Chapter 4: Acceptance

Question 1

What is the definition of acceptance?

Answer 1

A (1) final and unqualified expression of assent to all terms of a contract that has to be (2) communicated to the offeror

Question 2

What are the 2 methods of acceptance

Answer 2

By words

By conduct

Question 3

What happens when a particular method is stipulated to acceptance

Answer 3

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)

Question 4

What are the 2 elements of acceptance

Answer 4

Mirror image rule

Acceptance must be communicated to the offeror

Question 5

What is the mirror image rule

Answer 5

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

Question 6

What are counter offers and what is the general distinction

Answer 6

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

Question 7

What are mere inquiries and what is the general rule?

Answer 7

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

Question 8

What are cross offers

Answer 8

When two parties are arguing back and forth about the same offer

Question 9

What are the battle of the forms

Answer 9

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

Question 10

Powell v Lee

Answer 10

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

Question 11

Brodgen v Metropolitan Railway

Answer 11

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

Question 12

Entores v Miles Far East Corp (1995) Lord Denning

Answer 12

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

Question 13

What type of offers don’t need to be communicated to the offeror

Answer 13

unilateral contracts

Question 14

What is the general rule of silence as a form of acceptance

Answer 14

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

Question 15

Felthouse v Bindley

Answer 15

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

Question 16

Re Selectmove

Answer 16

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

Question 17

What is the exception to the general rule of silence as a form of acceptance

Answer 17

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

Question 18

Can there be acceptance in ignoring an offer?

1 case

Answer 18

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

Question 19

What are the exceptions to the general rule of ingorance of an offer

2 cases

Answer 19

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

Question 20

What are the 2 types of communication

Answer 20

Instantaneous

Non-Instantaneous

Question 21

What are the 5 types of instantaneous and 2 non-instantaneous types of communication

Answer 21

Instantaneous
* Face to face
* Telephone
* Telex
* Fax
* Email

Non-Instantaneous
* Letters
* telegram

Question 22

What is the general rule for instantaneous communications

Answer 22

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

Question 23

Brinkibon v Stahag Stahl

Answer 23

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

Question 24

What are the 2 approaches to emails

Answer 24

Postal Rule

Receipt Rule

Question 25

What is the discretionary note of communication via email

Answer 25

It is considered an “almost instantaneous communications”. Reason being as technology is invovled, there are unavoidable problems that come with it

Question 26

What are exceptions to the rule of communication of acceptance

Answer 26

• Offeror waived the requirement of communication
• Unilateral offers
• Postal Rule (non-instantaneous communications)

Question 27

Adam v Lindsell

postal rule

Answer 27

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

Question 28

When does the postal rule apply

Answer 28

• 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

Question 29

When does the postal rule not apply

Answer 29

• 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

Question 30

What happens if acceptance is lost in post, what are the 2 cases that touch on this matter

Answer 30

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

Question 31

What are the practical difficulties of postal rule

Answer 31

• 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

Question 32

What are the 5 rules to the postal rule

Answer 32

• 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)

Question 33

What is the scenario analysis Lord Denning gave for instantaneous communications: f2f, telephone, and telex

Answer 33

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

Question 34

What is the assumption if offeree believes their acceptance went through

Answer 34

• 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