SC: An acceptance of contract with a variation is no acceptance

The Hon’ble Supreme Court, on 05.01.2021, in the matter of M/s. Padia Timber Company(P) Ltd. v. The Board of Trustees of Visakhapatnam Port Trust Through its Secretary held that an acceptance with a variation is no acceptance. It is, in effect and substance, simply a counter proposal which must be accepted fully by the original proposer, before a contract is made.

The Hon’ble Supreme Court observed that:

It is a cardinal principle of law of contract that the offer and acceptance of an offer must be absolute. It can give no room for doubt. The offer and acceptance must be based or founded on three components, that is, certainty, commitment and communication. However, when the acceptor puts in a new condition while accepting the contract already signed by the proposer, the contract is not complete until the proposer accepts that condition. (Para 56)

An acceptance with a variation is no acceptance. It is, in effect and substance, simply a counter proposal which must be accepted fully by the original proposer, before a contract is made. (Para 56)

 Copy of judgment: Judgement_05-Jan-2021

-Adv. Tushar Kaushik

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