If the offeree fails to respond to an offer made to him, his silence can not be confused with acceptance. But, there is an exception to this rule. It is stated that, within 3 weeks of the date on which the offer is made, the non-acceptance shall be communicated to the offeror. Otherwise, the silence shall be communicated as acceptance. Acceptance by silence Silence means inaction. It would, therefore, exclude cases of acceptances by conduct. Although under section 7(2) the offeror may prescribe a way of acceptance, he cannot prescribe silence as a way of acceptance. This has been held in numerous Indian cases, following a people case of Felthouse v. Bindley. This principle is in consonance with the explanations of good judgment because otherwise numerous contracts will result by mere omission to reply to letters by unwilling contractors.
Felthouse v Bindley  EWHC CP J35
Facts- The complainant, Paul Felthouse, had a conversation along with his nephew, John Felthouse, about buying his horse. After their discussion, the uncle replied by letter stating that if he didn’t hear anymore from his nephew concerning the horse, he would consider acceptance of the order done and he would own the horse. His nephew didn’t reply to the present letter and was busy at auctions .The defendant, Mr Bindley, ran the auctions and also the nephew advised him to not sell the horse. However, unintentionally he ended up selling the horse to somebody else.
Issues– Paul Felthouse sued Mr Bindley within the tort of conversion, with it necessary to indicate that the horse was his property, so as to prove there was a legitimate contract. Mr Bindley argued there was no valid contract for the horse, since the nephew had not communicated his acceptance of the complainant’s offer. The difficulty during this case was whether silence or a failure to reject a proposal amount to acceptance.
Held- It was held that there was no contract for the horse between the complainant and his nephew. There had not been an acceptance of the offer; silence didn’t amount to acceptance and an obligation can not be imposed by another. Any acceptance of a suggestion must be communicated clearly. Although the nephew had intended to sell the horse to the complainant and showed this interest, there was no contract of sale. Thus, the nephew’s failure to retort to the complainant didn’t amount to an acceptance of his offer.
To conclude, The Indian Contract Act contains simple rules regarding offer and acceptance which are largely, but not wholly, supported land common law. These provisions have come in for elaboration during the course of a century. the event of the distinction between a suggestion and an invitation to supply, the foundations on formation of accept cases of auction sales (especially where such sale is announced to be subject to confirmation by the authorities), and tenders and telephonic conversations, has been on the lines of English law. The view of the bulk of the judges of the Supreme Court within the Bhagwandas case that where the Mentioned Act is silent country law should guide us on the premise of justice, equity and good conscience unless Indian conditions are different, would tend to eliminate experimentation with solutions unknown to English law. However, many new situations haven’t precede the courts. Examination of offer and acceptance may be a standard law method wont to assess whether a two-party arrangement exists. a suggestion could be a sign of their willingness to agree on certain terms from one person to a different. If there’s an express or implied agreement, a contract will then be formed. A contract is claimed to return into being when the acceptance of a proposal has been told to the offeror by the offeree. The communication of the offer shall be complete when it involves the knowledge of the person to whom the offer is formed and also the communication of the acceptance shall be complete when the acceptance is put during a course of transmission to the offeror. Therefore, offer and acceptance are the essential elements of a contract and in either case, it should be done on the premise of one’s power and with the intention of concluding a legally binding agreement.