Acceptance (Contract Formation)

Question 1

What is acceptance?

Answer 1

• Unconditional agreement to all terms of that offer
• Acceptance must be a ‘mirror image’ of the offer

Question 2

Case for acceptance

Answer 2

Stevenson v McLean

Question 3

How do you accept an offer?

Answer 3

• Acceptance must be communicated to the offeror, the person making the offer has to know of the acceptance
• Silence is not acceptance
• Acceptance can be in any form, provided it is definite and communicated to the offeror

Question 4

Case for silence

Answer 4

Felthouse v Bindley

Question 5

Case for any form

Answer 5

Brogden v Metropolitan Railway

Question 6

Acceptance in a particular way

Answer 6

• If offeror asks for acceptance in a particular way, the acceptance must be by that method in order to be valid
• However that requirement can be waived if the method used did not disadvantage the offeror

Question 7

Case for acceptance in a particular way

Answer 7

Yates v Pulleyn

Question 8

Acceptance by post

Answer 8

• Acceptance takes place the moment the letter is posted (postal rule)
• Rule only applies if use of post is reasonable, the letter is properly stamped/addressed and the offeree can prove the letter was posted
• Only applies to letters of acceptance, not offers/ counter offers

Question 9

Case for acceptance by post

Answer 9

Adams v Lindsell

Question 10

Avoidance of the postal rule

Answer 10

By stating in the offer that there will be no contract unless the acceptance is actually received, in which case the contract is only complete on communication of the acceptance

Question 11

Case for avoiding the postal rule

Answer 11

Holwell Securities v Hughes

Question 12

Electronic methods of communication

Answer 12

• Phone/email, postal rule does not apply and these are treated as if they were made face-to-face so actual communication is needed
• Messages received outside working hours will take effect when the offeree can reasonably expect it to be communicated to the offeror (e.g next working day)

Question 13

Case for electronic methods of communication

Answer 13

Thomas v BPE Solicitors