Acceptance

Question 1

An Acceptance must agree to all the terms of an offer

Case authority:

Answer 1

Harvey v Facey (1893)

• Acceptance final & unqualified
• No variation between offer and acceptance

Question 2

Offer can only be accepted that has been communicated

Case authority

Answer 2

Re Clarke (1927)

• Reward for naming a murderer case,

Question 3

Can only accept if offer was addressed to the offeree

Question 4

Cross offers are not acceptance

Even if they are identical!

Case Authority

Answer 4

Tinn v Hoffmann

• Iron case, offers crossed in the post

Question 5

Counter offers do not amount to acceptance

Case authority

Answer 5

Hyde v Wrench

Question 6

Battle of the forms Counter offer case

Answer 6

Butler Machine v Ex-Cell-O

• Machine price variation

Question 7

Acceptance must be communicated in writing, orally or by conduct

Answer 7

Brogden v Metropolitan Railway

• Contract for sale of coal

Question 8

Mere silence does not amount to acceptance

Answer 8

Felthouse v Bindley

• Auctioned horse case, If I do not hear from you, the horse is mine
• > Emphasises: Silence must be communicated to the offeror

Question 9

Examples what does not amount to acceptance

Answer 9

• Person writes acceptance but never sends it
• Company resolves a share purchase but does not communicate that
• Where a person only gives notice to his agent

Question 10

No communication is necessary where the terms of the offer lay out how to accept

Case authority

Answer 10

Carlill v Carbolic Smoke Ball Co

Question 11

Authorised party may accept on behalf of offeree (e.g. by his agent)

Case authority

Answer 11

Powell v Lee (1908)

Facts

Powell applied for a job as headmaster and the school managers decided to appoint him. One of them, acting without authority, told Powell he had been accepted. Later the managers decided to appoint someone else. Then Powell brought an action alleging that by breach of a contract to employ him he had suffered damages in loss of salary.

Question 12

Offeror may prescribe mode of communication

Answer 12

Holwell Securities v Hughes (1974)

Facts

The defendant, Dr Hughes, had granted a call option with respect to his property at 571 High Road, Wembley to the claimants, Holwell Securities Ltd, given the claimants the irrevocable right to purchase the property during the option period for the specified sum. It contained a clause stipulating that there must be notice (here, receipt of the offer) in writing within six months in order to exercise the option. The claimants sent a letter purporting to exercise the option. It was lost in the mail and was never received by the defendant.[1] The defendant then refused to complete upon the purchase and the claimants sought specific performance.

Held

On appeal it was held, dismissing the appeal, that the postal acceptance rule does not apply in every case, even if the parties involved consider the post to be an acceptable means of communication.

Question 13

Way of communication can vary if prescribed acceptance may be communicated by equal or faster mode

Answer 13

Tinn v Hoffman (1873)

Obiter dicta!:
The court also said that while post had been indicated in the offer, another equally fast method would have been successful, such as a telegram or verbal message.

Question 14

Contract formed when acceptance is received

Answer 14

Entores v Miles Far East Corp (1955)

->In Instant communication, Acceptance is where it is received! and not were posted

Held

The court held that the contract and damages were to be decided by English law. It was stated that the postal rule did not apply for instantaneous communications. Since Telex was a form of instant messaging, the normal postal rule of acceptance would not apply and instead, acceptance would be when the message by Telex was received. Thus, the contract was created in London. This general principle on acceptance was held to apply to all forms of instantaneous communication methods. Acceptance via these forms of communication had to be clear before any contract is created.

Question 15

With Telelphone, telex or face, email, etc (Instant Communication) the message of acceptance must REACH the offeror

Case Authority

Answer 15

Brinkibon v Stahag Stahl (1983)

• Read at office our as receipt time
• By sound business practice
• By intention
• No universal rule can cover all

Question 16

Postal Rule

Case authorities

Answer 16

Adam v Lindsell (1818)

Goods sold after acceptance posted

-

Household FIre Insurance v Grant (1879)

Offer to buy shares accepted by post

Question 17

Postal Rule only applies to acceptance, not revocation

Answer 17

Byrne v Van Tienhoven (1880)

• Offer accepted while revocation was in postal transit

Question 18

E-Mail

• Postal rule or receipt rule is generally determined by legislation
• Electronic Transactions acts
• >“Receipt occurs when the electronic record enters an information-processing system of the addressee”

Question 19

Summary of Acceptance

Answer 19

• Acceptance must be final and unqualified
• Acceptance must be communicated
  (in writing, orally or by conduct)
• Mere silence does not amount to acceptance
  (-> Felthouse v Bindley)
• Receipt rule
  (-> Entores v Miles Far East Corp)
• Postal rule
  (Adam v Lindsell)