Question

As per the Indian Contract Act, 1872, an acceptance must be absolute and unqualified. What is the legal effect if an offeree's response introduces a new term?

• A. It becomes a valid acceptance, and the new term is incorporated as a mere suggestion.
• B. It operates as a valid acceptance if the new term is not a material alteration.
• C. It constitutes a counter-proposal, thereby rejecting the original proposal.
• D. It suspends the original proposal until the new term is accepted or rejected by the proposer.

Hint:

“Qualified acceptance” = Counter-offer → Original offer automatically lapses.

Answer 1

The Correct Option is C

Step 1: Rule of absolute acceptance.
Section 7 requires acceptance to be absolute and unconditional.
Step 2: Introducing a new term.
Adding a new term means the offeree is not accepting the same offer but making a counter-offer under Section 8.
Step 3: Conclusion.
Thus, introducing a new term rejects the original offer and becomes a counter-proposal.