure to reply. 21

This silence principle protects the offeree from contracts they had no intention to accept.
Silence, by its nature is equivocal – it could be consistent with a rejection of, indifference
toward, or acceptance of the offer. 22 If there is no outward manifestation of the acceptance and
thereby the intention to accept, there is no way of knowing that it has occurred.

16
supra note 6.
17
supra note 9.
18
R. STONE, THE MODERN LAW OF CONTRACT (9th Ed., 2013), at 56 ¶2.12.3.
19
supra note 5.
20
supra note 4 at 128.

21
J. BEATSON, ANSON’S LAW OF CONTRACT (28TH ED., 2016) at 49.

22
EWAN MCKENDRICK, CONTRACT LAW: TEXTS, CASES AND MATERIALS, (6th Ed., 2014).
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Silence does not provide any objective evidence regarding the intention of the party to accept,
which may as well have changed within the 15 days’ time stipulated by A to B. Where the
offeree does not wish to accept the proposal, it is undesirable to put him to the trouble and
expense of refusing the proposal. 23 Thus, silence fails the test of unequivocality referred to in
Vitol SA v. Norelf Ltd. 24 No clear intention can be established on part of B.

The counsel for A has cited the exceptions to the rule of silence, but these cannot be effected
in countries which do not take a liberal approach on this matter (like the USA). The Indian
Contract Act, 1872 does not provide for silence as a means of acceptance, thus the onus is
placed on Common Law. Judgements given on this matter hold that mere silence cannot be
regarded as acceptance, unless there are exceptional circumstances. 25 26 This problem does not
fall into that ambit. Mere silence will not, in this case, constitute acceptance.

Therefore, Judgement is given in favour of B. It is held that B’s acceptance of A’s offer by
means of silence cannot be deemed valid, and A cannot sue B on the basis that a valid contract
has been formed.

23
supra note 4, at 118.
24
supra note 6.
25
supra note 7.
26
supra note 15.
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BIBLIOGRAPHY
TABLE OF CASES:

1 . Allied Marine Transport Limited v. Vale do Rio Doce SA (The Leonidas D) [1985]
2 All ER 796
2. Bank of India Ltd v. Rustomjee Fakirji Cowasjee, AIR 1955 Bom 419
3. Bhagwandas Govardhandas Kedia v. Girdharlal Parshottamdas and Company,
AIR 1966 SC 543
4. Carlill v. Carbolic Smoke Ball Company [1893] 1 QB 256
5. Felthouse v. Bindley (1862) 11 CB (NS) 869
6. Gaddar Mal v. Tata Industrial Bank Ltd, AIR 1927 All 407
7. Ramji Dayawala and Sons Ltd v. Invest Import, (1981) 1 SCC 80
8. Re Selectmove Ltd [1995] 1 WLR 474
9. Vitol SA v. Norelf Ltd [1996] 3 All ER 193

BARE ACTS:

1. The Indian Contract Act, 1872.

BOOKS:

1. J. BEATSON, ANSON’S LAW OF CONTRACT (28th Ed., 2016)

2. SWEET & MAXWELL, CHITTY ON CONTRACTS (30th Ed., 2008)
3. NILIMA BHADBHADE, THE INDIAN CONTRACT AND SPECIFIC RELIEF ACTS, VOL. 1
(Pollock and Mulla, 14th Ed., 2012).
4. RICHARD STONE, THE MODERN LAW OF CONTRACT (9th Ed., 2013)
5. EWAN MCKENDRICK, CONTRACT LAW: TEXTS, CASES AND MATERIALS, (6th Ed.,
2014).