Acceptance

Question 1

Counter offer

Answer 1

Counter offer does not fall short of an acceptance but rather terminates the original offer.

Question 2

Hyde v Wrench (1840)

Answer 2

A counter offer puts an end to the original offer.

Question 3

Gibson v Manchester City Council 1978

Answer 3

Court of Appeal held that letter from G asking about deducted price for repair, was a counter offer, so terminated the offer to buy the council house if they received an offer to buy.
House of Lords, on an appeal from the Council, held that letter was ‘exploratory words’ not a counter offer.
Would have been an acceptance on Council’s terms, not G’s letter.

Question 4

Battle of the forms:

BRS v Arthur Crutchley & Co (1968)

Answer 4

Latest shot in battle of forms tends to prevail.
Rules of counter offer dictates that represents current offer on the table between the parties and terminates earlier ones.

Question 5

Stevenson, Jacques & Co v McLean (1880)

Answer 5

An enquiry is not a counter offer, and therefore does not terminate the original offer. Court held breach of contract as second telegram of acceptance (after enquiry) was an acceptance.
When looking at counter offers context of negotiation and form of party’s response is vital.

Question 6

Butler Machine Tool Co Ltd v Ex-Cell-O Corporation Ltd (1979)

Answer 6

Counter offer governs

Question 7

Routledge v Grant (1828)

Answer 7

Withdrawal of offer:
‘If six weeks are given on one side to accept an offer, the other has six weeks to put an end to it’.
An offer can be withdrawn up until very moment it is accepted.

Question 8

Mountford v Scott (1975)

Answer 8

Offer cannot be withdrawn during duration of offer if consideration has been given.
(Prospective purchaser paid £1 to Offeror in order to keep promise of offer being available for 6 months. O tried to withdraw offer, held not able to withdraw as consideration had been given, however nominal it was).

Question 9

Byrne & Co v Van Tienhoven (1880)

Answer 9

A person who has accepted an offer not known to him to have been revoked, shall be in a position safely to act upon the footing that the offer and acceptance constitute a contract binding on both parties.

Question 10

Dickinson v Dodds (1878)

Answer 10

Although withdrawal of offer must be communicated, it need not be formal or direct.
- Plaintiff had known when he purported to accept the offer that the Offeror was no longer minded to sell to him. So offer had been effectively withdrawn.

Question 11

Ramsgate Victoria Hotel Co v Montefiore (1866)

Manchester Diocesan Council for Education v Commercial and General Investments (1970)

Answer 11

Where an offer is not limited in duration, it lapses after the expiration of a reasonable time.

Buckley J in Manchester posits that analysis should be objectively based upon the facts to determine whether on the facts the offeree should in fairness to both parties be regarded as having refused the offer.

Question 12

Williams v Carwardine (1833)

Tinn v Hoffman (1873)

R v Clarke (1927)

Answer 12

Knowledge of an offer is required before it can be validly accepted.
Motive is irrelevant, providing there is knowledge of the offer.

Question 13

Acceptance in Unilateral Contracts

Luxor v Cooper (1941)

Answer 13

No acceptance of the offer of a unilateral contract until the conditions were fully performed.
Until the time conditions were fully performed the Offeror could withdraw the offer or render its acceptance impossible.

Question 14

Errington v Errington (1952)

Answer 14

Father bought a house for son and daughter in law to live in and promised them that he would transfer it into their names if they paid off the mortgage.
Held that the father would not be bound to transfer the house until the condition of paying off the mortgage had been fully performed, BUT once performance of that condition had already begin it was too late for the offer to be withdrawn.

Question 15

Daulia v Four Millbank Nominess (1978)

Goff J- Preferred view of acceptance of unilateral contracts.

Answer 15

‘It is clear that in all events, until the offeree starts to perform the condition there is no contract at all, but merely an offer which the offeree is free to revoke.
But once performance has been embarked upon by the offeree it is too late for the Offeror to revoke his offer.

Question 16

Communication of Acceptance

Answer 16

Acceptance must be communicated to the Offeror, deemed effective only from the moment of such communication.
-exceptions to this rule.

Question 17

Acceptance by Conduct

Carlill v Carbolic Smoke Ball Co (1893)

Answer 17

• Broadest exception to the rule that communication of acceptance is required.

Carlill did not inform the company that she was accepted the offer of the £100 reward.

• Compant argued that the lack of communication meant that there was no contract.
• Rejected - nature of the typical unilateral contract leads naturally to an inference that the Offeror wants action in response to the offer rather than an assent.

Question 18

Brogden v Metropolitan Railway Co (1876)

Answer 18

-authority showing that acceptance by conduct can occur in a bilateral contract
Lord Blackburn: ‘what is required is the doing of an extraneous act which clenches that matter, and shows beyond all doubt that each side is bound’
-coal merchant sent a contract to Brogden.
-Brogden filled in gaps of the contract and returned the contract.
-contract was placed in a drawer by the company.
-Company ordered coal from Brogden, held that they had accepted the terms of the counter- offer by placing an order.

Question 19

British Steel Corporation v Cleveland Bridge and Engineering Co Ltd (1984)

Answer 19

• Held that the letter of intent and subsequent action taken by British Steel in response to letter did not constitute an acceptance as it wS impossible to state what the purported terms of the contract were.
• Robert Goff J

Question 20

Felthouse v Bindley (1862)

Answer 20

Silence cannot constitute acceptance.

• Silence is ambiguous therefore difficult to infer an intention to accept from it.
• Acceptance must be communicated to the Offeror so that he knows when a contract binds both parties.

Question 21

Vitol SA v Norelf Ltd 1996

Answer 21

• Intended buyers of a cargo of propane sent a telex to sellers in which they repudiated the contract.
• Sellers made no response.
• Upheld by House of Lords that seller’s silence and failure to take further steps to perform the contract had amounted to acceptance of buyers repudiation.

Lord Steyn - ‘sometimes in the practical world of businessman an omission to act may be as pregnant with meaning as a positive declaration

Question 22

Eliason v Henshaw (1819)

Answer 22

• If the Offeror makes it clear that only one form of communication will amount to a satisfactory response - Freedom of contract stipulates this stipulation be upheld.
• The courts will analyse contract formation with the assumption that practicality and efficiency are the controlling values behind the mechanics envisaged by the Offeror.

Question 23

Entores v Miles Far East Corporation (1955)

Answer 23

• Had a contract been made in Holland from where a telexed message of acceptance had been sent, or in London, where it had been received?
• CA held that acceptance occurred on receipt of the message in London.

Question 24

Entores v Miles Far East Corporation (1955)

Answer 24

Denning laid down a general rule:

• where the disruption is apparent to the maker of the acceptance, it will not be valid until it has been repeated.
• if the Offeror did not know that the message had not gotten home and he thinks it has, such as telephone offer and words are not heard clearly but the words are not repeated.
• If man who sends an acceptance reasonably believes that his message has been received - the Offeror is bound.
• estopped from saying he did not receive the message of acceptance.

Question 25

Adams v Lindsell (1818)

Answer 25

Simply once the letter of acceptance has been posted he cannot get it back.
-Lord Blackburn in Brogden: ‘an extraneous act which clean he’s the matter’.

Question 26

Household Fire Insurance Co v Grant (1879)

Answer 26

Bramwell LJ dissented from postal rule, scoffing that it was an arbitrary rule.

Question 27

Henthorn v Fraser (1892)

Answer 27

-held that the D unsuccessfully argued that the postal rule would not apply.
Lord Herschell general test for the applicability of the postal rule.
-in circumstances in which it must have been within the contemplation of the parties that post might be used as a means of communicating the acceptance of the offer, the acceptance us complete as soon as it is posted.

Question 28

Halwell Securities Ltd v Hughes (1974)

Answer 28

Construction of the offer - nothing less than actual communication of acceptance would bind the defendants to a contract of sale.

-option to our purchase property was granted to the plaintiffs.

Question 29

L. J. Korbetis v Transgrain Shipping BV (2005)

Answer 29

• Postal rule should not apply to a misdirected communication.
• case confirms that the postal rule applies to faxes.

Question 30

Postal rule and the countermanding of acceptance.

Answer 30

Acceptance must be communicated in order to become binding- a written acceptance can be countermanded before the moment of communication.

• postal rule there were seem to be no opportunity to countermand once the acceptance is committed to the post.
• Trietal: has concerns about the postal rule being countermanded by a phone call pre-emptying the letters delivery, this could be used by offerees and done purely for speculation, then merely cancel.