Section 7: Acceptance must be absolute

Indian Contract Act • Official Statutory Text & Practice Guide

Statutory Regulation
Legal Standard
Competent Court / Tribunal
Act 1872
Statutory Defined Terms in this Section: (Click any term for official legal definition)

Legal Commentary & Landmark Judgments: Section 7

Section 7 of the Indian Contract Act, 1872 mandates that acceptance must be absolute, unqualified, and expressed in some usual and reasonable manner in order to convert a proposal into a binding contract.

  • Core Legal Standard: Section 7 establishes the mirror-image rule in Indian contract law.
  • Sub-Section (1) Provision: Sub-section (1) dictates that any deviation, condition, addition, or qualification introduced by the offeree destroys the original offer and operates in law as a counter-proposal (counter-offer).

Sub-section (2) provides that if the proposer prescribes a particular manner of acceptance, acceptance must follow that mode; if the acceptor deviates, the proposer must insist within a reasonable time, failing which the deviated acceptance is deemed validly accepted by acquiescence.

Key Landmark Precedents:
  • Hyde v. Wrench (1840) 3 Beav 334: The Court established that a conditional acceptance or a proposal to purchase on different terms constitutes a counter-offer, which permanently extinguishes and rejects the original proposal.
  • Union of India v. M/s Uttam Singh Dugal & Co. (AIR 1972 Del 110): The High Court ruled that a conditional acceptance or an acceptance 'subject to contract' does not create a concluded agreement. Until unqualified consensus on all essential terms is reached, either party is free to withdraw.
Legal Commentary:

Commercial contracts frequently fail at the formation stage due to 'battles of the forms', where purchase orders and sales acknowledgments contain conflicting standard terms. Under Section 7, each conflicting response is a counter-offer rather than an acceptance, precluding contract formation until one party unequivocally assents to the other's terms by performance or signature.