ACCEPTANCE
An acceptance is an unqualified expression of assent to the terms
proposed by the OFFEROR
Acceptance can be made by
1. Words or writing…. It can be made by
2. Conduct i.e. Carbolic Smoke ball case
But conduct will only amount to acceptance if it is made with clear
intention objectively assessed of accepting the offer
A purported acceptance which does not accept all the terms and
conditions of the offer but which in fact introduces new terms is not
acceptance but will be treated as a Counter-Offer
Effect of a counter-offer is to kill off the original offer Hyde v Wrench
Butler v Ex-Cell-O Corp - keyword price variation clause
COMMUNICATION OF ACCEPTANCE (i.e. silence does not mean
concern)
Entores v Miles Far East Corp
Lord Denning LJ “If an oral acceptance is drowned out by an
overflying aircraft such that the offeror cannot hear the acceptance
then there is no contract….similarly where two people make a
contract by telephone and the line goes dead so that the acceptance
is incomplete, then the acceptor must telephone the offeror and
repeat the acceptance…….
Where however, the acceptance is made clearly and audibly but the
offeror does not hear what is said, nevertheless a contract is
concluded unless the offeror makes it clear to the acceptor that he did
not hear.
ACCEPTANCE IN IGNORANCE OF OFFER
X offers $50 for the safe return of his dog
Y unaware of the offer finds and returns the dog
Is Y entitled to the money????
Rights and Obligations in a bilateral contract SO WHAT IF
X offers to sell the dog to whoever finds it for $50
Y unaware of offer finds and returns the dog
Is he bound then to buy the dog???? Subjecting him to obligation of
which he is unaware
 Knowledge of offer is not necessary in reward cases Carbolic
smoke ball
 But is necessary in bilateral contracts.
R v Clarke where the party claiming the reward at the time he gave the information was held
not to be entitled to the reward
PRESCRIBED METHOD OF ACCEPTANCE
Where the offeror prescribes a specific method of acceptance, the
general rule is that he is not bound unless the specific terms of his
offer are complied with, however if he must do so he must state it in
clear words to achieve this purpose………….otherwise the courts will
hold him bound if the acceptance is made using means which is no
less advantageous to him than the form prescribed
Manchester Diocesan Council for Education v Commercial and General investments ltd.
ACCEPTANCE BY SILENCE
General rule – acceptance will not be implied from mere silence
…..unless I hear from you in say 2 days I will assume that there is a
contract there by imposing a contractual obligation on the offeree
Felthouse v Bindley
A case well criticized
Where there has been a course of dealing between parties may give
rise to the inference that silence amounts to acceptance
Offeree assumes that his silence amounts to a contract and acts in
reliance upon that belief
EXCEPTIONS TO RULE REQUIRING COMMUNICATION OF ACCEPTANCE
1. Unilateral Contracts Carbolic smoke ball
2. POSTAL rule Adams v Lindsell
This is something of a museum piece. The public perception at that
time was that a letter once posted will reach its destination.
In Modern times the evolution of much faster forms of
communication makes this assertion look anomalous
Proposes that acceptance takes place when the letter of
acceptance is posted by the offeree
Justifications
a. The Postal service is the agent of the offeror so a receipt of
the acceptance by the Post office is equivalent to receipt by
the Offeror. Post Office do not have the power to contract on
behalf of the offeror
b. Offeror chose to start negotiations through the post and
therefore assumes all the associated risks. It could be the case
that it was rather the Offeree that initiated negotiations
Henthorn v Fraser – postal rule only applies where it is reasonable
to use the post
Example
X makes an offer to Y stating that it is open till 5pm on Friday
Y posts his acceptance on Friday at 4.45 knowing that it will not reach
X by 5pm
If you apply the General rule………..
1. Letter of Acceptance is lost in the post. Household fire insurance
v Grant, rejected in Scotland by Lord Shand in Mason v Benhar coal
(responsibility lies with the Oferee who sends the acceptance to
ensure that it gets to the Offeror
position in England – General rule
Professor Trietel – if loss in post is a result of incorrect address,
then there cannot be a contract on posting for while offeror
takes the risk of delay in posting cannot be responsible for the
carelessness of the offeror
2. Offeree posts his acceptance and then sends a rejection by a
quicker means of communication
A. It must be reasonable to use the post. Henthorn v Fraser
B. Properly worded term in offer ( reply must reach me by 5pm)
C. Postal rule does not apply to instantaneous forms of
communication Entores v Miles far east corp
D. Postal rule ought not to apply where it would lead to manifest
inconvenience and absurdity. Holwell securities ltd v Hughes
IT is submitted that the better approach will be to abolish the General
rule and replace it with the Normal rule that acceptance takes place
when the acceptance is received by the Offeror subject to the
qualification that the Offeror cannot revoke the offer once the
acceptance has been posted
ACCEPTANCE IN UNILATERAL CONTRACTS
The principal difficulty in unilateral contract lies in determining when
the offer can be withdrawn which in turn depends upon when the
offer was accepted
Example
X offers $10000 to WYZ if WYZ will walk from London to Newcastle
When does Y accept the offer?
When he expresses an intention to accept the offer? Or
When he reaches York on his way? Or
Only when he gets to Newcastle?
Case: Daulia ltd v Four Millbank nominees ltd Lord Goff
“Whilst I think the true view of unilateral contract must in general be
that the offeror is entitled to require full performance of the condition
which he had imposed and anything short of that he is not bound,
that must be subject to one important qualification which stems from
the fact that there must be an implied obligation on the part of the
Offeror not to prevent the condition becoming satisfied which
obligation it seems to me must arise as soon as the Offeree starts to
perform”
Errington v Errington
Luxor(Eastbourne) ltd v Cooper
TERMINATION OF OFFER
5 main methods by which an offer may be terminated
1. Withdrawn
a. withdrawal can be at any time before acceptance and in the
case of unilateral contracts before the offeree starts to
perform the condition
b. withdrawal must be brought to the attention of the Offeree
and communication need not be done by the Offeror
Dickinson v Dodds
c. Withdrawal by post – Byrne v Van Tienhoven
When is the revocation actually brought to the attention of the Offeree. Is it when he receives the letter
or when he reads it. In Brimnes Court r Appeal held that in the case of a telex machine it was when it
was received on the machine during business hours
2. Rejected – counter offer Hyde v Wrench
3. Lapse of time – where there is a time limit and where there is no
time limit reasonable time
4. Conditional offer which comes to an end on the occurrence of an
event
5. On the death of the Offeror.