Acceptance Flashcards
Acceptance definition
In order for a contract to be formed, the offeree must validly accept the valid offer and communicate this acceptance to the offeror. Acceptance can be by words or conduct but not by silence. If both valid offer and valid acceptance exist, the contract is valid.
Acceptance must be unconditional, certain and ‘mirror’ the original offer (accepted without any conditions)
Methods of acceptance
By words or conduct
If a method of acceptance is specified in the offer, it must be complied with. If no method is specified, any effective method will do.
Request for further information
Making enquiries about an offer may not amount to a counter offer as the offer won’t change in value, therefore doesn’t terminate the offer
E.g. installments
Postal rule
If the offeror and offeree are in different locations, there are methods of acceptance which can be used such as postal rule or more modern, instantaneous methods such as email or fax. The courts will consider whether the method used for acceptance was applicable/communicated in the correct manner.
There is an exception to the rule of communication, where acceptance can be validly made before it reaches the offeror
Established in Adams v Lindsell - valid acceptance occurs and the contract is formed when acceptance is posted, not when it is received by the offeror
Postal rule only applies if it was a reasonable and acceptable method of acceptance/communication (e.g. agreed upon or usual method used by offeror) and if the letter was posted properly
Issues with postal rule
May be unfair to the offeror as they may be legally bound and not know it - however, the offeror has more power to protect themself e.g. can circumvent postal rule before posted by changing communication method
Just because it has been received, doesn’t mean it has been read
Letter can get destroyed or lost
Modern methods of communication
When instantaneous methods (e.g. telephone, email, fax) are used, postal rule doesn’t apply and acceptance occurs when it is received upon receipt
The Electron Commerce Directive 2000 provides that where a contract is formed by electronic means, an offer is made when a consumer makes/sends an order. Therefore, it’s likely that when the consumer receives an ‘acknowledgement screen’, this will constitute acceptance.
Four Seasons Holding v Brownlie
Lord Sumption stated that the rules on offer and acceptance “were adopted for reasons of pragmatic convenience”
Hyde v Wrench
Unconditional and certain
Offer must be unconditional and certain (unequivocal)
Sudbrook Trading Estate v Eggleton
Mirror image rule
Valid acceptance must ‘mirror’ the original offer
Felthouse v Bindley
Communication
Silence does not amount to acceptance
Yates Building Co v Pulleyn
Must not change terms of offer - mirror image rule
If a method of acceptance or time frame for acceptance is specified, it must be complied with
Carlill v Carbolic Smoke Ball Co
Acceptance by conduct
An offer can be accepted by conduct - performance of an act
Brogden v Metropolitan Railway
Acceptance by conduct
Acceptance can be inferred from conduct
Stevenson v McLean
Request for further info
The enquiry was not a counter offer but a request for further information, so offer was still able to be accepted
Adams v Lindsell
Postal rule
Contract is formed when acceptance letter is posted
Byrne v Van Tienhoven
Postal rule
Lindley J ruled that the postal rule does not apply in revocation of offers
Holwell Securities v Hughes
Postal rule
Notice in writing or communicated acceptance to the offeror before posting the letter excludes postal rule
Pretty Pictures v Quixote Films Ltd
Modern methods of communication
Exchange of emails won’t amount to binding contract where parties intended to conclude agreement by post
Greenclose v National Westminster Bank plc
Modern methods of communication
Simply arriving in the inbox isn’t enough, acceptance has to be read
Entores v Miles Far East Corporation
Modern methods of communication
The court held that with instantaneous communication, acceptance is made upon receipt
Thompson and Gander v BPE
Modern methods of communication
Postal rule doesn’t apply to emails - acceptance is when email arrives and it is reasonably expected to be read at this time (if in normal business hours)
Brinkibon v Stahag Stahl
Modern methods of communication
Lord Wilberforce ruled that whether communication has been received depends on the circumstances of the case and must be sent to the right person, as just clicking send doesn’t amount to effective communication
E.g. if fax or email arrives out of office hours, then acceptance occurs at the start of the next working day
Acceptance plan
Issue - Has a valid offer and acceptance been made?
Acceptance definition - Four Seasons Holding v Brownie
Unconditional and certain - Hyde v Wrench
Mirror image rule - Sudbrook Trading Estate v Eggleton, Yates Building Co v Pulleyn
Communicated - Felthouse v Bindley
Methods of acceptance:
- By words
- By conduct - Carlill v Carbolic Smoke Ball Co, Brogden v Metropoltan Railway
Request for further information - Stevenson v McLean
- E.g. installments
Postal rule - Adams v Lindsell
- Doesn’t apply in revocation of offers/notices/communicated acceptance- Byrne v Van Tienhoven, Holwell Securities v Hughes
Issues with postal rule: unfairness…
Modern methods of communication:
- Won’t suffice where post was agreed - Pretty Pictures v Quixote Films Ltd
- Upon receipt - Greenclose v National Westminster Bank plc, Entores v Miles Far East Corporation, Thompson and Gander v BPE, Brinkibon v Stahag Stahl
Conclusion - If both offer and acceptance exist, contract is valid
