Types of Acceptance
Types of Acceptance
Acceptance definition: A bill of exchange, as a negotiable instrument is said to be accepted when the drawee writes the word “Accepted” across the bill and puts signature. Writing the word “Accepted “is optional but putting the signature on the bill is essential to make it valid.
Modes and Types of Acceptance:
There are two types of acceptance. Such as;
i. General Acceptance: acceptance is said to be general when it is unconditional and unqualified. A general acceptance arises when the drawee accepts the liability on the instrument without any condition and limitation on the amount.
ii. Qualifies Acceptance: Acceptance is said to be qualifies to be qualifies when the acceptor puts some condition while accepting the instrument. According to Section. 86 of negotiable instrument act, 1881, an acceptance is qualifies when :
i. It is conditional and dependent on some event,
ii. The payment will be made only when some condition imposed fulfilled,
iii. No place of payment is specifies and the payment is made otherwise,
iv. The payment is made at a time other than mentioned on the instrument.
The holder may refuse the qualified acceptance and can treat the bill as dishonoured by non- acceptance and can take legal actions to recover the dues.
Rules regarding acceptance
i. Acceptance must be absolute, unqualified and must correspond to the terms of the offer.
ii. Acceptance must be communicated by words or conduct.
iii. Acceptance is communicated when it is made in a manner prescribed.
iv. Acceptance must not be provisional or conditional
v. Mental acceptance or uncommunicated acceptance does not produce a contract.
vi. The mode of acceptance
vii. Time of acceptance
viii. Completion of acceptance.
To form an agreement a definite offer must be made by one person to another and an unqualified acceptance of the offers is necessary. An agreement becomes a contract when it is enforceable by law. Offer or acceptance alone are ineffective and cannot form a legal contract.
As a lighted match to a gun powder cannot hold back the explosion, similarly once acceptance is provided to an offer it leads to a promise and through agreement results in a valid contract.