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ACCEPTANCE
Sec
...


Def: 'A positive act by a person to whom an offer has been
made which, if unconditional, brings a binding contract
into effect
...


The contract comes into effect once the offeree has
accepted the terms presented to them
...


Acceptance is generally not effective
until communicated to the offeror,
except :

Acceptance may be expressed by words, by action or
inferred from conduct
...


Brogden v Metropolitan Railway Co 1877 - Facts: For
many years claimant supplied coal to defendant
...

is posted
The parties applied to their dealings the terms of the draft
agreement, but they never signed a final version
...
Held: The conduct of
the parties was only explicable on the assumption that they both agreed to the terms of the draft
...

Felthouse v Bindley 1862 - Facts: The claimant wrote to his nephew offering to buy the nephew's
horse, adding 'If I hear no more about him, I consider the horse mine'
...
The nephew instructed the defendant, an auctioneer, not to sell the
horse
...
The uncle sued the
auctioneer
...
The claimant had no title to the horse
...

Neither party is bound until the formal contract is signed
...

Branca v Cobarro 1947 - Facts: A vendor agreed to sell a mushroom farm under a contract which
was declared to be 'a provisional agreement until a fully legalised agreement is signed'
...


Acceptance of A Tender
There are two distinct types of tender:
1
...

2
...
It’s a standing offer
...

Until orders are placed there’s no contract &
tenderer can terminate his standing offer
...
In his tender he undertook
'to supply
...
After making
some deliveries he refused to fulfil an order
which the claimant had given
...


Counter Offers & Request for Information
A counter-offer does not constitute acceptance; It is the making of a new offer which may in turn be
accepted or rejected
...


A Refusal or Counter Offer
Counter-offer is a rejection of the original offer
...
Plaintiff made a
counter –offer for £950, which defendant rejected
...
Held:
there is no contract because the original offer has be rejected
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Their quotation included details of their standard terms
...
The claimant acknowledged acceptance by returning a
tear-off slip from the order form
...
The
claimant had accepted this by returning the tear-off slip
...
Such a request may be a
request as to whether or not other terms would be acceptable – it is not a counter-offer
...
The claimant enquired whether he would agree to delivery ad over two months
...

Meanwhile the defendant had sold the iron to a third party
...


Communication of Acceptance
Sec
...

As against the acceptor, when it comes to the
knowledge of the proposer
...
But this rule doesn’t
apply in all cases
...

Without authorisation, he was informed
of the appointment by one of the
managers
...
The claimant
sued for breach of contract
...


1
...
Such a waiver may be express
or may be inferred from the circumstances
...
This was an example of a unilateral contract, where
the offer takes the form of a promise to pay money in return for an act
...
Prescribed Mode of Communication
Offeror may call for communication of acceptance by specified means
...

This would probably apply also to acceptance by fax machine or e-mail
...

Yates Building Co v R J Pulleyn & Sons (York) 1975 - Facts: The offer called for acceptance by
registered or recorded delivery letter
...

Held: Offeror had suffered no disadvantage and had not stipulated that acceptance must be made in
this way only
...

3
...

Entores v Miles Far Eastern Corporation 1955 - Facts: Claimants sent an offer by telex to
defendants' agent in Amsterdam & the latter sent an acceptance by telex
...
Held: Acceptance took effect (& the contract was made) when the
telex message was printed out on the claimants' terminal in London
...


4
...

The postal rule states that, where the
use of the post is within the
contemplation of both the parties, the
acceptance is complete and effective as
soon as a letter is posted, even though it
may be delayed or even lost altogether
in the post
...
It reached the
claimants on 5 September; they immediately posted a
letter of acceptance, which reached the defendants on 9
September
...

The intention to use the post for communication of
acceptance may be deduced from circumstances

Household Fire and Carriage Accident Insurance Co v Grant 1879 - Facts: The defendant handed a
letter of application for shares to the claimant company's agent in Swansea for posting to the
company in London
...
Defendant was called
upon to pay the amount outstanding on his shares
...
The contract had
been formed when the acceptance was posted, regardless of the fact that it was lost
...
If that possibility is clearly inconsistent with
nature of the transaction the letter of acceptance takes effect only when received
...

Holwell Securities v Hughes 1974 - Facts: Hughes granted to the claimant an option to purchase land
to be exercised 'by notice in writing'
...
Held: The words 'notice in writing' must mean notice actually received by the vendor; hence
notice had not been given to accept the offer
...
Acceptance Made Only be Made by Person Authorised to Do So
...

Powell v Lee 1908 - Facts: The claimant was appointed to a post as a headmaster
...
Later, it was decided to
give the post to someone else
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Held: Since communication
of acceptance was unauthorised, there was no valid agreement and hence no contract
...
Cross-offers
If two offers, identical in terms, cross in the post, there is no contract: Tinn v Hoffmann 1873
...


7
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If A offers a reward to anyone who
finds & returns his lost property & B, in
ignorance of the offer, does in fact return
it to him, is B entitled to the promised
reward? There is agreement by conduct,
but B is not accepting A's offer since he
is unaware of it
...
If the information was provided by an
accomplice, he would receive a free pardon
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Held: There could not be acceptance without
knowledge of the offer
...


Williams v Carwardine 1833 - Facts: A reward was
offered to bring criminals to book
...
Held: As the
information was given with knowledge, the acceptance was related to the offer
...
Collateral Contracts
Def: a contract where consideration is
provided by making of another
contract
...
There’s a contract
b/w B & C despite the absence of direct
communication b/w them
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Claimants in their contract with X for
the repainting of the pier specified that X should use
this paint
...

Claimants sued the defendants for breach of
undertaking
...
Held:
The contract b/w claimants and X requiring the use of
the defendant's paint was the consideration for a
contract b/w claimants & defendant
...

Not accepted in New Zealand case: Wenkeim v Arndt (1873) nor in South African case of A to Z
Bazaars (Pty) v Ministry of Agriculture (1974)
Cheshire argues that it would be unfair to offeror who would be bound as soon as the letter was
posted, but would allow the offeree to keep his options open
...

Treitel sees no reason why a rule setting out the relationship between revocation and acceptance and
what happens when a letter is lost in a post should also govern cancellation of an acceptance by post
...


Communication by Instantaneous / Electronic Means
Acceptance takes place when and where the message is received
...

House of Lords in Entores: accepted that communication by telex may not always be instantaneous
eg
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Lord Wilberforce: “No universal rule could cover all such cases, must be resolved by reference to the
intention of the parties, by sound business practice and by a judgment of where the risk should lie
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Generally accepted such rules applicable to faxes and telex
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Argued: presence of answering machine-indicates communication not instant
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Offeror-set the machine- any risk lie with him, thus postal rule apply
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Suggested: until matter settled by courts, acceptance must be communicated

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