Chapter 4: Acceptance Flashcards
What is the definition of acceptance?
A (1) final and unqualified expression of assent to all terms of a contract that has to be (2) communicated to the offeror
What are the 2 methods of acceptance
By words
By conduct
What happens when a particular method is stipulated to acceptance
The offeree as to utilise the same method of acceptance that has been used by the offeror
If method of accptance is not specified, then the offeror is open able to use any method of acceptance to communicate to the offeror (even if it is more advantageous compared to the offer)
What are the 2 elements of acceptance
Mirror image rule
Acceptance must be communicated to the offeror
What is the mirror image rule
The final and unqualified assent to all terms of the offer
The acceptance must be the exact same as the terms that have been discussed in the offer
What are counter offers and what is the general distinction
1 case
Counter offers must be clear and unambiguous
Counter offers are when the offeree ‘kills off’ the original offer my introducing a new term
Hyde v Wrench
What are mere inquiries and what is the general rule?
A mere inquiry does not kill off the original offer as it is just asking for more information. Merely posponing his decision until he gets more information
Stevenson v McLean
Must pay attention to wording, could be CO or inquiry
What are cross offers
When two parties are arguing back and forth about the same offer
What are the battle of the forms
When there is so many terms that keep being added, and the person that signs/accepts first is called the ‘last shot’ rule
Must read many times before accepting to terms
Powell v Lee
Facts: Managers of the school passed a resolution to appoint the plaintiff who applied for the post position for headmaster. But the decision they came to was not communicated to the plaintiff
Held: passing of resolution without communication to plaintiff doesn’t constitute a contract appointed
Brodgen v Metropolitan Railway
Lord Blackburn held: acceptance in your own mind without any intimation to the other party expressed by a mere private act (i.e. putting letter in a drawer, receiving mail but not reading) does not complete an act
But both parties have allowed it then it would be binding
Entores v Miles Far East Corp (1995) Lord Denning
Acceptance must be brought to the offeror’s attention
Scenario: If the line goes dead when bypassing a tunnel, and the offeror does not hear the acceptance on their side. It is the duty of the offeree to call back to repeat the acceptance
Scenario 2: If the acceptance was clear and the offeror didn’t hear properly, but didn’t call back to confirm, then the contract is binding
What type of offers don’t need to be communicated to the offeror
unilateral contracts
What is the general rule of silence as a form of acceptance
Silence is not recognised as acceptance, and the offeror cannot impose it on the offeree that they regard that as acceptance
As the law protects the offeree by avoiding imposition of unwanted contractual obligations
Felthouse v Bindley
Facts: Nephew owned a horse that the uncle wanted to buy. Uncle imposed silence as a form of acceptance, nephew didn’t reply and told D to not sell the horse. D sold the horse
Held: Silence did not amount to acceptance
Re Selectmove
Facts: S owed Inland Revenue large sums of income tax and national insurance. S payed two payments under alleged agreement. S heard nothing more from the Revenue until october 9th, they demanded arrears of 24,650
Gibson LJ Held: Acceptance cannot be inferred from silence, where an offeror imposed the term as acceptance.
Although if the offeree himself indicates that it is acceptable if not sound by an ascertainable time, then it would amount to agreement
What is the exception to the general rule of silence as a form of acceptance
1 case
The general rule may not apply where the offeree assumes that his silence has been effective to conclude a contract and then acts in reliance upon that belief. Some positive action is required on the part of the offeree as evidence that he has in fact accepted the offer
Where both parties specify that silence amounts to acceptance, which there must be a patent of dealings
Re Selectmove
Can there be acceptance in ignoring an offer?
1 case
R v Clarke - Reward made public by the Government of Western Australia for information leading to arrest and convicted persons
C gave info that helped them get arrested. But when the accepted the offer, it didn’t cross his mind
Held: Unless the performer conducted the act with the faith or reliance upon the offer, there would be no offer. No contract
Generally rule - said that it is not binding
What are the exceptions to the general rule of ingorance of an offer
2 cases
Exception, although not knowing they completed the act, and law says why not treat a good samaritan. As the participant still completed all the stipulated acts in the offer
- Gibbons v Proctor
- William v Cowardine
What are the 2 types of communication
Instantaneous
Non-Instantaneous
What are the 5 types of instantaneous and 2 non-instantaneous types of communication
Instantaneous
* Face to face
* Telephone
* Telex
* Fax
* Email
Non-Instantaneous
* Letters
* telegram
What is the general rule for instantaneous communications
acceptance must be communicated to the offeror. And the contract is only concluded when the offeror received the acceptance
- Entores v miles Far East Corp, Lord Denning
Brinkibon v Stahag Stahl
telex
Lord Wilberforce held although telex is considered instantaneous, it is must be noted that telex machines are merely conduct pipes which infro is channelled
Message may not reach the principle immediately
What are the 2 approaches to emails
Postal Rule
Receipt Rule
What is the discretionary note of communication via email
It is considered an “almost instantaneous communications”. Reason being as technology is invovled, there are unavoidable problems that come with it
What are exceptions to the rule of communication of acceptance
- Offeror waived the requirement of communication
- Unilateral offers
- Postal Rule (non-instantaneous communications)
Adam v Lindsell
postal rule
Facts: Letter offered to sell B goods if he received an answer by return of post.
The offer notifying the acceptance arrived 2 days late that it was supposed to, offeror already sold goods
Held: binding contract, moment he accepted.
B was entitled to recover against A in action for not completing the agreement
When does the postal rule apply
1 case
- Use of post was reasonably contemplated by both parties - Household Fire Insurance v Grant
- Post is the only reasonable form of communication. Must be reasonable for the offeree to use post
When does the postal rule not apply
- Not reasonable to post, where the use of post will lead to manifest inconvenience or absurdity
- Not reasonably contemplated by parties
- Offeror did not intend for postal rule to apply or the terms of the offer expressly excude the applcation of postal rule
- incorreclty addressed
What happens if acceptance is lost in post, what are the 2 cases that touch on this matter
Household fire Insurance v Grant
* acceptance is effective the moment it is posted
Brogden v Metropolitan Railway
* if an offeror sends through postal and says if agreed send back the answer through post, then as soon as they letter is posted (acceptance), the contract is conluded
What are the practical difficulties of postal rule
- contract formed without the offeror knowing (the delay in between receiving, the other party does not know the decision yet)
- letter is lost in post
- revocation of acceptance/retraction of the acceptance through a quicker or speedier means
What are the 5 rules to the postal rule
- Postal rule only applies to acceptance
- Postal rule only applies to Non-instantaneuos communications
- Postal Rule can be excluded
- Postal Rule does not apply to making offers (Bryne v Van Tien Hoven)
- Postal Rule does not apply to revoking of offers (Bryne v Van Tien Hoven)
What is the scenario analysis Lord Denning gave for instantaneous communications: f2f, telephone, and telex
Face to face
* If offeror shouts across the road to offeree and doesn’t hear it then there is no contract
telephone
* If during conversation line goes dead, and the offeror didn’t hear the acceptance. No contract
* If can’t hear (indistinct), then need to ask him to repeat, or no contract
Telex
* line goes dead in middle of sentence acceptance. No contract
What is the assumption if offeree believes their acceptance went through
- if acceptance occured but the listener did not catch what they said, it is their duty to ask them to repeat. Then it there is a binding contract
