Lecture 3-Acceptance Flashcards
Acceptance
Acceptance of the offer is a clear indication of the offeree’s unqualified agreement to the terms of the offer in the manner set out in the offer.
Principle of objective intention applies.
Would it appear to reasonable person in offeror’s position that the offeree was accepting the offer?
Key Characteristics
it must respond to the offer
must be unconditional,
and must correspond precisely with the offer’s terms. (mirror-image)
Communication
Acceptance has no legal effect until communicated.
Prescribed modes of acceptance
Manchester DCE v Commercial and General Investments
If an offeror stipulates by the terms of his offer that it may, or that it shall, be accepted in a particular manner a contract results as soon as the offeree does the stipulated act, whether it has come to the notice of the offeror or not
Silence
FELTHOUSE V BINDLEY (1862)
A silent acceptance which is not communicated is not ordinarily a valid acceptance in law, and a provision in an offer stating that silence will be treated as acceptance will have no effect.
The logic behind this is that because a contract is a consensual instrument, offers must be voluntarily accepted
Silence Exception
Re Selectmove [1995]
The Court of Appeal suggested (without conclusively deciding) that if the offeree himself indicated that the offer should be taken as accepted ‘if he does not indicate to the contrary by an ascertainable time’, that might also be an exceptional case in which silence could constitute acceptance.
Acceptance ends with
1.Revocation
2.Conduct
3.Counter-offers
4.Lapse of time
5.Death of offeror
6.Postal methods
7.Instantenous methods
8.Unilateral acceptance
Revocation
Revocation cannot take place after a valid acceptance.
BUT an offeror can withdraw an offer at any time before it is accepted
The revocation of the offer must be communicated clearly.
Revocation Communication
A third party-Dickinson v Dodds
Time periods
What would be considered reasonable if no fixed time period. If there is a fixed time period, then the offer lapses after that time.
Ramsgate Victoria Hotel v Montefiore
Death of offeror
Depends on the nature of the contract- if it involves a specific type of personal service that cannot be performed by anybody else, then the offer will usually lapse. If it is more of a general supply contract, then the offeror’s representatives could supply a substitute and make arrangements, thus the offer need not lapse.
Revoking Acceptance
The rule is generally taken to be that acceptances cannot be revoked.
Counter-offers
HYDE V WRENCH (1840)
The impact of a counter offer extinguishes the original offer (it is not a mirror-image)
Acceptance by Conduct
BROGDEN V METROPOLITAN RAILWAY (1877)
The court found that even though the form had not been signed and technically required acceptance, they found that acceptance was valid through performing the contract without alternating any terms.
Postal Rule
Adams v Lindsell (1818)
If an offer is accepted by post, the general rule is that acceptance is taken to have occurred as soon as the communication is posted.
Extension
Household Insurance v Grant
The postal rule applies even when the letter of acceptance is lost in the post and never delivered.
Postal Rule does not apply to
It only applies to letters posted- not delivered by hand or by currier.
The Postal Rule does not apply to revocation of an offer.
Henthorn v Fraser [1892]
‘Absurd Outcome’
Holwell Securities Ltd v Hughes [1974]
First, it does not apply when the express terms of the offer specify that the acceptance must reach the offeror.
Secondly, it probably does not operate if its application would produce manifest inconvenience and absurdity
Instantaneous Methods
Entores Ltd v Miles Far East Corp [1955]
Postal rule DOES NOT apply and telex only effective only on receipt.
The court held that in cases of instantaneous communication, as it held telexes to be, the contract was complete when the acceptance was received, rather than when it was sent.
Entores Affirmed by
Brinkibon Ltd v Stahag Stahl [1982]
The effect that the rule would not necessarily apply in all circumstances—for example, where messages were sent out of office hours or to persons without authority to act upon them. Cases must, therefore, ‘be resolved by reference to the intentions of the parties, by sound business practice and in some cases by a judgement where the risks should lie’
Current Authority
THOMAS V BPE SOLICITORS [2010]
Blair J held that the Entores rules did apply to email. The general rule, he said, ‘is that the acceptance of an offer is not effective until communicated to the offeror’. The postal rule is ‘an anomalous exception …, which is limited to its particular circumstances’.
An emailed communication was received if it was available to be read, subject to the qualifications relating to office hours and authority set out by Lord Wilberforce in Brinkibon.
Unilateral Contracts
They are often referred to as ‘if contracts’.
Great Northern Railway Company v Witham (1873)
Types
1.Offer made to an individual
Great Northern Railway Company v Witham (1873)
2.Offer made to the public at large
Classic example – offer of a reward for the performance of some service.
Carlill v Carbolic Smoke Ball Co [1893]
Revocation
Potentially open to offeror to revoke the offer any time before completion of performance arises – even if an individual had commenced performance because no acceptance until fully performed
Estoppel
Equitable Approach whereby the courts deem it unfair for a party to go back on their promise
Case Authority
ERRINGTON V ERRINGTON [1952]
A unilateral contract cannot be revoked once the party has entered on the performance of the act required.
Equitable principles apply
Collateral Contracts
Collateral contracts sit alongside the main contract, and are typically made to support some aspect of that contract.
Arguing collateral contracts
The primary unilateral contract – completed in the usual manner.
An additional collateral contract – an implied promise not to revoke the main offer once the offeree has commenced performance.
Auctions-an implied promise to sell to the highest bidder.
Tenders
The documents that accompany the invitation to tender are frequently treated as creating a collateral contract between the parties, which regulates the process of contract formation in much the same way as do the conditions of sale that are attached to auctions.
Battle of the forms
The implication of British Road Services is that contract formation in a battle of the forms situation follows what has been called the ‘last shot rule’, under which whoever gets in the last shot before performance will have their terms govern the contract. In a contract for the sale of goods, this will usually be the buyer.
Case Authority
BUTLER V EX-CELL-O CORP LTD [1979]
The person who fires the last shot gets the contract’ (determining acceptance to a valid offer)-Denning
