Acceptance

Question 1

What is acceptance?

Answer 1

A final + unqualified expression of assent to the terms of an offer

Provides intention to be bound by the terms of an offer, which then becomes an agreement

Question 2

What must the acceptance match?

Answer 2

The offer - must be unconditional

Mirror image rule

Question 3

Must acceptance be communicated?

Answer 3

Bilateral contracts - Yes

Unilateral contracts - No

Question 4

What is the mirror image rule?

Answer 4

Principle that a valid acceptance must correspond exactly with the terms of the offer

Question 5

Hyde v Wrench (1840)

Answer 5

D offered to sell a farm to the H for £1,000
H offered to buy the farm for £900
D rejected the offer
H later accepted the offer of £1000
D refused to go through with the sale, selling the farm to a 3rd party
H sought specific performance
Held: the plaintiff’s offer of £900 was a counter offer
the formal communication was not acceptance of the original offer but a further offer to buy the farm for £1000
If a new term is introduced, it is no longer acceptance, but a counter-offer

Question 6

What is the effect of intruding a new term?

Answer 6

There is not acceptance but a counter offer

Due to the fact that the acceptance wouldn’t match the offer

Question 7

What effect does a counter offer have on the original offer?

What case illustrates this?

Answer 7

= a rejection of the original offer
It destroys it, tendering it incapable of subsequent acceptance

• Hyde v Wrench

Question 8

Are requests for information treated as counter offers?

Answer 8

No if they are not:

• changing the terms of the offer/ introducing new terms
• changing the material terms in the offer

Question 9

Stevenson, Jaques + Co v McLean (1880)

Answer 9

D offered to sell some iron for 40 shillings
But didn’t indicate a delivery time
S replied: ‘please wire whether you would accept 40 for delivery over 2 months, or if not, the longest time you would give
S subsequently accepted the offer
D has already sold the iron to another party
S sued for a breach of contract
Held: S’s 1st letter was not a counter offer, it was a mere request for information
S’s acceptance was valid

Question 10

What is a battle of the forms?

Answer 10

Situation arises where 1/both of the parties attempt to rely on their standard terms

Question 11

What are standard terms/ standard form contracts?

Answer 11

Terms which are not individual/ shaped for the individual

Question 12

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

Answer 12

Seller’s offer was made on their standard terms
Contained a price variation clause
Buyer responded with an offer on their own standard terms - didn’t include a price variation clause
Buyer also included a tear-off acknowledgement slip stating: ‘we accept your order on the T+Cs stated therein’
Seller included a covering letter - trying to revise their original terms
Seller signed + returned the acknowledgement slip together with the covering letter
Seller subsequently tried to enforce the price variation clause
CA: the acknowledgement slip was a counter-offer, which was accepted by the seller
the covering letter was not sufficiently specific to revive the earlier terms
CA found in favour of the buyer

Question 13

What did Lord Denning say in the Butler Machines case?

Answer 13

‘In most cases when there his a ‘battle of the forms’, there is a contract as soon as the last of the forms is sent + received without objection being taken to it… the difficulty is to decide which form, or which part of which form, is a term or condition of the contract. In some cases, the battle is won by the man who fires the last shot… There are some cases where the battle depends on the shots being fired on both sides. There is a concluded contract but the forms vary. If they are mutually contradictory… then the conflicting terms may have been scrapped + replaced by a reasonable implication’

Question 14

RTS Flexible Systems Ltd v Molkerei (2010)

Answer 14

Parties were in negotiations
Work started on the basis of the letter of intent (not an actual agreement) that later expired
There was an agreement on many terms including the price
No written contract was ever finalised
SCt: looked at the overall communications + actions between the parties
Held: there was a contract + it was intended to be governed by the terms agreed during the negotiations

Ct had been flexible, using the letter
Contract existed without the specific need to find O+A
Reflective of Lord Denning’s approach in Gibson case

Question 15

The reasoning + ruling in the case of RTS Flexible Systems Ltd v Molkerei (2010) is reflective of what the approach taken in what earlier case?

Answer 15

Reflective of Lord Denning’s approach in Gibson v Manchester City Council

Question 16

Does the acceptance of a tender always result in a binding contract?

Answer 16

No, despite the tender being an offer

Question 17

When WILL the acceptance of a tender result in a binding contract? (2)

Answer 17

1. where the tender is submitted for supplying goods/ services on a specific date
2. where the tender is submitted for supplying a specific quantity of goods over a specified period of time

Question 18

When WON’T the acceptance of a tender result in a binding contract? (1)

Answer 18

Where the tender is submitted for indefinite subject matter such as ‘such quantities as you may order’ or ‘as and when required’

Acceptance occurs when an order is placed
The party who submitted the tender is then bound

Question 19

Tekdata Interconnections Ltd v Amphenol (2009)

Answer 19

buyer offered goods on forms setting out its T+Cs
Seller acknowledged the order
BUT stated that its own T+Cs applied
Goods were then supplied + accepted by the buyer
Held: buyer’s terms applied
CA: disagreed
Straightforward O+A analysis should be used
On this basis, the seller’s statement was a counter-offer
This was accepted by the buyer when it took the delivery of the goods - accepted by conduct

Question 20

Can conduct amount to acceptance

What case illustrates this?

Answer 20

Yes

Brogden v Metropolitan Railway (1877)
- coal + agreement in the drawer case

Question 21

Brogden v Metropolitan Railway (1877)

Answer 21

D sent B a draft agreement for the supply of coal (invitation to treat)
B completed it + sent it back (offer)
D however, put the agreement into a drawer + forgot about it
Coal = ordered + delivered on the terms of the agreement
B contended that the D had not accepted the offer
HL: there had to be some external manifestation of acceptance
In this case - was the D placing orders on the basis of the agreement
There was acceptance via conduct

Question 22

Can silence amount to acceptance?

What case illustrates this?

Answer 22

No, not for bilateral contract
- Law hinges on the +ve actions / conduct of parties

Felthouse v Bindley (1862)

Question 23

Felthouse v Bindley (1862)

Answer 23

Plaintiff had previously discussed purchasing his nephew’s horse
Uncle wrote: ‘if I hear no more about him, I consider him mine’
Horse = mistakenly sold by the D at an auction
Uncle brought action against the D for the conversion of the horse
Q = was there a valid contract between the plaintiff + the nephew
Held: nephew had not communicated his acceptance to his uncle’s offer
= no contract between them - silence cannot amount to acceptance

Question 24

Are there any exceptions as to when silence can amount to acceptance?
Case?

Answer 24

Yes - Re Selectmove (1955)
Tax collector (offeree) suggested that the company (offeror) could assume that he accepted if they heard nothing more from him

Question 25

What did LJ Gibson state in Re Selectmove (1955)?

Answer 25

(Obiter)
In principle, an offeree’s silence could amount to acceptance if the offeree undertakes to accept the offer conditional on his not speaking before the end of the ascertained time

BUT THE OFFEROR CANNOT IMPOSE SILENCE AS ACCEPTANCE

Question 26

How are unilateral contract accepted?

Answer 26

By fully performing the stipulated act

There is no need for the acceptance to be communicated

Question 27

Does the method of acceptance matter?

Answer 27

Yes
Where the offer stipulates a particular method of acceptance, the if the offeree uses a different method there may not be a contract if the offer clearly Staes that only the stipulated method of acceptance will be sufficient

Question 28

What is the postal rule?

What case established this?

Answer 28

Acceptance become effective upon posting

Adams v Lindsell (1818)

Question 29

Adams v Lindsell (1818)

Answer 29

L made an offer to A to sell some wool
Asked for a reply in the post
A replied his acceptance as soon as he received the letter
By the time that the acceptance letter had arrived, L had sold the wool to another party, assuming that the offer had been rejected
A claimed for a breach of contract
Held: the contract was made at the time the letter was posted

Question 30

What are the 5 thing that need to happen for the postal rule to be applied?

Answer 30

1. Acceptance by post must be requested by the offeror, or acceptance by post must be normal/ reasonable (Henthorn v Fraser (1892))
2. Letter must be properly stamped + addressed (Re London + Northern Bank ex part Jones (1990))
3. Letter must be posted - in control of the Post Office (LNB ex p. J - letter was handed to a postman, held not to have been posted)
4. Postal rule must not have been excluded in the offer (Howell Securities v Hughes (1974))
5. Use of the postal rule must not create ‘manifest inconveniences/ absurdity’ (HS v H)

Question 31

Does the postal rule still apply if the acceptance letter is received after not of revocation of the offer has been sent?
Case?

Answer 31

Yes

Henthorn v Fraser (1892)

Question 32

Does the postal rule apply is the letter was never delivered?
Case?

Answer 32

Yes

Household Fire Insurance v Grant (1879)

Question 33

Does the postal rule apply to the revocation of offers?

Answer 33

No

The rule doesn’t apply to making offers, revocation of offers or any other elements in contractual negotiations

Question 34

What did Lord Herschell say in the case of Henthorn v Fraser (1892) about the postal rule?

Answer 34

‘It must have been within the reasonable contemplation of the parties that, according to the ordinary usages of mankind, the post might be used as a means of communicating the acceptance of an offer’

Question 35

What does ‘notice in writing’ mean?

Case?

Answer 35

Means that actual communication of acceptance must reach the offeror

Howell Securities v Hughes (1974)
- Claimants could not rely on the postal rule to assert the existence of the contract

Question 36

Can an offeror exclude the postal rule?

Case?

Answer 36

Yes

Quenerduaine v Cole (1883)

Question 37

Brinkibon v Stahag Stahl (1983)

Answer 37

B = based in London
= buying steel from Ds, = sellers based in Austria
B sent acceptance by Telex
B later wanted to sue Ds for breach of contract
Issue = where the contract was formed (depended what law would deal with the breach)
Held: contract created in Austria
CA: dismissed the appeal
Held: contract was formed when the acceptance was received by Telex in Austria
Ct reaffirmed Entores - postal rule did not apply to instantaneous communication
BUT also stated: = no universal rule
Each case would have to be resolved by looking at the intention of the parties + sound business practice (Lord Wilberforce)