acceptance - formation

Question 1

When can an offer be accepted

Answer 1

An offer can only be accepted when the offer is still open, an offer starts when it is communicated, they must know of the existence

Question 2

Taylor V Laird (1856)

Answer 2

Taylor gave up the captaincy of a ship overseas. he needed to get back to England, he worked as an ordinary crew member to get back to England but received no wages, The ship owner had received no communication of his offer to work as a crew member so no contract would exist

LP: the offeree must know of the existence of the offer

Question 3

William v Cawardine

Answer 3

concerned the provision of information that led to a conviction of a murderer, it was ascertained that the reason for giving information was not in specifically to claiming the reward, she still knew of the offer and thus could claim off of it, her reasons for giving it were irrelevant

(r v clarke)

Question 4

Stevenson v Mclean (1880)

Answer 4

the offer can only be accepted when it is still open.

On saturday, the offer was stated to be open until mon, he said a telegram asking if he could have credit terms and got no reply. At 1.34 he sent a telegram accepting the offer but at 1.25 the offeror had sent a telegram ‘sold iron to third party’ arriving at 1.46. he sued for breach of contract but the offeror argued the query about credit was a counter offer so there could be no acceptance- this was an enquiry so a binding contract was made at 1.34

Question 5

How can an offer end?

Answer 5

1. Revocation
2. Rejection
3. Lapse of time
4. Death
5. Acceptance
6. Counter-offer

Question 6

Revocation

Answer 6

it can be withdrawn at any time, the offeror must communicate the revocation as seen in Routledge v Grant (1828)

Question 7

Routledge v Grant (1828)

Answer 7

Facts
The defendant contacted the claimant in writing, offering to purchase the lease of the claimant’s home. The offer stated that it would remain open to the claimant for a period of six weeks. However, during this period, before the claimant had accepted, the defendant changed his mind about the purchase and wrote to the claimant once again purporting to withdraw the offer. After receiving this second letter, still within six weeks from the first, the claimant accepted the defendant’s offer.

Issues
The issue was whether the defendant was contractually bound by his original letter to keep the offer open for six weeks, and by extension whether he was therefore bound by the claimant’s acceptance within that period.

Decision/Outcome
The court held that the original letter did not bind the defendant to keep the offer open for a full six weeks, and as such it had been validly withdrawn by the defendant, and the claimant’s purported acceptance was ineffective. The underlying reason for this was that it is a fundamental principle of contract law that one party cannot be bound whilst the other is not. In the words of Best CJ:

“… If a party make an offer and fix a period within which it is to be accepted or rejected by the person to whom it is made, though the latter may at any time within the stipulated period accept the offer, still the former may also at any time before it is accepted retract it; for to be valid, the contract must be mutual: both or neither of the parties must be bound by it…” (p. 4).

Question 8

Byrne v Van Tienhoven

Answer 8

must be received to be effective

Question 9

Dickinson v Dodds

Answer 9

heard the revocation from a reliable source

Question 10

Rejection

Answer 10

once an offer is rejected, it cannot be accepted by the person rejecting the offer as the rejection ends the offer, however it must be communicated by saying no or using a counter offer as seen in Hyde v Wrench

Question 11

Hyde v Wrench

Answer 11

The owner of an estate offered to sell for £1000. The buyer made a counter-offer of £950. The seller did not accept this offer. The buyer then offered the original £1000, but the seller did not accept.

The court ruled that there was no contract in any of this; neither party had made an offer that the other accepted

Question 12

Lapse of time

Answer 12

an offer can come to the end by lapse of time, if it is a fixed period of time, once that is expired then there is no longer an offer to accept, if there is no time there will be a reasonable time before it runs out as seen in Ramsgate Victoria Hotel v Montefiore

Question 13

Ramsgate Victoria hotel v Montefiore

Answer 13

The defendant offered to purchase shares in the claimant company at a certain price. Six months later the claimant accepted this offer by which time the value of the shares had fallen. The defendant had not withdrawn the offer but refused to go through with the sale. The claimant brought an action for specific performance of the contract.

Held:

The offer was no longer open as due to the nature of the subject matter of the contract the offer lapsed after a reasonable period of time. Therefore there was no contract and the claimant’s action for specific performance was unsuccessful.

Question 14

Death

Answer 14

it depends on who died, offeree dies- offer ends, offeror dies- acceptance can still take place until they learn of the death

Question 15

Acceptance

Answer 15

acceptance must be positive and unqualified, this means the terms must be clear and unequivocal i.e. acceptance must match the offer. eg I agree. Felthouse v bindley

Question 16

Professor Treitel on acceptance

Answer 16

’ a final unqualified expression of assent to all the terms of an offer ‘

Question 17

Felthouse v Bindley

Answer 17

If i dont hear from you I assume the horse is mine

Silence is not acceptance

Question 18

Counter-offer

Answer 18

a response to the offer that makes a firm proposal that materially alters the terms of the offer, it is an implied rejection

Hyde v Wrench

Question 19

Acceptance key points

Answer 19

Acceptance can be in any form and does not have to be in the same form as the offer
acceptance must be communicated and full acceptance
it can not be silence
Acceptance can be conduct- unilateral conduct

Question 20

The Postal rule!!!

Answer 20

these rules only apply to acceptance letters, not counter or revocation
the rules only apply is post is the usual or expected means of communication
the letter must be properly addressed and stamped
the offeror must be able to prove the letter was posted

Question 21

Adam v Lindsell

Answer 21

The defendant wrote to the claimant offering to sell them some wool and asking for a reply ‘in the course of post’. The letter was delayed in the post. On receiving the letter the claimant posted a letter of acceptance the same day. However, due to the delay the defendant’s had assumed the claimant was not interested in the wool and sold it on to a third party. The claimant sued for breach of contract.

Held:

There was a valid contract which came in to existence the moment the letter of acceptance was placed in the post box.

This case established the postal rule. This applies where post is the agreed form of communication between the parties and the letter of acceptance is correctly addressed and carries the right postage stamp. The acceptance then becomes effective when the letter is posted.

Question 22

Byrne v Van Tienhoven

Answer 22

Facts
The defendants wrote a letter, on October 1, to the plaintiffs offering the sale of 1000 boxes of tin plates. The defendant was based in Cardiff and the plaintiff was based in New York, and letters took around 10-11 days to be delivered. The plaintiffs received this letter on October 11 and accepted it on the same day by telegram, as well as by letter on October 15. However, on October 8, the defendant sent a letter to the plaintiffs which withdrew their offer and this arrived with the plaintiff on October 20. The plaintiffs claimed for damages for the non-delivery of the tin plates.

Issue
The court was required to establish whether the withdrawal of the offer for the sale of goods was acceptable. The court would have to consider whether the contract had been agreed by the acceptance by the plaintiffs of the letter of October 1, or whether the defendants had successfully withdrawn their offer by issuing the withdrawal by letter on October 8.

Decision / Outcome
The court held that the withdrawal of the offer was ineffective as a contract had been constructed between the parties on October 11 when the plaintiffs accepted the offer in the letter dated October 1. On this basis, it was held that an offer for the sale of goods cannot be withdrawn by simply posting a secondary letter which does not arrive until after the first letter had been responded to and accepted. The court gave judgment for the plaintiff and awarded that the defendant paid their costs.

Question 23

electronic methods of acceptance

Answer 23

this is the opposite of the postal rule, acceptance only occurs via email/ fax when the offeror is aware of the acceptance. both parties must have heard it, i.e. working hours

Question 24

Entores v Miles for East Corporation

Answer 24

plaintiffs were english company contracting with D in America, each company had a teleprinter in the office which were connected to each other, instantly send messages,

acceptance took place once it was sent

Question 25

Thomas and Gander v BPE Soliciters:

Answer 25

an email of acceptance was sent on the friday before a bank holiday at 6pm and was not read until tuesday. it was held it was sent during working hours as he could see it on his mobile and could have seen it

timing is key

Question 26

Mondial Shipping v Astarte shipping

Answer 26

received a message sent just before midnight on a Friday, it would have been a breach of revocation if it was sent after midnight
timing is key for instantaneous communication