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Communication Of Acceptance Notes

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In some cases acceptance by conduct is permissible:
o This is the case in unilateral contracts: Carlill v Carbolic
Smoke Ball Co (1893)
 This may seem difficult to reconcile with judicial points re ad idem

Incomplete negotiations may be overtaken by the parties'
subsequent conduct.
 Brogden v Metropolitan Railway (1876) - Brogden supplied coal to MR for two years without a contract.
Railway drew up contract to continue relationship.
Brogden made a counter offer (left some parts blank).
This was put in the desk draw.
 HoL held that Brogden's counter-offer had been accepted by the conduct of the company in placing orders for coal on its terms.
 Lord Blackburn: "if both parties have acted upon that draft and treated it as binding, they will be bound by it".
 British Steel Corporation v Cleveland Bridge
[1984] - shows limits of the realism of Brogden
 British Steel received a letter of intent from
Cleveland, expecting a contract to follow shortly.
Requested BS started manufacture immediately.
Parties failed to reach a consensus.
 Held no contract had arisen (BS could therefore claim on quantum meruit basis), Goff J found that it was impossible to say what the terms of this purported contract were.
 No unilateral contract had arisen as terms were undecided.
 Professor Atiyah argues that this case sets a limit to what can be done by taking a "realistic" view of contract formation.
Acceptance by Silence/Inactivity - Generally not held to be valid acceptance.
o Felthouse v Bindley (1862) - Uncle wrote to Felthouse offering to buy a horse, saying "If I hear no more about him, I
consider the horse mine at £30 15s". F never replied, but instructed auctioneer to sell everything except his horse which was already sold. Auctioneer sold horse.
 Action for tort of conversion against auctioneer failed as there was no acceptance on the facts.
 This case actually mostly turns on its facts and the
Statute of Frauds.
 Willes J; "it is also clear that the uncle had no right to impose upon the nephew a sale of his horse …unless he chose to comply with the condition of writing to repudiate the offer".

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