definition of acceptance
“A final and unqualified expression of
assent to all the terms of an offer”
Acceptance is when someone agrees to an offer clearly and unconditionally, showing they want to be legally bound by it.
ramsgate victoria hotel co ltd v montefiore
Offer to purchase shares in Ramsgate Victoria
Hotel made in June, deposit paid. Ignored until
November, when it was accepted. Value of shares had significantly dropped.
Was the initial offer still valid and had it been
properly accepted by the offeree?
Court: No. An offer must be accepted within a
“reasonable time”, otherwise the offeror is no
longer bound by the offer. What “reasonable” is depends on the nature of the transaction.
kennedy v thomassen
The executors of a will wanted to replace an
annual annuity with a one-off payment. The
agreement was signed by the widow, but the
written assent was not communicated to the
executors until after the widow’s death.
Is the acceptance timely and effective, if the
document was not sent to the offeror?
Court: No. Acceptance needs to be communicated to the offerors to be effective.
immingham storage co ltd v clear plc
IS provided fuel storage facilities for C. IS sent C a quotation for a 12-month contract and the
standard terms. C signed a copy of the quotation.
IS sent C the contract, which was never signed.
Was the contract accepted by C?
Court: Yes. Quotations and general terms were accepted, and parties behaved as if a contract existed, up until C breached the contract and failed to pay.
joanne properties ltd v moneything capital ltd
JP borrowed money from MC. When JP fell into
arrears, JP’s assets were sold. £140k was available for distribution. The parties negotiated how to allocate the money, “subject to contract”. After a while, MC started distributing money.
Was MC entitled to distribute money on the basis of a binding agmt with JP?
Court: No. The phrase “subject to contract” means that no binding agmt has been reached between the parties.
felthouse v bindley
Uncle told to nephew: “If I don’t hear from you, I consider the horse mine for £30.15”. Nephew asked the auctioneer to withdraw the horse from the auction. The horse was sold.
Has the uncle’s offer been accepted?
Court: No. The nephew failed to communicate
acceptance to the uncle.
allied marine transport ltd v vale do rio doce navegacao
Parties were in a dispute, which had to be referred to arbitration. Each appointed one arbitrator, but no agreement on the 3rd arbitrator. After 5 years, AMT wrote to VRDN saying: “Either you appoint an arbitrator or we will”.
Is VRDN’s silence sufficient to infer that they
abandoned arbitration and accepted AMT’s offer to appoint a 3rd arbitrator?
Court: No. In the absence of special circumstances, silence and inactivity are not sufficient to infer the existence of a binding agreement.
in re selectmove ltd
A company owed the revenue sums. The
company’s director reached an agmt with the tax collector to pay in instalments. The tax collector agreed, and said he would contact the director if his superior said this was not acceptable.
Has a contract (to pay taxes by instalments)
become binding for the acceptor’s silence?
Court: No, but in principle it could have been possible
brogden v metropolitan railway co.
B signed a contract and sent it to MR Co., which
never signed it. B supplied coal as per the
contract. When disagreements arose, B denied
that there was any contract with MR Co.
Has MR Co. accepted a contract, when they never signed and sent it back to B?
Court: Yes. The objective conduct of the parties
established the existence of the contract.
adams v lindsell
L offered to sell wool to A and asked for a reply “in the course of post.” A received the offer, accepted it, and posted the letter. Before receiving it, L sold the wool to someone else. Was there a valid contract when A posted the letter of acceptance, even though L had not yet received it?
Court: Yes, there was a valid contract. When post is an agreed method of communication, acceptance is complete on posting the letter. (postal rule)
household fire and carriage accident insurance co ltd v grant
Mr Grant offered to buy shares in HF, HF accepted by post. The letter never reached Mr Grant. HF went bankrupt, and the liquidators tried to recover the outstanding payments on the shares from G.
Had the offer been properly accepted?
Court: Yes. The postal rule applies even if the letter never reaches the offeror. Anyone can opt out of the rule. Even if it sometimes causes hardship, it would cause even more hardship to not have the rule.
Manchester Diocesan Council for Education v Commercial & General Investments Ltd
The Manchester Diocesan Council (the seller) invited bids for some land.
Commercial and General (the buyer) made the highest bid, which was accepted.
The invitation said acceptance “shall be communicated to the successful tenderer at the address given.”
But instead of sending the acceptance to that exact address, the Council sent it to the buyer’s solicitor.
The buyer later tried to get out of the deal, arguing:
“You didn’t accept the offer in the exact way you said you would — so it doesn’t count.”
Court: The court said that if an offeror (here, the buyer) wants acceptance to be by one specific method only, they must clearly say so.
If they don’t make it mandatory, then acceptance can be communicated by any reasonable method.
Sending it to the solicitor was reasonable, so the contract was binding.
Entores Ltd v Miles Far East Corp
Entores Ltd (a UK company) sent an offer by telex (an early instant messaging system) to Miles Far East Corp (in Amsterdam).
Miles replied by telex, accepting the offer.
Later, there was a dispute, and Entores wanted to sue Miles in an English court.
But the legal issue was:
Where was the contract made England or Amsterdam?
Court:The contract was made in England where the acceptance was received.
The court said that when communication is instant a contract is formed when and where the acceptance is received.
hyde v wrench
W offered his farm to H for £1,000. H accepted,
but only offered £950. W declined the reduced
price. H then accepted the original offer.
Is W bound to sell the farm for £1,000?
Court: No. Any counter-offer results in the rejection of the original offer.
Stevenson, Jacques & Co. v McLean
ML offered to sell iron to SJ at 40s per ton, offer open until Monday. SJ sent a telegram asking about the delivery time. Before receiving a reply, ML sold the iron to someone else and sent a telegram revoking the offer. SJ then accepted the offer before receiving the revocation. Is there a valid contract between SJ and ML?
Court: Yes. The inquiry about delivery time was not a counter-offer but merely a request for information, which did not terminate the original offer. Since SJ accepted before receiving the revocation, a binding contract was formed.
Butler Machine Tool Co. Ltd v Ex-Cell-O Corp (England) Ltd
BM wanted to sell a machine for £75k with T&Cs including a price variation clause. ECO replied with an order with their own T&Cs. The order had a tear-off slip of acknowledgment on those terms. BM signed that slip. Could BM rely on the price variation clause?
Court: No. BM has signed the order made by ECO. That order was equivalent to a counter-offer. The order was made on ECO T&Cs.
