Acceptance

Front 1

Acceptance

Back 1

Final, unconditional and certain indication of agreement to the terms of an offer, communicated to the offeror

Front 2

Acceptance or Counter-Offer?

Back 2

If the response seeks to vary the terms of the offer, or to insert new terms, then it is not an acceptance of the offer – it is a counter-offer.

Front 3

Swan v Miller [1919]

Back 3

Offered to buy premises for £4,750.

Unaware that the premises would be subject to a ground rent of £50.

Vendors thought that the purchaser was aware of this and replied accepting his offer of £4,750 “plus £50 annual rent”.

COA held that no contract:

Vendor had sought to impose a new term, reply did not constitute an acceptance, but a counter-offer.

Front 4

Wheeler v Jeffrey [1921]

Back 4

Agents - defendants goods. During correspondence no mention of a commencement date was made.

June 10 “we agree to carry on your agency 1st July”.

June 12, the defendants wrote acceptance.

COA held contract formed on June 12. The mention of a commencement date in the 10 June letter added a new term and so that letter could not be an acceptance. Rather it was a counter-offer which was accepted by the defendants in their letter of June 12.

Front 5

Fact of acceptance

Back 5

1. Express Acceptance

2. Implied Acceptance

3. Battle of the forms

Front 6

Express Acceptance

Back 6

An acceptance must accept the terms of the offer without varying or altering the terms of the offer in any way.

Front 7

Implied Acceptance

Back 7

Absence of formal agreement exists which governs the relations between parties.

Front 8

Brogden v Metropolitan Railway Co (1877)

Back 8

Supplied - coal for a long period of time, no written agreement. The defendant - relationship on a more formal footing, sent draft agreement. The plaintiff made some amendments, signed the draft, returned it.

The defendant took no further steps. Both parties acted in accordance with the terms of the agreement.

By acting in accordance with the terms of the agreement, the defendant had tacitly communicated its consent to the terms of the agreement, so as to accept the offer made, and a contract therefore came into being at this point.

Front 9

Battle of the Forms

Back 9

Suppose Company A makes an offer in accordance with its standard form for sales (Form A), and that Company B purports to accept that offer by way of an acceptance on its standard form for purchases (Form B). Suppose that Forms A and B are incompatible. Has a contract been entered into, and if so what are its terms?

Front 10

Butler Machine Tool Co v Ex-Cell-O Corp [1979]

Back 10

Offered sale and delivery in ten months on its standard printed form, contained a price variation clause. Buyer placed an order on its standard form with no such clause.

Buyer’s form contained a tear-off slip, indicating acceptance of the buyer’s terms. Seller returned slip, with letter stating that the buyer’s offer had been accepted on terms initially set out by the seller regarding price and description.

COA held that on the particular facts, the contract had been concluded on the buyer’s terms. The buyer’s order was not itself an acceptance, since it contained different terms to the offer: Counter-offer. The return of the slip was held to constitute an acceptance of that counter-offer.The accompanying letter was disregarded, since it did not purport to qualify the acceptance, only reiterated the price and description of the goods.

Front 11

Chicester Joinery v John Mowlam (1987)

Back 11

Plaintiff a sub-contractor - Building project.

Sub-contract on the basis of the defendant’s standard terms; the plaintiff accepted subject - own standard terms. No contract existed, Acceptance amounted to a counter-offer. Plaintiff delivered the goods - accepted by the defendant. Acceptance of the counter-offer by conduct, contract concluded on the plaintiff’s terms.

Front 12

Communication of Acceptance

Back 12

1. General rule

2. Mode of communication stipulated by party making offer

3. Instantaneous means of communication

4. Silence as acceptance

5. Exceptions to the rule that acceptance must be communicated to the offeror – the postal rule/ unilateral contracts.

Front 13

General Rule

Back 13

The acceptance must also be communicated to the offeror.

Front 14

Tinn v Hoffman Co (1873)

Back 14

The offeree was told to “reply by return of post”.

The court held that a reply sent by some other equally speedy method would constitute a valid reply, unless the offeror had used clear words to the effect that reply should be by return of post and by return of post alone.

Front 15

Entores Ltd v Miles Far East Corporation [1955]

Back 15

Offer telexed by the plaintiffs in London to defendants in Amsterdam, acceptance telexed back. Where was the contract formed? COA -parties were effectively in the same position as if they had been in each other’s physical presence, or on the telephone. No reason for departing from the normal rule that acceptance became effective once received: and since receipt of acceptance took place in London, the contract was formed there.

Front 16

Brinkibon v Stahag Stahl undStahlwarenhandelsgesellschaft MBH[1983]

Back 16

The House of Lords has confirmed this rule, on substantially identical facts. [The House noted that this holding may need to be varied for other methods of communication such as fax machines and now e-mail.]

Front 17

Felthouse v Brindley (1862)

Back 17

The plaintiff wrote to nephew offering to buy his horse for £30 15s, and stating: “if I hear no more about him, I consider the horse mine at that price”.

No reply, but indicated to the defendant, an auctioneer who was going to sell his stock, that the horse was to be kept out of the sale. By mistake, the auctioneer sold the horse to a 3rd party and the Uncle sought to sue him.

The Court of Common Pleas held that no such contract had been concluded.

Front 18

Russell & Baird v Hoban [1922]

Ireland

Back 18

The plaintiff sent sale note to the defendant, by post, offering to sell oatmeal.

The note indicated that if there was no response within three days, this would be acceptance.

Ronan LJ: “No man can impose such conditions upon another.” Silence did not constitute consent under the circumstances.

Front 19

The Postal Rule

Back 19

Where the parties intend that the acceptance is to be communicated by post, the general rule that acceptance has to be communicated before a contract is concluded does not apply.

Front 20

Adams v Lindsell [1818]

Back 20

Defendants wrote offer 2 September. The letter required that acceptance should take place via post. Defendants misdirected the letter. Plaintiffs did not receive the letter until 5 September. Plaintiffs wrote acceptance that evening. The defendants received letter of acceptance on 9 September. The defendants believed reasonably expected to receive a reply by 7 September,sold the wool to a third party on 8 September. When was contract formed?

Held: When the letter was posted by the plaintiffs.

The court explained that if the defendants were not bound by their offer when accepted by the plaintiffs until the answer was received, then the plaintiffs should not be bound until after they had received notification that the defendants had received their answer and assented to it. The court stated that this back and forth could go on “adinfinitum”.

This would lead to commercial inefficiency. The postal rule circumvents that.

Front 21

Dooley v Egan [1938]

Back 21

Defendant, Cork, sent postcard to the plaintiff in Dublin to inquire whether the plaintiff could supply them with a medical cabinet.

By letter posted in Dublin, the plaintiff stated on 22 June that they could supply an enclosed list of goods at fixed prices, the quotation being for immediate acceptance only.

This was held to be an offer –it clearly stated that it was available “for immediate acceptance”.

The defendants replied on 24 June by a letter ordering two medical cabinets. This reply was not an acceptance – it was a counter offer.

The plaintiff replied 25 June and agreed to supply two medical cabinets.

Applying the postal rule, contract formed in Dublin on 25 June when the acceptance was posted.

Front 22

Kelly v Cruise Catering [1994]

Back 22

SC Challenge of Postal Rule

Working on a ship which was en route from Mexico to Texas. Contract of employment had been sent from Oslo to Dublin. Signed the contract in Dublin and returned it by post to Oslo. SC held, per Blayney J, that:

a) The postal rule is a “well settled rule”

b) Applying the postal rule, the contract became effective when it was signed and put in the post in Dublin.

Front 23

Exceptions to the Postal Rule

Back 23

1. Prescribed method of acceptance

2. Manifest inconvenience and absurdity

3. Public policy

4. Not applicable to letters of revocation

5. Unilateral Contracts

Front 24

Holwell v Hughes [1974]

Back 24

If the plaintiff wanted to exercise an option to buy a house owned by the defendant, have to be done “by notice in writing” within 6 months.

Before that time elapsed the plaintiff sent a letter, but the letter never arrived.

COA held that the words of the agreement indicated that the defendant was bound only when he received the letter. Consequently, the postal rule did not apply.

Front 25

Byrne v Van Tienhoven [1880]

Back 25

Letter from Cardiff offering goods for sale to the plaintiffs in New York.

Plaintiffs received offer and accepted it by telegram on the same day and by letter on 15 October.

On 8 October the defendants posted to the plaintiffs a letter withdrawing the offer.

This letter reached the plaintiffs on 20 October.· Lindley J held that the withdrawal was inoperative as a complete contract had come into being on 11 October when the plaintiffs accepted the offer of 1 October, which they had no reason to suppose was withdrawn.

The court endorsed the principle that an uncommunicated revocation is no revocation.