Acceptance

Definition

is the expression, by words or conduct of the proposal contained in the offer and has the effect of immediately binding both parties to the contract.

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Definition (2)

 Valid acceptance MUST  (i) correspond with the offer (ii) be made in response to the offer (iii) be made by an appropriate method (iv) be communicated to the offeror

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Definition (3)

 The mirror image approach to contract formation requires acceptance must be distinguished.

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Counter-offers and rejection

 Offeree can retain their power to accept the original power if the courts finds:

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Counter-offers and rejection

1. That the original offeror’s rejection of the counter-offer includes a renewed offer on the original terms 2. That the offeree’s response was not a counter-offer but merely a request for information/clarification about availability of better termsr

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Change of terms

 A purported acceptance of an offer may introduce terms that vary or not compromise with the offer. (such as may be regarded as an acceptance with an offer to enter a further contract, Jones v Daniel (1894)).

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Battle of forms.

 Offerees counter-offer must itself be accepted before the parties are bound.  2 common contracting practices lead to difficulties when parties dispute the context of the contract, although they have commenced performance:

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Battle of forms.

ticket cases’  they concern the enforceability if terms in an unsigned contract of standard form document which one party hands over the other when making the contract. Terms only bind if the recipient of the unsigned document has reasonable notice

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Battle of forms.

2. Battle of the forms arises where the parties purport to conclude a contract by an exchange of forms containing incompatible terms.

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Nexus between offer and acceptance

 Valid acceptance must be made in response to a known offer  If the conduct is done in ignorance of the offer makes the acceptance ineffective  Shared intention or meeting of minds does not create contract, Issues arise in cross offers and rewar

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Cross offers

 2 identical offers made in ignorance of each other do not amount to a contract unless or until one is further accepted. Tinn v Hoffman (1873)

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Rewards

 Offeree must act in response to it  Public policy calls for claimants who perform beneficial acts to be rewarded for doing so. The cases are not entirely reconcilable and reveal some backward reasoning. Gibbons v Proctor (1891)

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Rewards

 Offer of reward for supply of information does not contemplate an intimation of acceptance from every person who, on becoming aware of the offer, decides to ascertain the information (Carlill v Carbolic Smoke Ball (1893)).

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Method of acceptance

 Method of acceptance may be stipulated in the offer.  Any words or conduct that objectively evince the offerors to accept are enough.  Signature on contractual doc

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Method of acceptance

 conduct in reliance on and consistent with the terms of the contract = Acceptance.  Acceptance can be by failing to object to the last shot fired by the other party in BOF cases.

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Method of acceptance prescribed

 If the offer requires the offeree to comply with a particular method of acceptance, a purported acceptance that deviates from this may NOT bind the offeror unless the offeror waives their right on compliance

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Method of acceptance prescribed

 Courts will treat the stipulated made of acceptance as permissive so that the offeror will be bound if the actual made of acceptance did not disadvantage them compared with the method prescribed.

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Revocation of the acceptance

 Acceptance NOT complete until it has been communicated to the offeror  Offer can be revoked at any time BEFORE this occurs  In the postal rule as the acceptance takes place as the letter is posted, a telephone call revoking is inoperative

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Communication of acceptance

 Offeree MUST communicate her acceptance to the offeror  Then the contract is binding and each party can rely on the existence of the contract  2 problems posed by communication of acceptance:

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Communication of acceptance

Postal: when letter is sent, offer cannot be rejected or revoked thereafter  Instantaneous: acceptance takes place when and where it comes to the offeror’s attention, the offer can be rejected or revoked before then.

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Communication other than by offeree

In principle, there would seem to be no reason why a contract should not come into existence if the offeror is made aware or is informed that the offer has been accepted even though the acceptance is NOT communicated (i.e.Postal rule)

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Waiver of communication

The offeror may expressly or impliedly waive the requirement of the notification and agree that an uncommunicated acceptance will suffice

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Waiver of communication

• There must be some overt act/conduct on the part of the offeree which is evidence of an intention to accept and which conforms to the mode of acceptance indicated by the offeror

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Waiver of communication

• Carlill v Carbolic Smoke Ball (1893): Bowen LJ stated: the person who makes the offer may dispense with notice to himself if he thinks it desirable to do so.

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Promise for an act

• Indicates performance as a made of acceptance so as to create a unilateral contract • Carlill v Carbolic Smoke Ball (1893)  it is performance, not notice of acceptance, that is contemplated.

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Postal rule

• Acceptance by post is an non-instantaneous method • Acceptance is completed when the letter is posted (Dunlop v Higgins (1848)) • Offeror is bound from that time although the acceptance may or may not been delivered

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Justification of the postal rule

• The offeror should assume the risk that the postal acceptance may be delayed or lost If so • The offeror may interpret the absence of a response as a rejection of the offer • Once the offeree posts their acceptance, they may not know if received

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Two way-Instantaneous

• Lord Wilberforce  where the condition is simultaneously met (telephone, face to face convo)

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Two way-Instantaneous

• NO delay between sending and receiving the acceptance, any failure of communication is immediately detectable and easily remediable

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Two way-Instantaneous

general rule requiring actual communication of acceptance favours the offeror

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Two way-Instantaneous

• Lord Denning  the offeror without any fault on his part does not receive the message of acceptance- yet the sender of it reasonably believes it has got home when it has not then I think there is no contract

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One way- Instantaneous

• Where the condition of simultaneity is not met • The message arrives almost instantaneously but the recipient does not necessarily access the message instantaneously

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Acceptance by silence

• General rule is that acceptance cannot be inferred from the offerees silence

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Acceptance by silence

• Felthouse v Bindley (1862)

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Acceptance by silence

• 3 reasons to support the rule that silence cannot constitute acceptance

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Acceptance by silence

1. Silence is ambiguous, it will often be difficult to infer an intention to accept from it 2. Must generally be communicated to the offeror so she knows when a contract binds both parties

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Acceptance by silence

3. The rule prevents an offeror from exploiting an offerees nertia (imposing liability unless she actively rejects the offer). The Unsolicited Goods and Services Act 1971, allows recipients of unsolicited goods to treat them as unconditional gifts...

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Contract formation by electronic means (OFFER)

• Websites advertising goods and services and inviting customers to make an online purchase are ITT (Pharmaceutical Society v Boots (1953)

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Contract formation by electronic means (OFFER)

• Traders are required by the Electronic Commerce (EC Directive) Regulations (ECR) 2002:

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Contract formation by electronic means (OFFER)

• Communication of an offer by email or electronic message will normally be presumed to have occurred when the message arrived in the server inbox of the recipient.

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