Acceptance of the Offer

Question 1

Rules to establish when offer is accepted

Answer 1

a) . Acceptance must be ABSOLUTE AND UNQUALIFIED [The Mirror Image Rule]
b) . Acceptance must be COMMUNICATED to the offeror
c) . Acceptance must generally be in the MODE specified by the offeror

Question 2

a). Acceptance must be absolute and unqualified [The Mirror Image Rule]

Answer 2

○ The offeree cannot purport to accept an offer while at the same time altering the terms of the offer for by doing so the offeree is effectively making a new offer, known as a counter-offer.

○ The offeror is then at liberty to accept or reject the counter-offer

E.g. Butler Machine Tools v Ex-Cell 1979
e.g. Hyde v Wrench 1840

Question 3

Which case was the counter-offer rule applied by the courts?

Answer 3

Pickfords Ltd v Celestica Ltd

Question 4

Counter Offer Rules summary

Answer 4

• Any alteration of the terms of the offer amounts to a COUNTER OFFER
• The offeror can ACCEPT this counter offer if he/she wishes
• But the offeror is also perfectly entitled to turn it down
• A counter offer terminates the original offer
• So a person who makes a counter offer has no legal right to return to the original offer and claim to accept it

Question 5

b). Acceptance must be communicated to the offeror

Answer 5

○ The offeror must know that the offer has been accepted before a valid contract will come into existence.

• So acceptance usually requires actual communication.
• Therefor an oral acceptance which is inaudible due to interference on the telephone line is not effectively communicated.

Question 6

What are the exceptions to communicating an offer?

Answer 6

1. A unilateral offer
   - requires no acceptance other than performance e.g. where an offer is made to the whole world at large, there is no requirement that the person wishing to accept the offer must first communicate their acceptance to the offeror.
   E.g. Carlill v Carbolic Smoke Ball Co.
2. Postal Rule
   - if post is used the acceptance will take place as soon as the letter of acceptance is posted.
   E.g. ADAMS v LINDSELL 1818

Question 7

Conditions of the Postal Rule

Answer 7

□ The Acceptance letter must be:

- Pre-paid (stamp) 
- Properly addressed (post code) 
- Properly posted (put into the authority of the postal service) 

n.b. assumed that the offeree has posted the letter correctly UNLESS there is evidence to disprove this

E.g. Household Fire Insurance Co v Grant 1879

Question 8

Alternate forms of communication

Answer 8

§ The rule does not however apply when instantaneous communication, such as telephone or fax, is used. In such circumstances the offeror must actually receive the acceptance

§ The offeror can expressly exclude the operation of the postal rules by stating that acceptance is only effective on receipt.

E.g. Holwell Securities v Hughes 1974

Question 9

c). Acceptance must generally be in the mode specified by the offeror

Answer 9

If the offer does not specify any particular mode of acceptance then any reasonable method will be satisfactory
e.g. post, telephone, etc.

If a specific method of acceptance is requested however, then the general rule is that it must be complied with.

E.g. Felthouse v Bindley 1862

SILENCE CANNOT BE ACCEPTANCE