Acceptance Flashcards
What is acceptance?
If there is no acceptance - there is no agreement / contract
Once accepted, it is valid and parties will have a binding contractual relationship (if there is evidence of consideration and intention)
“Mirror image” = acceptance must correspond exactly with terms (must mirror offer)
If a new term is introduced or certain conditions - not acceptance but a counteroffer.
CASE: Kyle v Revenue and Customs
- enquiry asking if amount could be paid over 9 months was not acceptance as not “mirror image”.
Conditional acceptance - “subject to contract” or “sale agreed” - means person accepts but only on the condition that a formal binding contract is agreed later (does not bind parties)
What are the four methods of acceptance?
- Oral
- Writing
- Conduct
- Modern methods of communications
What is the general rule of communication of acceptance?
Acceptance must be communicated to other party to be valid - the offeree must let offeror know accepted.
The offeror can’t take silence as acceptance or specify that silence constitutes as acceptance.
CASE: Felthouse v Bindley
Offeree may communicate acceptance by any method - as long as it is received.
If offeror provides only a particular method - the offerer has to do that method or by any means no less effective than that method.
CASE: Yates Building Co Ltd v RJ Pulleyn & Sons
Acceptance must be communicated by someone authorised to accept.
CASE: Powell v Lee
CASE: Felthouse v Bindley
(Rule of communicate of acceptance)
Nephew selling / negotiating sale of horse to claimant
Claimant wrote and offered to buy the horse saying “if I hear no more about him, I consider him mine”
Horse then sold at auction in error.
Claimant sued defendant.
Court held that there was no completer contract between him and the nephew as the nephew has not communicated acceptance.
CASE: Yates Building Co Ltd v RJ Pulleyn & Sons
(Rule of communicate of acceptance)
The acceptance was “notice in writing to be sent registered or recorded delivery”
Held acceptance by ordinary post was sufficient as it fulfil requirements to receive written notice of acceptance.
The stipulated method was to benefit the offeree - it was their risk to not.
CASE: Powell v Lee
(Rule of communicate of acceptance)
Claimant went for a interview and was told the application had been accepted.
Panel then changed their mind and claimant sued.
Held acceptance was not valid as it was given by someone who did not have authority.
What are the 3 most common exceptions to the general rule of communication of acceptance?
- By conduct
- By unilateral offers
- By post
Offeror can choose (expressly or implicitly) to set aside need for acceptance to be communicated.
What is acceptance by conduct?
Exception to the general rule of communication of acceptance.
Party acts in accordance with the terms proposed by offeror.
If offeror also acts suggesting obligations then likely to be held they accepted.
CASE: Brogden v Met Railway
Written agreement was not formally accepted but held agreement formed as both parties acted in accordance with terms of draft.
CASE: Pickfolds Ltd v Celestica Ltd
Claimant never formally accepted but carried out the works. Held that the actions, viewed objectively, implied accepted of defendants offer.
Courts principle when deciding whether contract is valid - “the reasonable expectation of honest sensible businessman”
What is acceptance by unilateral offer?
Exception to the general rule of communication of acceptance.
In unilateral contracts - accepted by performing the requester action / “performing the conditions”
Once fully performed, the offeree to notify the offeror that performance has taken place.
Offeror does not require notification of acceptance “apart from notice of performance”
What is acceptance by post?
Exception to the general rule of communication of acceptance.
The contract is made as soon as letter has been posted - even if it delayed or never reaches other party.
The “postal rule”
CASE: Est Adams v Lindsell
Conditions of postal rule:
1. Letter correctly stamped and addressed
- Parties can exclude rule (either express or implied)
CASE: Holwell Securities v Huges - Only applies when reasonable to use post (unlikely to apply where offer was made by “quicker” means of communications)
CASE: Quenerduaine v Cole - Not apply if it would “lead to manifest inconvenience or absurdity”
CASE: Est Adams v Lindsell (and applied in Household Fire v Grant)
(Acceptance by post)
Defendant offered to buy shares in claimants company.
Claimant posted letter accepting his offer.
Defendant did not receive letter.
Held that contract was made as soon as letter was posted.
Defendant liable to contribute as he was a shareholder.
CASE: Holwell Securitiee Ltd v Hughes
(Acceptance by post)
“By notice in writing” within 6 months.
Letter was posted but not received
Held requirement of “notice” implied Hughes should actually know about acceptance so no agreement.
CASE: Quenerduane v Cole
(Acceptance by post)
Offer made by telegram and acceptance was sent by post.
Not valid as method of acceptance was slower than the method the offer was made.
What is acceptance by modern method or communication?
Acceptance is less clear as message is transmitted straight away but acceptance might not be read or heard straight away.
Examples - fax, answer machines, emails, voicemails
CASE: Entores v Miles Far East
Held that where an offeree thinks acceptance has been received - but it hasn’t - offeror is bound as it is their own fault they didn’t receive acceptance.
This exemption, to the principle where acceptance must be communicated, only applied where there was an attempt to accept offer but offeror did not receive it because of their fault and the person accepting it had no reason to believe the message has not been received.
CASE: Brinkibon v Stahag Stahl
Held that acceptance sent to commercial offeror during office hours was valid as soon as it is received (not read)
If sent outside office hours - suggested it will have effect at the time when sender could reasonably expect it to be read.
