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19 Cards in this Set

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Definition of 'acceptance'

An acceptance is a final and unqualified acceptance of the terms of an offer

Percy Trentham Ltd v Archital Luxfer Ltd (1993)

Rule of Law: To make a binding contract the acceptance must exactly match the offer and the offeree must accept all the terms of the offer




Case info: A sub-contract containing new terms was left unsigned, the plaintiff claimed for the new terms. However.. as the sub-contract was never signed officially it was invalid

Hyde v Wrench (1840)

Rule of Law: A counter-offer also amount to a rejection of the original offer that cannot then be subsequently accepted




Case info: The defendant offered to sell a farm to the claimant for £1,000. The claimant in reply offered £950 which the defendant refused. The claimant then sought to accept the original offer of £1,000. The defendant refused to sell to the claimant

Stevenson v McLean (1880)

Rule of Law: A counter offer should be distinguished from a mere request of information or a mere enquiry

Case info: The plaintiff asked the defendant whether they would accept a payment of forty over 2 months, or their longest limit. Before receiving a telegram of revocation, the iron merchant accepted the defendant’s offer

Butler Machine Tool v Excell-o-Corp (1979)

Rule of Law: 'Battle of the forms' - refers to clash of standard forms exchanged between a buyer and a seller during contract negotiations




Case info: An offer to sell the machine on terms provided by Butler was destroyed by the counter offer made by Ex-Cell-O

Communication of the acceptance

An acceptance must be communicated to the offeror. Until and unless the acceptance is so communicated, no contract comes into existance. The acceptance must be communicated by the offeree or an authorised third person. If someone accepts on behalf of the offeree, without authorisation, this is not a valid acceptance

Powell v Lee (1908)

Rule of Law: Acceptance must be communicated by the offeree of someone authorised by the offeree. If someone accepts on behalf on the offeree, without authorisation, this will not be a valid acceptance




Case info: An unauthorised employee told an applicant for a job he had been appointed, when in fact he had not

Felthouse v Bindley (1862)

Rule of Law: The offeror cannot impose a contract on the offeree against his wishes by deeming that his silence should amount to an acceptance




Case info: A nephew never communicated his acceptance of the uncle's offer to buy his horse and sold it at an auction

Communication Rule of Acceptance - Instantaneous Methods

Where an instantaneous method of communication is used, e.g. fax, telex, telephone (email does not have a case authority), the contract will be formed when and where the acceptance is received

Entores v Miles Far East Corp (1955)

Rule of Law: Where instantaneous methods of communication are used, a contract is formed when are where the acceptance is received




Case info: The plaintiff sent an offer by telex to purchase product from the defendant, which was not fulfilled even though the defendant sent an acceptance to the offer.

Brikibon v Stahag Stahl (1983)

Rule of Law: Where instantaneous methods of communication are used, a contract is formed when are where the acceptance is received




Case info: The plaintiff telexed their acceptance to an offer to purchase steel from the defendant. The defendant breached the contract but claimed they were not under the British jurisdiction

The Postal Rule

It is an exception to the Communication Rule for Acceptance and does not apply to instantaneous modes




Where acceptance by post has been requested or where it is an appropriate and reasonable means of communication between parties, then acceptance is complete as soon as the letter of acceptance is posted, even if it is delayed, destroyed or lost in the post

Brikibon v Stahag Stahl (1983)

Rule of Law: If the acceptance is received outside of normal office hours then acceptance is deemed to be the start of the next working day





Adams v Lindsell (1818)

Rule of Law: Postal Rule - A contract is formed as soon as the letter of acceptance is posted

Case info: The defendant sold the wool accepted by the plaintiff to a third party, as the plaintiff's letter of acceptance was delayed in the post

Householed Fire Insurance Co. v Grant (1879)

Rule of Law: Postal Rule - even if the letter does not arrive it is a binding acceptance once posted




Case info: The plaintiff sent a letter of acceptance to the defendant’s offer to purchase shares, which was never received. And so the defendant though he had not purchased any shares as a result

Circumstances where The Postal Rule does not apply

- The letter has not been properly posted


- The letter is not properly addressed


- Where post has not been the usual method of communication


- Where the express terms of the offer exclude the postal rule

Re London and Northern Bank (1900)

Rule of Law: Postal Rule does not apply as the letter has not been properly posted




Case info: A letter of acceptance was handed to a postman only authorised to deliver mail and not to collect it

Henthorn v Fraser (1892)

Rule of Law: Postal Rule does not apply where the post has not been the usual method of communication




Case info: An offer was sent by post requesting acceptance within 2 weeks, which was followed by a revocation, even though mail had not been the usual method of communication

Holwell Securities v Hughes (1974)

Rule of Law: Postal Rule does not apply where the express terms of the offer exclude the postal rule




Case info: The plaintiff’s lawyer sent a letter to the defendant revoking a sale of property, even though the defendant had already accepted the offer and paid a deposit 5 days before a six-month option expired.