What is acceptance?
Acceptance is a final and unconditional agreement to all the terms of the offer. Once an offer has been accepted, there is an agreement and the offer comes to an end.
How else can acceptance take place?
Acceptance can also take the form of conduct:
Brogden v Metropolitan Rail Co
B supplied the rail company (RC) with coal regularly but without a written contract. RC then decided to send B a written contract for the supply of coal. B altered some of the terms, signed and returned it to RC. They simply placed it in a drawer and continued to order coal. When a dispute arose, the contract was referred to.
Held: RC had made an offer to B, and by amending it B had made a counter-offer. When an order was placed this was acceptance by conduct.
When does acceptance take place?
Acceptance must be communicated to the offeror.
Entores v Miles Far East
A Dutch company accepted an offer by an English company, and the issue arose of where the contract was formed. It was held to have been formed in England, since that is where the acceptance was received by telex.
Held: The burden of communicating acceptance is with the offeree. Acceptance is effective as soon as it is received.
What is prescribed acceptance?
The offeror can specify a mandatory instruction that has to be followed by the offeree when accepting the offer. This is known as prescribed acceptance. With prescribed acceptance, the offeror states the offeree must accept in a certain format. However, other methods may be accepted if they do not disadvantage the offeror.
Yates v Pulleyn
The offeror requested that the acceptance be made using registered or recorded delivery.
Held: Accepting by normal delivery when recorded/special delivery was requested, made no practical difference whatsoever to the acceptance.
If no method of acceptance is prescribed, then the acceptance is expected to take the form of the offer – but any reasonable method of acceptance is acceptable.
What does ignorance of an offer mean?
If a person in a reward case knows of the reward and performs the conduct required to accept an offer, it is irrelevant if they do so for other reasons.
Williams v Carwardine
Details were supplied in response to a reward for information regarding a murder. The information was also given to ease the woman’s conscience.
Held: As she had given information knowing about the reward, she had validly accepted. Although there were also other reasons for her acceptance, she was still entitled to the reward.
What is the exception to being ignorant of an offer?
However, if there is no knowledge of the offer, there is no contract.
R v Clarke
D stated in court that he gave information to clear himself of charges and admitted he forgot about the reward at the time of providing the information.
Held: Forgetting about the reward was considered by the court to be the same as never having known of the reward. Therefore, he was not entitled to the reward.
What are the four ways of accepting an offer?
Acceptance by conduct
Acceptance by a positive act
Acceptance by post – the postal rules
Electronic and other forms of communication
What is acceptance by conduct?
The requirement for communication of acceptance can be waived, either expressly or impliedly.
One situation in which this occurs is in unilateral offer cases such as Carlill. Here just doing the conduct required is enough; there is no need to communicate acceptance.
In business situations, the job often proceeds before the contract is fully agreed, with numerous offers and counter-offers taking place.
Reveille v Anotech
Their conduct in performing their obligations under the contract was interpreted by the court as acceptance.
What is acceptance by positive act?
Acceptance cannot be by silence, there must be some positive act, e.g. an email sent by the offeree.
Felthouse v Bindley
Held: Silence was not an acceptance, as acceptance required positive conduct.
An example of acceptance by a positive act is Carlill v Carbolic Smokeball where a unilateral offer was accepted by the positive conduct of using the smokeball.
What is acceptance by post?
The postal rules only apply to letters of acceptance, not to offers or counter- offers. The postal rules state that an acceptance takes place at the moment the letter is posted. (Adams v Lindsell)
What are the postal rules?
The rules only apply if the post is the usual or expected method of communication between the parties.
E.g. if the offer was made by post, specifies acceptance by post or the previous course of dealings between the parties was by post, or is acceptance by post was reasonable.
However, post is not the usual or expected method if the offer was made in a more direct way (e.g. telephone) or the offeror is aware there may be some delay of the post e.g. strikes.
In Henthorn v Fraser the offer was made in person and the acceptance was made by post. The two parties worked in Liverpool, one lived in Birkenhead and the reply would have involved travelling on the ferry across the Mersey.
Held: Acceptance by post was reasonable, as long as it was within the contemplation of the parties that this method may be used.
The letter must be properly stamped and addressed - Re London & Northern Bank.
The offeree must be able to prove the letter of acceptance was posted (certificate of posting or signed statement by the person who posted).
Adams v Lindsell
On September 2nd, Lindsell wrote to Adams offering to sell some wool asking for a reply ‘in the course of post’. On September 5th Adams received the letter and sent a letter of acceptance. On September: 8th, Lindsell sold the wool to someone else. On September 9th, Lindsell received Adams’
acceptance letter.
Held: The offer for the sale of the wool had been accepted on September 5th when Adams posted his letter of acceptance and there was a contract.
Household Fire v Grant– the postal rule applies even if letter of acceptance is lost in the post/never arrives.
How may the postal rules be avoided?
An offeror may avoid the postal rule by making it a term of their offer that acceptance will only take effect when it is communicated to the offeror. An example is where the offeror asks for ‘notice in writing’ as he clearly expects notice in writing in front of him – Holwell v Hughes.
When does acceptance take place when using electronic forms of acceptance?
Except for the postal rules, the principal is that acceptance takes place when the offeror is aware of the acceptance.
What did Lord Denning say and what relevance does this have to electronic forms of acceptance?
In Entores v Miles Far East, Lord Denning stated: “If a man shouts an offer across a river but the reply is not heard because a plane is flying overhead, there is no contract. The offeree must wait and then shout back his acceptance so that the offeror can hear it.”
Therefore, acceptance by email, text etc. takes place when it was received rather than when it was sent.
What are the rules for electronic forms of acceptance?
If such an acceptance is sent by to a business and it arrives out of office hours, it will be effectively communicated when the business opens the next day - Brinkibon Ltd v Stahag Stahl.
The Brimnes confirms that it is the recipient’s responsibility to look for messages delivered during office hours.
Thomas v BPE Solicitors tells us that an email accepting an offer delivered at 6pm on a Friday was communicated as this was when the offeror’s solicitor could, and in all circumstances would reasonably be expected to have read it.
Messages sent outside office hours will be deemed to have been received at the start of the next working day following Mondial Shipping v Astarte Shipping Ltd.
When does acceptance take place when dealing with machines?
The owner of a machine holds it ready to make an offer. The person buying from the machine accepts by activating it. This is the point of no return.
Thornton v Shoe Lane Parking
An automatic machine which issued tickets outside a car park makes a standing offer that is accepted by the motorist driving so far into the car park that the machine issues him with a ticket.
What does The Consumer Contracts Regulations 2013 say regarding acceptance?
The Consumer Contracts Regulations 2013
Where electronic acceptance by email in consumer contracts is concerned:
- sellers must provide before agreement is reached a description of the goods or services, the price, additional charges and information about the seller;
- the buyer has an automatic right to cancel the transaction within 14 days.
Without this there will not be a binding contract following Pretty Pictures v Quixote Films Ltd.
What does The Electronic Commerce Regulations 2002 say regarding acceptance?
The Electronic Commerce Regulations 2002
These apply for contracts between businesses. Regulation 11 states that where a buyer is required to give consent through technological means (such as clicking on an icon) the contract is only completed when the buyer receives from the seller electronically an acknowledgment of receipt of the acceptance. Regulation 12 states that the display of items on the internet is an invitation to treat, and that the customer’s order may be the offer.
What does The Distance Selling Regulations 2000 say regarding acceptance?
The Distance Selling Regulations 2000
These apply to consumer contracts. The seller must give the buyer clear information about the goods; give written confirmation; and allow a cooling off period of 7 days to allow the buyer to change their mind.
What is a promotional campaign or a collateral contract?
Promotional Campaigns and Collateral Contracts
This is where a person buys goods and in return is promised a promotional gift.
Esso v Commissioners for Customs & Excise
Esso were giving away a free World Cup coin for every 4 gallons of petrol purchased. The courts had to decide whether the coins formed part of the contract for the sale of the petrol. If they did, Esso would be liable to pay tax for the coins. If they did not, motorists would not be able to insist
on a free coin.
The following principles emerged from the case:
a) Giving away promotional items forms a second/collateral contract. The petrol company makes a general offer to buy 4 gallons of petrol.
b) The collateral contract stands beside the main contract for petrol.
c) There is legal intent despite the trivial nature of the coin. Therefore there is a binding contract, which means that the customer is entitled to receive a coin.
d) Acceptance takes the form of the customer buying petrol.
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Offer24
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Acceptance20
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Consideration23
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Intention to Create Legal Relations10
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Express and Implied Terms18
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Sales of Goods and Services Act - Terms Implied by Statute in non-consumer contracts4
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Consumer Rights Act 2015 - Terms Implied by Statute in Consumer Contracts19
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Conditions, Warranties and Innominate Terms6
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Misrepresentations28
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Economic Duress10
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Performance8
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Frustration13
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Breach of Contract4
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Exclusion Clauses14
