ACCEPTANCE

• acceptance definition

  • section 2(b) - refers to when someone clearly agrees to the exact terms of an offer, creating a binding agreement.
• what is a counter-offer?

  the offeree is making a new offer to the offeror
• what is the effects of counter-offer?

  • the original offer becomes automatically revoked
  • the offeree can no longer accept the original offer unless the offeror consents

  (case)

  hyde v wrench

  • the seller offered a property for £1000. The buyer first countered with £950, which legally rejected the original offer. When the buyer later tried to accept the original £1000 offer, the seller refused to proceed with the sale and then the seller sued him for breach of contract. the court held that no contract existed because the original offer was no longer valid due to the buyer's counter-offer.
• can silence be an acceptance?

  • no

  (case)

  felthouse v bindley

  • an uncle offered to buy his nephew's horse, stating he'd consider it sold if he heard nothing back. The nephew didn't reply, and the horse was later sold at auction. The court ruled there was no valid contract because silence cannot be considered acceptance.
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  what is postal rule?

  • The contract is considered complete as soon as the letter of acceptance is properly stamped and posted in the mail box, even if it gets lost in the mail or arrives late

  
  

  Section 4(2)(a) provides that the communication of acceptance is complete as against the proposer, when it is put in a course of transmission to him, so as to be out of the power of the acceptor
• case relevant to the postal rule?

  ignatius v bell

  The defendant gave an option to the plaintiff to purchase a piece of land on the condition that the option must be exercised on or before 20 August 1912 by a written notice. The plaintiff posted his acceptance on 16 August and it reached the defendant on 25 August. The court held that since both parties agreed to adopt the postal rule, section 4(2)(a) applies and a contract exists on 16 August when the acceptance was posted
• exception to the postal rule

  • The offeror may put in a condition that he will not be bound by the acceptance until he received the acceptance

  (case)

  Holwell Securities Ltd v Hughes

  The offeror stated that the acceptance must be in writing and delivered to him. The offeree posted the letter but it was lost in the post. The court decided that the Postal Rule did not apply as the offeror had already given the condition that there would be no binding contract until he received the physical letter
• if a person already sent his letter of acceptance, can he revoke it?

  • no

  (case)

  byrne v van tienhoven

  The defendant posted a letter on 1 October offering to sell to the plaintiff a quantity of tinplate, then posted another letter on 8 October withdrawing the offer. The first letter reached the plaintiff on 11 October and they accepted the offer at once by telegram, following with a confirmatory letter four days later. The second letter purporting to withdraw the offer arrived on 20 October, by which time the offer had been accepted and it was too late for the defendant to withdraw.