Chapter 4: Acceptance

Question 1

What is the definition of acceptance?

Answer 1

A (1) final and unqualified expression of assent to all terms of a contract that has to be (2) communicated to the offeror

Question 2

What are the 2 methods of acceptance

Answer 2

By words

By conduct

Question 3

What happens when a particular method is stipulated to acceptance

Answer 3

The offeree as to utilise the same method of acceptance that has been used by the offeror

If method of accptance is not specified, then the offeror is open able to use any method of acceptance to communicate to the offeror (even if it is more advantageous compared to the offer)

Question 4

What are the 2 elements of acceptance

Answer 4

Mirror image rule

Acceptance must be communicated to the offeror

Question 5

What is the mirror image rule

Answer 5

The final and unqualified assent to all terms of the offer

The acceptance must be the exact same as the terms that have been discussed in the offer

Question 6

What are counter offers and what is the general distinction

1 case

Answer 6

Counter offers must be clear and unambiguous

Counter offers are when the offeree ‘kills off’ the original offer my introducing a new term

Hyde v Wrench

Question 7

What is the case that states the GR for mere inquiries?

Answer 7

A mere inquiry does not kill off the original offer as it is just asking for more information. Merely posponing his decision until he gets more information

Stevenson v McLean

Must pay attention to wording, could be CO or inquiry

Question 8

What are cross offers

Answer 8

When two parties are arguing back and forth about the same offer

Question 9

What are the battle of the forms

Answer 9

When there is so many terms that keep being added, and the person that signs/accepts first is called the ‘last shot’ rule

Must read many times before accepting to terms

Question 10

Powell v Lee

GR - acceptance must be communicated to the offeror

Answer 10

Facts: Managers of the school passed a resolution to appoint the plaintiff who applied for the post position for headmaster. But the decision they came to was not communicated to the plaintiff

Held: passing of resolution without communication to plaintiff doesn’t constitute a contract appointed

Question 11

Brodgen v Metropolitan Railway

Answer 11

Lord Blackburn held: acceptance in your own mind without any intimation to the other party expressed by a mere private act (i.e. putting letter in a drawer, receiving mail but not reading) does not complete an act

But both parties have allowed it then it would be binding

Question 12

Entores v Miles Far East Corp (1995) Lord Denning

IMPORTANT

Answer 12

Principle

• Acceptance must be brought to the offeror’s attention

Scenario:

• If the line goes dead when bypassing a tunnel, and the offeror does not hear the acceptance on their side. It is the duty of the offeree to call back to repeat the acceptance

Scenario 2:

• If the acceptance was clear and the offeror didn’t hear properly, but didn’t call back to confirm, then the contract is binding

Question 13

What type of offers don’t need to be communicated to the offeror

Answer 13

unilateral contracts

Question 14

What case provides the general rule of silence as a form of acceptance

Answer 14

Silence is not recognised as acceptance, and the offeror cannot impose it on the offeree that they regard that as acceptance

As the law protects the offeree by avoiding imposition of unwanted contractual obligations

• Felthouse v Bindley (1862)

Question 15

Felthouse v Bindley

Answer 15

Facts: Nephew owned a horse that the uncle wanted to buy. Uncle imposed silence as a form of acceptance, nephew didn’t reply and told D to not sell the horse. D sold the horse

Held: Silence did not amount to acceptance

Question 16

Re Selectmove

Answer 16

Facts: S owed Inland Revenue large sums of income tax and national insurance. S payed two payments under alleged agreement. S heard nothing more from the Revenue until october 9th, they demanded arrears of 24,650

Gibson LJ Held: Acceptance cannot be inferred from silence, where an offeror imposed the term as acceptance.

Although if the offeree himself indicates that it is acceptable if not sound by an ascertainable time, then it would amount to agreement

Question 17

What is the exception to the general rule of silence as a form of acceptance

1 case

Answer 17

The general rule may not apply where the offeree assumes that his silence has been effective to conclude a contract and then acts in reliance upon that belief. Some positive action is required on the part of the offeree as evidence that he has in fact accepted the offer

Where both parties specify that silence amounts to acceptance, which there must be a patent of dealings

Re Selectmove

Question 18

What is the GR in acceptance in ignorance of an offer?

1 case

Answer 18

R v Clarke - Reward made public by the Government of Western Australia for information leading to arrest and convicted persons

• C gave info that helped them get arrested. But when the accepted the offer, it didn’t cross his mind
• Held: Unless the performer conducted the act with the faith or reliance upon the offer, there would be no offer. No contract

Generally rule - said that it is not binding

Question 19

What are the exceptions to the general rule of ingorance of an offer

2 cases

Answer 19

Exception, although not knowing they completed the act, and law says why not treat a good samaritan. As the participant still completed all the stipulated acts in the offer

• Gibbons v Proctor
• William v Cowardine

Question 20

What are the 2 types of communication

Answer 20

Instantaneous

Non-Instantaneous

Question 21

What are the 5 types of instantaneous and 2 non-instantaneous types of communication

Answer 21

Instantaneous
* Face to face
* Telephone
* Telex
* Fax
* Email

Non-Instantaneous
* Letters
* telegram

Question 22

What is the general rule for instantaneous communications - case?

Answer 22

acceptance must be communicated to the offeror. And the contract is only concluded when the offeror received the acceptance

• Entores v miles Far East Corp, Lord Denning

Question 23

Brinkibon v Stahag Stahl

telex

Answer 23

Lord Wilberforce held although telex is considered instantaneous, it is must be noted that telex machines are merely conduct pipes which infro is channelled

Message may not reach the principle immediately

Question 24

What are the 2 approaches to emails

Answer 24

Postal Rule

Receipt Rule

Question 25

What is the discretionary note of communication via email

Answer 25

It is considered an "almost instantaneous communications". Reason being as technology is invovled, there are unavoidable problems that come with it

Question 26

What are exceptions to the rule of communication of acceptance

Answer 26

* Offeror **waived** the requirement of communication * Unilateral offers * Postal Rule (non-instantaneous communications)

Question 27

What are the 2 cases supporting the GR of Postal Rule?

Answer 27

**Adam v Lindsell** **Household Fire Insurance v Grant**

Question 28

Adam v Lindsell | postal rule

Answer 28

Facts 1. Letter offered to sell B goods if he received an answer by return of post. 2. The offer notifying the **acceptance arrived 2 days late** that it was supposed to, offeror already sold goods Held * **Binding contract, moment he accepted**. Principle * B was entitled to recover against A in action for not completing the agreement

Question 29

What are 2 requirements for both parties to use post as a method of communication? | What are the relevant cases?

Answer 29

1. Use of post was reasonably **contemplated** by both parties - **Household Fire Insurance v Grant** 2. Post is the **only reasonable** form of communication (**Henthorne v Frazer**)

Question 30

What would be the 4 reasons why the postal rule would not work?

Answer 30

* Not reasonable to post, where the use of post will lead to manifest **inconvenience** or **absurdity** * **Not reasonably** contemplated by parties * Offeror **did not intend** for postal rule to apply or the terms of the offer expressly excude the applcation of postal rule * **incorreclty addressed**

Question 31

What happens if acceptance is lost in post, what are the 2 cases that touch on this matter

Answer 31

**Household fire Insurance v Grant** * acceptance is effective the moment it is posted **Brogden v Metropolitan Railway** * if an offeror sends through postal and says if agreed send back the answer through post, then as soon as they letter is posted (acceptance), the contract is conluded

Question 32

What are the 3 practical difficulties of postal rule

Answer 32

* contract **formed without the offeror knowing** (the delay in between receiving, the other party does not know the decision yet) * letter is **lost in post** * **revocation** of acceptance/retraction of the acceptance through a quicker or speedier means

Question 33

What are the 3 exceptions to acceptance even withuot communication?

Answer 33

1. Waiver 2. Unilateral offers (promise for an act) 3. Postal rule

Question 34

What are the 5 scenarios where postal rule may/may not apply? ## Footnote exception to acceptance must be communicated

Answer 34

* Postal rule only applies to **acceptance** * Postal rule only applies to **Non-instantaneuos communications** * Postal Rule can be **excluded** * Postal Rule **does not apply to making offers** (Bryne v Van Tien Hoven) * Postal Rule **does not apply to revoking of offers** (Bryne v Van Tien Hoven)

Question 35

What is the scenario analysis **Lord Denning** gave for instantaneous communications: f2f, telephone, and telex

Answer 35

Face to face * If offeror shouts across the road to offeree and doesn't hear it then there is no contract telephone * If during conversation line goes dead, and the offeror didn't hear the acceptance. No contract * If can't hear (indistinct), then need to ask him to repeat, or no contract Telex * line goes dead in middle of sentence acceptance. No contract

Question 36

What is the assumption if offeree believes their acceptance went through

Answer 36

* if acceptance occured but the listener did not catch what they said, it is their **duty** to ask them to **repeat**. Then it there is a binding contract

Question 37

What are the 6 methods of **termination of an offer**?

Answer 37

1. Offer **rejected** by offeree 2. **Counter Offer** 3. Lapse of **Time** 4. Offer subject to condition/**event** 5. **Death** of offeror 6. **Revocation**/withdrawal

Question 38

What is offer subject to a condition/event? What is the case?

Answer 38

Offer comes to an end when or the condition (stated in contract) happens (**Financing Ltd v Stimson**)

Question 39

What are the cases that state the GR and Exception to 'death of offeror'?

Answer 39

General Rule * **Dickinson v Dodds** - (obiter) death of either party terminates the offer Exception * **Badguran v Morgan** - the estate (personal representatives) of the deceased could **still be liable** to honour the offer * Can’t accept if aware that offeror is dead

Question 40

What are the 2 requirements to **revoke/withdraw** an offer?

Answer 40

1. Anytime **before** acceptance (unilateral offer) 2. Revocation of the offer has to be **communicated** to the offeree

Question 41

Can revocation be made by a third party? | case

Answer 41

**Dickinson v Dodds [1876]** * Revocation can be made by a reliable third party

Question 42

What is the GR of revoking a unilateral offer? What are 2 cases that show this?

Answer 42

Not fair to revoke an offer when the offeree has **embarked** on the performance Case * **Errington v Errington** * **Daulia v Four MillBank Nominees [1978]**

Question 43

What case provides the exception to GR of revocation of unilateral offer?

Answer 43

**Luxor v Cooper [1941]** * If consideration is large amount, then reasonable to revoke/withdraw

Question 44

**Errington v Errington**

Answer 44

Facts 1. Father told son and daughter he would offer the house to them provided they pay monthly mortgage, both accepted the offer. 2. Father died and the PR of his estate sough to evict them Held 1. Father’s promise was a unilateral offer, which **can’t be revoked once the couple had embarked upon the performance** provide they did not leave the performance “incomplete or unperformed”. 2. **Can’t revoke** unless offeree abandons the performance Note * **Offeror** must have **knowledge** that the offeree has embarked/started the act of acceptance

Question 45

**Daulia v Four MillBank Nominees [1978]**

Answer 45

Facts 1. Offeror wasn’t fair to the offerees, **needed his signature** to complete acceptance 2. Offeror got a better deal 3. Didn't allow the offerees to sign Obiter (Goff LJ) * Offer can’t be **unfair** or **impossible to complete**

Question 46

What case states 'revocation must be communicated to the offeree' in a unilateral contract? ## Footnote IMPORTANT

Answer 46

**Shuey v US** 1. Offeror must take **reasonable steps** to communicate revocation 2. Revocation has to communicated the **same way** the offer was made or a **more effective way** (can’t expect people to see the notice if not the same method)