Acceptance Flashcards
What is acceptance?
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
What must the acceptance match?
The offer - must be unconditional
Mirror image rule
Must acceptance be communicated?
Bilateral contracts - Yes
Unilateral contracts - No
What is the mirror image rule?
Principle that a valid acceptance must correspond exactly with the terms of the offer
Hyde v Wrench (1840)
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
What is the effect of intruding a new term?
There is not acceptance but a counter offer
Due to the fact that the acceptance wouldn’t match the offer
What effect does a counter offer have on the original offer?
What case illustrates this?
= a rejection of the original offer
It destroys it, tendering it incapable of subsequent acceptance
- Hyde v Wrench
Are requests for information treated as counter offers?
No if they are not:
- changing the terms of the offer/ introducing new terms
- changing the material terms in the offer
Stevenson, Jaques + Co v McLean (1880)
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
What is a battle of the forms?
Situation arises where 1/both of the parties attempt to rely on their standard terms
What are standard terms/ standard form contracts?
Terms which are not individual/ shaped for the individual
Butler Machine Tool Co Ltd v Ex-Cell-O Corporation (England) Ltd (1979)
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
What did Lord Denning say in the Butler Machines case?
‘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’
RTS Flexible Systems Ltd v Molkerei (2010)
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
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?
Reflective of Lord Denning’s approach in Gibson v Manchester City Council
Does the acceptance of a tender always result in a binding contract?
No, despite the tender being an offer
When WILL the acceptance of a tender result in a binding contract? (2)
- where the tender is submitted for supplying goods/ services on a specific date
- where the tender is submitted for supplying a specific quantity of goods over a specified period of time
When WON’T the acceptance of a tender result in a binding contract? (1)
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
Tekdata Interconnections Ltd v Amphenol (2009)
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
Can conduct amount to acceptance
What case illustrates this?
Yes
Brogden v Metropolitan Railway (1877)
- coal + agreement in the drawer case
Brogden v Metropolitan Railway (1877)
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
Can silence amount to acceptance?
What case illustrates this?
No, not for bilateral contract
- Law hinges on the +ve actions / conduct of parties
Felthouse v Bindley (1862)
Felthouse v Bindley (1862)
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
Are there any exceptions as to when silence can amount to acceptance?
Case?
Yes - Re Selectmove (1955) Tax collector (offeree) suggested that the company (offeror) could assume that he accepted if they heard nothing more from him
