acceptance

Question 1

acceptance defined

Answer 1

• a final and unqualified expression of assent to the terms of an offer
• must correspond exactly with the offer made
  -> must be both unequivocal and unconditional
• the principle that a valid acceptance must correspond exactly with the terms of the offer is sometimes referred to as ‘mirror image rule’

Question 2

counter offers

Answer 2

• as acceptance must correspond exactly with the terms of the offer in order for it to be valid, it follows that a response that introduces new terms or varys them is not valid
  -> counter offers destroy original offers; rendering it incapable of acceptance

Question 3

Hyde v Wrench 1840

Answer 3

• wrench offered to sell Hyde a farm for £1000; Hyde rejected an offered to pay 950, wrench rejected offer, wrench sold farm to a 3rd party
  LP ->
• Hydes claim was rejected, court held that his counter offer had rejected the original offer; since the original offer had been destroyed it was no longer open for Hyde to accept
• puts into effect the idea if a necessary ‘meeting of minds’ for a contract to be capable of being performed

Question 4

roles reversed

Answer 4

roles of offeror and offeree switch:
- party who made original offer may accept the counter offer, rejected it, or make a counter offer in return

Question 5

requests for information

Answer 5

a mere request for information is treated differently to a counter offer

Question 6

Stevenson, Jacques & Co v McLean 1880

Answer 6

LP ->
- Stevensons first telegram was not a counter offer, but request for information (asked if S would accept 40 for delivery over 2 months)
- Mcleans offer still open at 1:34pm; so was validly accepted
-> therefore valid contract in which McLean was in breach
- if consensus is required for a contract to be formed, then simply asking for further information in response to an offer does not demonstrate such consensus, nor refusal of the offer
- if a response is made to an offer that does not attempt to vary the terms then it does not a counter offer, as it doesn’t reject the offers terms; therefore still open to accept by the offeree

Question 7

standard form contracts

Answer 7

• problems can arise when one/both parties use pre-prepared contract forms in relation to the general rule that the acceptance must correspond exactly to the offer
  “battle of forms” arises when one/both attempt to rely on their standard terms

Question 8

battle of forms explained

Answer 8

A makes an offer to B on a form containing A’s standard terms of business
B ‘accepts’ A’s offer on a form containing B’s standard terms of business
A’s standard terms and B’s standard terms conflict
-> at this stage there is no contract; as offer and acceptance do not match

Question 9

case of conflict

Answer 9

each communication is considered to be a counter offer, so that if a contract is formed, then it must be on the terms of the last counter offer
-> this is deemed to have been accepted and it is the terms of the final counter offer that apply to the contract as a whole

Question 10

Lord Denning comments on: Butler Machine Tool Co Ltd v Ex-Cell-O Corporation Ltd 1979

Answer 10

-> looked beyond strict wording of forms and stated:
- “in most cases when there is a battle of the forms” there is a contract as soon as the last form is sent and received without being taken objection to it; difficult is to decided which form/part/ is a term of the contract
-» some cases, won by whoever fires last shot
- if the forms terms are mutually contradictory, then the conflicting terms may have to be scrapped and replaced by a reasonable implication

Question 11

last shot rule

Answer 11

The rule principle in Brogden that acceptance can be communicated by conduct, plus
2.The rule that a counteroffer kills an earlier offer (Hyde v Wrench)
is that where parties are engaged in a battle of the forms and goods/services under the contract are being supplied, the contract will be on the terms of the party who “fires the last shot”, ie the party who sent the last set of terms that met with no objection.

Question 12

limits to last shot rule

Answer 12

If the parties have not started performing, since there will then be no “conduct” that could count as an acceptance (short of an express acceptance).

*Where a party is making it clear that they reject the other’s terms (

Question 13

tenders

Answer 13

-> invitation to tender is usually an invitation to treat, the submission of a tender is usually an offer
-» however, the acceptance of a tender does not always result in a binding contract

Question 14

x3 tender points

Answer 14

• where the tender is submitted for supplying specific goods or services on a specific date; acceptance results in a binding contract
• where the tender is submitted for supplying a specific quantity of goods over a specified period of time, acceptance results in a binding contract
• where the tender is submitted for indefinite subject matter [as or when required], then acceptance of that tender does not result in a binding contract at that time

Question 15

communication of acceptance

Answer 15

• acceptance has no effect until it is communicated to the offeror

Question 16

Lord Denning comments on: Entores v Miles Far East Corporation

Answer 16

• contract by word of mouth
• shout offer across river, don’t hear reply due to aircraft
• no contract in that moment
• if he wishes to contract, must wait until the aircraft is gone
• not bound until individual has an answer

Question 17

Marlbray Ltd v Laditi 2016

Answer 17

• CoA held that if the obligations of two parties to a contract are joint and severable, then the contract may subsist against A alone, if A has entered into a contract on behalf of both A and B but without B’s authority

Question 18

silence does not amount to acceptance

Answer 18

silence acceptance must be communicated, it follows that silence can never constitute acceptance

Question 19

Felthouse v Bindley 1863

Answer 19

• uncle and nephew negotiating sale of horse
• uncle; ‘if I hear no more from you I shall consider the horse mine at 3015’
• nephew didn’t reply but asked auctioneer to withdraw horse from auction
• auctioneer forgot and horse was sold to other party; in order to claim against auctioneer, uncle needed to prove there was a contract between him and his nephew for sale of the horse
  LP ->
• court held no contract, as nephew never communicated his intention to accept to his uncle or did anything to bind himself
  Goff LJ: ‘axiomatic that acceptance of an offer cannot be inferred from silence, save in the most exceptional circumstances’

Question 20

acceptance in unilateral contracts

Answer 20

the rule that acceptance must be communicated is waived:
- the offer can be accepted by fully performing the stipulated act or forbearance
- there is no need to communicate acceptance to the offeror
- the offer can be withdrawn before it is accepted, the offer being accepted only by some performance

Question 21

acceptance by conduct

Answer 21

acceptance may be inferred from conduct without it being expressly communicated

Question 22

Brogden v Metropolitan Railway Co 1877 - Facts

Answer 22

brogden supplied colliery for Metropolitan Railway Co; rep of B suggested a contract should be entered
- draft was prepped and sent to B who;
-> filled in the arbitration form, appended the word ‘approved’ and returned it to railway
- railways agent did not acknowledge it
- railway placed order on terms of document which B fulfilled
-> parties traded on the terms until 1873; when B refused to supply on that basis
- railway claimed breach of contract on b
- b claimed since RWC never acknowledged the altered draft, [counter offer] there was no contract

Question 23

Brogden v Metropolitan Railway Co 1877 - legal principle

Answer 23

LP ->
- HoL accepted that the completion of the arbitrators name technically rendered it a counter offer
-» however since the parties to the contract had traded on the terms of the contract, then they had accepted the counter offer as part of the agreement and B could not claim this was no contract

Question 24

Brogden v Metropolitan Railway Co 1877 - analysis

Answer 24

• if parties act as though there is a contract with particular terms in place, then the courts can concluded that the parties intended to be bound and have communicated that acceptance through their behaviour

Question 25

CoA held in Reveille Independent LLC v Anotech International 2016

Answer 25

• CoA held that a draft agreement can amount to a binding contract even if that draft contains a stipulation for signature, and the contract has not been signed

Question 26

Cranston J principles in which acceptance by conduct can be effective

Answer 26

• as long as the conduct is intended to constitute acceptance
• acceptance can be of an offer on the terms set out in a draft agreement drawn up between the parties but never signed
• if a party has a right to sign a contract before being bound, it is open to it by clear + unequivocal words to concluded the contact w/o insisting on its signature
• if the signature is the prescribed mode of acceptance, an offeror will be bound by the contract if it waives that requirement in a different mode of acceptance
• a draft agreement can have contractual force, if the terms have been agreed

Question 27

the postal rule

Answer 27

acceptance by post is an exception to the general rule that acceptance must come to the attention of the offeror before it is valid

Question 28

Adams v Lindsell

Answer 28

• L sell A wool in the post asking for reply in course of post
• sent sep 2, arrived sep 5; A posted acceptance later immediately
• by the time letter arrived, L assumed offer had been rejected, sold wool to 3rd party; A claimed breach of contract
• court held contract made at time letter was posted
• Lord Sumption commented that postal rule was developed for ‘pragmatic convenience’

Question 29

postal rule IMPORTANT

Answer 29

• applies to acceptances only, and not the revocation of an offer by post
• general rule: acceptance by post takes effect upon posting rather than delivery
  -> acceptance by post must have been requested by offeror
  -> letter of acceptance must be properly stamped and addressed
  -> must be posted in control of the post office
  -> must not create ‘manifest inconvenience or absurdity’
  -> if the letter of acceptance is received after notice of revocation of the offer has been sent
  -> if the letter of acceptance is never received by the offeror

Question 30

non-instanteous communication

Answer 30

Brinkibon v Stahag Stahl 1983

Question 31

Brinkibon v Stahag Stahl 1983

Answer 31

• an acceptance was sent by telex out of office hours
• HoL held; telex messages sent outside of office hours should not be considered to be an instantaneous means of communication, therefore acceptance could be effective only when office re-opened
  -> Lord Wilberforce: ‘no universal rule can cover all such cases, they must be resolved by reference to the intention of the parties, by sound business practice and in some cases by a judgement where the risk should lie
  -> courts should take common sense approach to contract formation in individual cases