Flashcards in O&A - Acceptance Deck (38)
What is acceptance?
The final and unqualified agreement to all the terms contained in the offer.
What formal characteristics must effective acceptance satisfy?
Acceptance must be clear and unequivocal.
How may acceptance be determined?
On the basis of a written document or inferred objectively from conduct, signature or observance of written terms.
What is the potential added complication with oral acceptance over written acceptance? (1)
While both are valid acceptances, oral acceptance may involve increased evidential burdens
Authority - 'He who alleges must prove whether the allegation is negative or positive' - Joseph Constantine SS Line Case
What are the three key functions of written acceptances/contracts that counter-balance there inherently more onerous nature?
1. Evidential Function
2. Cautionary Function
3. Channelling Function
Which particular types of contract need to be written?
1. Those that are required to be written under legislation
2. Those that are unenforceable unless evidenced in writing
Can silence bind a party? (1)
No - silence shall not be deemed to be consent/acceptance
Authority - Felthouse v Bindley
What are the 3 key components for effective acceptance (2 central ones and 1 peripheral one)?
1. The response must correspond exactly to the terms of the offer - mirror-image rule
2. The acceptance must have been effectively communicated to the offeror (following any prescribed means)
3. The acceptance must be made in response to and with knowledge of the offer (peripheral)
What is the mirror-image rule?
Acceptance must be unconditional and correspond exactly with the terms proposed by the offeror.
What occurs when an offeree fails to comply with the mirror-image rule and alters the terms of an offer or introduces new ones when trying to accept? (1)
Rather than accepting the offer, the offeree has made a counter-offer
Authority - Hyde v Wrench
What impact does a request for further information have? (1)
A request for further information with no variation of the existing terms doesn't constitute acceptance but rather a request for information
Authority - Stevenson v McLean
What is the difference between a counter-offer and a request for further information?
A request for further information does not 'kill' the original offer as a counter-offer does and cannot subsequently itself be accepted.
How can acceptance of counter-offers be done? (2)
1. Explicit agreement to the new terms and conditions
Authority - Butler Machine Tool Co Ltd v Ex-Cell-O Corp Ltd
2. Through conduct
Authority - Brogden v Metropolitan Railway Co
Does acceptance need to be communicated to the offeror? (1)
Generally yes, acceptance is not normally complete unless/until it is communicated to the offeror
Authority - Entores Ltd v Miles Far East Corporation
What are the two exceptions to the general rule of communication of acceptance laid down in Entores?
1. There is a waiver of communication and/or promise for an act (in the case of unilateral contracts)
2. Application of the postal rule (acceptance occurs before actual communication is made)
Can an offeror prescribe a particular method by which acceptance is to be communicated?
Yes, this can be done explicitly or through inference.
Are mandatory prescribed methods of acceptance binding upon the offeree?
Where there is a mandatory method prescribed it must be complied with to constitute effective acceptance.
How may an offeror establish a mandatory prescribed method of communication of acceptance?
To establish a mandatory prescribed method of acceptance it must be made clear by the offeror that no other means of acceptance is acceptable.
What happens where an offeror chooses not to stipulate a particular mode of acceptance?
In such cases whether the acceptance is effective or not is judged depending on the nature of the offer and the broader circumstances.
What happens where an offeror prescribes a method of acceptance but fails to make it mandatory?
If there is a non-mandatory prescribed method of acceptance, any other method will suffice provided it is no less advantageous to the offeror.
What factors should be considered when determining whether the acceptance used was no less advantageous than the non-mandatory means prescribed? (2)
1. What was the purpose of the originally prescribed means?
2. Who was the originally prescribed means designed to benefit?
The offeree has the ability to waive acceptance stipulations designed to benefit himself
Authority - Yates Building Co Ltd v Pulleyn & Sons Ltd
3. Was the actual acceptance no less advantageous in fulfilling the purpose of the originally prescribed method?
Authority - Manchester Diocesan Council fo Education v Commercial & General Investments Ltd
What are the two key rules governing the effective acceptance of offers?
1. Receipt Rule
2. Postal Rule
What is the receipt rule?
This rule applies only to instantaneous forms of communication and holds that acceptance takes effect only upon it being received.
What is the postal rule?
This rule applies to non-instantaneous forms of communication and holds that acceptance takes effect once it has been dispatched.
When there are issues with communication involving instantaneous communication methods what are the three key approaches outlined in the Entores case?
1. Communicator Fault
2. Recipient Fault
3. No Fault
What is the concept of communicator fault?
Where the offeree seeking to communicate acceptance knows the message hasn't been communicated, they must repeat it to ensure it is.
What is the concept of recipient fault?
Where the offeror is aware a message has been attempted to have been sent to him but he hasn't received it and the offeree mistakenly believes the message to have been communicated, the recipient must ask for the message to be repeated.
What is the concept of no fault?
Where a message is believed to have been sent by the offeree but hasn't been and thee offeror is unaware of this, there has been no effective communication of acceptance.
When the recipient is a business when can actual communication be said to have occurred? (1)
Communication of acceptance (to a business) within office hours will constitute actual communication as the communicator has done all he can and failure to monitor his own machines is the fault of the recipient
Authority - Tenax Steamship Case