Acceptance Notes

Requirements:

• Acceptance must be unqualified

• Acceptance must be unqualified correspond exactly with terms of the offer : Hyde v Wrench – “the mirror image rule” (counter-offer: Hyde killed original offer when he offered 950 rather than 1000)

• Examination of the communication btw the parties

  • Court will examine whether at any one time, one party may be deemed to have assented to all the terms, express and implied, of a firm offer by another party

  • Objective test – Smith v Hughes

• Must be made in response to the offer

• No valid acceptance can be made by someone who is not an offeree: Boulton v Jones

• R v Clarke : offeree must act on the faith of /in reliance upon the offer – no valid contract if offeree did not know of the offer when they performed the act (unilateral contract)

• When a unilateral offer is made to the world at large – valid acceptance can be by anyone with notice of the offer – their motivation for performing the act is irrelevant

  • Williams v Carwardine

    • Williams was dying + feared the possibility of eternal damnation unless she confessed her sin

    • She knew who had killed Carwadine + also knew of 20 reward for information

    • Held – she was entitled to reward despite ulterior motive

• Gibbons v Proctor – Seems like exception – but isn’t

  • Handbills distributed 29 May offering reward money for information leading to arrest

  • Before he knew of reward Gibbons had passed information

  • One of his ‘agents’ informed the Superintendent after the distribution

  • Gibbons was entitled to reward – ‘agents’ – info reaching Superintendent is acceptance of the offer –at which point Gibbons did know about the offer

• Criticism of the rule – can penalise an individual who gives information out of moral duty – whilst rewarding those who do it for monetary reward + may allow offeror to refuse legal consequence of his offer

• Acceptance must be communicated

• Applies from the moment it is communicated – mental assent is insufficient

• Offeror cannot stipulate that he will take silence as acceptance

• Felthouse v Bindley: F offered to buy his nephew’s horse – wrote ‘If I hear no more about him. I consider the horse mine at 30 15s’ – nephew didn’t reply – there was no contract (although by telling the auctioneer that it was sold – acceptance by conduct?) (no written evidence of the contract which was required at the time under the Statute of Frauds 1677)

  • Rule that silence cannot amount to acceptance makes sense because otherwise the offeror would not know if they were bound – places unnecessary burden of offeror

  • Cannot impose positive obligation on the offeree to reject the offer

• Communication by conduct

  • Some occasions where silence constitutes acceptance if it can be discerned from conduct (Taylor v Allen)

  • Brogden v Metropolitan Railway Company: Counter offer accepted by conduct

    • Appellant had supplied coal for a long time to the defendant – they decided to have a more-long term agreement – the appellant approved a draft – sent it to the defendant who merely signed it – acceptance by conduct

    • Parties commenced performance of the agreement which HL interpreted as an acceptance by conduct

  • Intense Investments Ltd v Development Ventures - lender’s action of transferring 340,000 in loan monies to the borrower was deemed sufficient conduct to constitute acceptance of the repayment terms offered by the borrower

• Third party communication of acceptance

  • Can be accepted by third parties – where they inform the offeror of the fact of acceptance – but only with the authority of the offeree (Powell v Lee)

Exceptions to the rule of communication

• Unilateral Contracts

  • Need for communication waived /implied in conduct – Carlill v Carbolic Smoke Ball Co. – advert amounted to an offer open to acceptance

  • Daulia Ltd v Four Millbank Nominees acceptance requires complete performance – offeror may revoke at any time up to the point it has been fully performed – but implied obligation not to prevent the performance

• Conduct of the offeror

  • If it is the offeror’s own fault that he didn’t receive acceptance

  • E.g. ‘a telex of acceptance is sent during office hours but is simply not read by anyone in the offeror’s office when it is there transcribed on his machine’ – The Brimnes

  • Or – Entores v Miles Far East Corp – ‘if the ink on the teleprinter fails at the receiving end, but the clerk does not ask for the message to be repeated’ – offeror may be deemed to have received communication

• The postal rule

• Adams v Lindshell: where post is the mode of acceptance, then acceptance occurs as soon as the letter is posted

• Posted when it is put in a letter box or given to an employee of the Post Office who is authorised to deliver mail (Re London and Northern Bank ex p Jones)

• Henthorn v Fraser: F (representing building society) offered in writing to sell certain houses to H – offer open for 14 days – H received offer in person – the next day the building society posted a letter to H revoking the offer (at midday) – but at 1550 H posted a letter to the society accepting offer - 1700 H received the society’s revocation. Held – contract was made at 1550 when H posted his letter of acceptance

• Household Fire and Carriage Accident Insurance Co v Grant: rule still applied if acceptance is delayed/lost in the post, as long as there is no fault on the part of the offeree

• Hpwever: rule may be displaced if acceptance is incorrectly addressed (Getreide-Import Gesellschaft v Contimar )

  • Misdirected acceptance takes effect at the time which...

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