OFFER & ACCEPTANCE 2

• ACCEPTANCE An unqualified + unconditional expression of assent to the terms proposed by the offeror

  o   ‘expression of assent’ = acceptance must be communicated

  o   Objective Approach – if there’s no clear expression for the acceptance, that means that there is no meeting of minds objectively established

  o   ‘mirror image principle’ = assent has to be to the terms proposed by the offer = unqualified acceptance has to mirror the offer

  Unqualified: the expression of assent must not be qualified w/ any other conditions
• COMMUNICATION OF ACCEPTANCE

  The acceptance has to be brought to the attention of the offeror before it is valid
• COUNTEROFFER

  If there is a change from the terms offered (change in the price) = new offer kills off the original offer capable of acceptance or rejection

  Hyde v Wrench (1840)

  The court dismissed the claims + held that there was no binding contract for the farm between Mr Hyde and Mr Wrench. It was stated that when a counteroffer is made, this supersedes and destroys the original offer. This original offer is no longer available or on the table.
• Entores v Miles Far East Corporation [1995] 2 QB 327

  It was stated that the postal rule did not apply for instantaneous communications. Since Telex was a form of instant messaging, the normal postal rule of acceptance would not apply + instead, acceptance would be when the message by Telex was received. Thus, the contract was created in London. This general principle on acceptance was held to apply to all forms of instantaneous communication methods.
• Ignorance of offer


  A person who is ignorant of the offer, performs the acts required by the offeror is not entitled to sue as on contract
• Williams v Carwardine (1833)


  • The court decided that knowledge of the offer is important – in order to have a contract, the offeree should know about the offer – the offer must have been present in their mind when they did the act
• Gibbons v Proctor (1891)


  The general rule is that knowledge of an offer is required before it can be accepted but an exception was made in this case because the offer was of a unilateral contract
• R v Clarke (Australia 1927)


  • The High Court held that Clarke could not claim the reward because it was necessary to act in "reliance on" an offer in order to accept it, + therefore create a contract
• CROSS OFFERS

  An offer made to another in ignorance that the offeree has made the same offer to the offeror. In a cross-offer both parties state to each other the same proposal. There is no indication of acceptance but rather on the offers

  Tinn v Hoffman (1873) L.T. 271 The cross offers were made simultaneously + without knowledge of one another; this was not a contract that would bind the parties for the iron. In order to form a valid contract, there must be communication that consists of an offer + acceptance. There was no acceptance by post, as had been stated in the offer.
• PRESRCIBED MODE OF ACCEPTANCE

  Where the offeror prescribes a method of acceptance, the general rule is that the offeror is not bound unless the terms of the offer are complied with.
• Acceptance by silence


  Acceptance of an offer will not be implied from mere silence on the part of the offeree
• Felthouse v Bindley (1862)


  • There had not been an acceptance of the offer; silence did not amount to acceptance + an obligation cannot be imposed by another. Any acceptance of an offer must be communicated clearly.
• Exceptions to the rule of acceptance by silence


  • In some exceptional circumstances where the offeree indicates that an offer could be treated as accepted unless there is further communication means that the offeree is open to the idea that silence could be acceptance
• Re Selectmove (orbiter – does not constitute as binding precedent)


  • Lord Justice Gibson said "In some exceptional circumstances where the offeree indicates that an offer could be treated as accepted unless there is further communication means that the offeree is open to the idea that silence could be acceptance"
• ACCEPTANCE BY POST

  An exception to the general rule that acceptance must come to the attention of the offeror before it is valid.

  Adams v. Lindsell (1818)

  The court decided that acceptance by post takes effect when + where the letter of acceptance is posted. This applies where post is the agreed form of communication between the parties

   

  Henthorn v Fraser [1892]

  The court reiterated the Adams v Lindsell principle – a contract had been formed as soon as Mr Henthorn had posted the acceptance note - he hadn’t yet received the revocation; acceptance took place as soon as the letter was posted
• WHAT HAPPENS IF AN ACCEPTANCE LETTER IS SNET BUT THEN THE SAME OFFER IS REJECTED IN A LETTER BY FASTER MEANS?

  Postal rule applies in the UK = there is a contract = letter of acceptance was posted + acceptance takes place when posted

  The fact that a rejection of the offer is sent afterwards by faster means does not make any difference = the rejection letter sent after does not have any validity

  Postal Rule will NOT apply when it would result in absurdity. Only when reasonable to do so.
• REVOCATION BY OFFEROR

  The offeree must be made aware of the revocation but that does not necessarily have to be by the offeror, it could be a third party

  -       Must be revoked before acceptance takes place so long as the offeree has not provided consideration.

  Dickinson v Dodds (1876)

  It was held that notification by a third party of an offer's withdrawal is effective just like a withdrawal by the person who made an offer.

   

  Byrne v Van Tiehoven (1880)

  It was ruled that an offer is only revoked by direct communication with the offeree, + that the postal rule does not apply in revocation
• REJECTION OF OFFER

  An offer can be terminated by a counter-offer/rejection of the offeree

   
• OFFER CAN BE TERMINATED BY LAPSE OF TIME

  An offer lapses if it is not accepted within the stipulated time or when no time is stipulated, the offer will lapse after a reasonable time.

  Ramsgate Victoria Hotel Co v. Montefiore (1886)

  The court stated that it should be a reasonable time + what constitutes as a reasonable time for an offer to lapse would depend on the subject matter
• CONDITIONAL OFFER

  Offer can be terminated through failure of a condition subject to which the offer was made

   
• DEATH OF OFFEROR/OFFEREE

  Where the offeree accepts the offer unaware of the offeror’s death + the deceased’s contractual, obligations can be performed by his or her personal representative if it is not a contract for personal services. In contrast, an offer cannot be accepted if the offeree knows of the offeror’s death.
• The withdrawal was effective when the Telex message was received, not when the message was read
• Any withdrawal of an offer sent through a form of instantaneous communication, such as Telex, would be effective when it could have been read by the other party, not when it was actually read
• In this case, the defendant should have read this Telex message, but through their own actions, this did not happen
• BATTLE OF FORMS

  The situation which arises where one/both parties attempts to rely on their standard terms

  Butler Machine Tool Co v Ex-Cell O [1979]

  The court decided that this battle between the 2 parties is won by the party which put forth the latest terms + conditions that are not objected to by the other party.

   

  Tekdata Interconnections Ltd 2009

  It was held that the buyers were bound by the seller's terms/form because the sellers sent their own terms back + the buyers agreed to it. Thus, the 'last shot' approach was applied
• WHAT HAPPENS WHEN PERFORMACE IS UDNERWAY BUT NOT COMPLETED?

  Daulia Ltd. V Four Millbank Nominees Ltd. [1978]

  It was observed that there would be a duty to not prevent full performance of terms in a unilateral offer, once performance had begun = a unilateral contract did exist

   

  Luxor (Eastbourne) Ltd. V Cooper [1941]

  The HOL refused to imply an obligation + in that situation because that obligation or implying it in that situation was contrary to business practice + contrary to economic efficiency