Download In general silence or inaction cannot be an acceptance as some

ACCEPTANCE
Acceptance
The final expression of agreement to the terms of an offer
Once an offer is accepted there is a contract between the person making the
offer and the person accepting it, provided the other essentials of a contract
are present.
The acceptance has to be positive and unqualified.
In other words it is responding to the offer by saying ‘YES' and not ‘Yes, but'
or ‘Yes, if'.
ACCEPTANCE CAN BE BY :
 WORDS - can be said or written
 CONDUCT - In general silence or inaction cannot be an acceptance as
some positive act is needed. Positive conduct can be acceptance
where that is a method of communication set out in the offer. This
can be implied in the offer, for example, starting to use goods sent
on approval; see CARLILL V CARBOLIC SMOKE BALL CO.
Acceptance must usually be communicated to the person making
the offer. This is the most crucial aspect of acceptance as that
communication establishes if and when the contract comes into
existence.
METHODS OF COMMUNICATION OF ACCEPTANCE
The usual methods of acceptance do not present any problems. A verbal
statement that is clearly heard and understood fulfils the requirements.
There are potential difficulties where acceptance is by conduct, by post or by
electronic methods
1) CONDUCT
In general silence or inaction cannot be an acceptance as some
positive act is needed. An example of this is seen in the case of:
FELTHOUSE V BINDLEY (1862)
FACTS: Here the sale of a horse was being negotiated by letter and message.
Eventually Felthouse wrote to Bindley saying that if he heard nothing further
about the sale of Bindley’s horse he would consider the horse sold to him for a
stated price - £30
HELD: The court decided that Felthouse was just making an offer that the
seller (Bindley) could accept or reject and silence was not an acceptance, as
acceptance required positive conduct
Today this is reflected in legislation in the Consumer Protection (Distance
Selling) Regulations 2000.
This legislation means that someone who receives goods they did not request
does not have to pay for them and may be able to keep them if the sender of
the goods does not collect them or provide a mechanism for the cost-free
return of the goods.
In other words, just retaining the goods does not amount to an acceptance
of any offer to sell the goods.
POSITIVE CONDUCT CAN BE ACCEPTANCE
This is where that is the method of communication set out in the offer.
This can be implied in the offer, for example, starting to use goods sent on
approval.
It can be seen in the case of which was a UNILATERAL OFFER :
CARLILL V CARBOLIC SMOKE BALL CO. (1892),
FACTS: *See offer handout*
HELD: The advertisement was an offer which Mrs Carlill had accepted by the
purchase & use of the smoke ball was sufficient to accept the offer of the
reward as the company clearly did not expect individual users to contact the
company.
2) COMMUNICATION OF ACCEPTANCE BY POST: THE POSTAL RULES
There is a risk that a letter may go missing so the court had to decide where
the loss should fall.
The following rules were set out:
 The postal rules only apply to LETTERS OF ACCEPTANCE, not to offers,
revocation of offers or counter- offers.
 The postal rules only apply if the post is the usual method of
communication between the parties involved in the contract or is
specifically stated as the only or an accepted method of communication
of acceptance.
 Acceptance takes place when a correctly stamped and addressed letter is
posted (the principle is based on the fact that once a letter is posted it
cannot be got back).
 The claimant must be able to prove the letter was posted. This is
reflected in a certificate of posting from a post office or a signed
statement by the person putting the letter in the letter box.
The postal rules state that a letter of acceptance takes effect at the
moment of posting.
These rules were first clarified in the case of ADAMS V LINDSELL (1818).
ADAMS V LINDSELL (1818)
 2 September: Lindsell wrote to Adams offering to sell some wool asking for a
reply ‘in the course of post’.
 5 September: Adams received the letter and sent a letter of acceptance.
 8 September: Lindsell sold the wool to someone else.
 9 September: Lindsell received Adams' acceptance letter.
The court set out the postal rules and decided that the offer for the sale of
the wool had been accepted by ADAM’s on 5 September when ADAM’s
posted his letter of acceptance and there was a contract.
HOUSEHOLD FIRE INSURANCE V GRANT
FACTS: G made a written offer to purchase shares. Notification of acceptance
was posted but was never received. When the company went into liquidation,
Grant claimed that he was not a shareholder & should not be liable for the
values of his shares.
Was there a contract between G & HOUSEHOLD FIRE INSURANCE?
HELD:
Applying the postal rule would the widow be paid out in the following
scenario:
The deceased posted a letter accepting life insurance on the way to run a
marathon unfortunately he died while running the marathon. The deceased’s
widow (the claimant) was trying to claim the life insurance.
Can she claim the life insurance???
3. ELECTRONIC AND INSTANTANEOUS FORMS OF COMMUNICATION
The postal rules had to be reconsidered in the light of electronic
communication.
It is accepted that telephone is instant verbal communication, just as though
the parties were in each other's presence.
If the call was not heard because of a fault it appears there would be no
communication of acceptance.
The first case on this was:
ENTORES V MILES FAR EAST CORPORATION (1955).
In this case the question was when a telex machine communication was made.
THE COURT DECIDED THAT THE ACCEPTANCE BY TELEX TOOK PLACE
WHEN IT WAS RECEIVED RATHER THAN WHEN IT WAS SENT.
THEREFORE IT IS NOT THE SAME AS THE POST
Although the use of telex has now been replaced by more modern methods of
communication, the same principles will apply to acceptance of modern methods
such as e mail, texting or faxing:
I,e
The acceptance is communicated when it arrives, but if the
communication is a business & it arrives out of office hours, it
will be communicated at the start of the next working day
THE ELECTRONIC COMMERCE (EC DIRECTIVE) REGULATIONS 2002
REGULATION 11 covers all contracts made with internet companies. It
states that an order and the acknowledgement of receipt of it (these can be
taken to be the offer and acceptance) are deemed to be received when the
person to whom they are addressed are able to access them.
POSSIBLE QUESTIONS
May 2013 Q14
Briefly explain the law on acceptance by conduct & acceptance by post
Jan 2011 Q16
Explain the law on acceptance by conduct & acceptance by post
May 2012 Q13
Explain the rules that apply to the ways in which an offer can be accepted
.
The scenario:
On 29 April, Richard placed an advertisement in the local paper offering his
car for sale for £17,000.
Jennifer telephoned Richard on 1 May and offered to buy the car for £15,000.
Richard said he was not prepared to accept such a low price, but kept
Jennifer's details.
On 8 May Richard had still not sold his car and wrote to Jennifer offering to
sell it to her for £16,000. Jennifer received the letter on 9 May.
On 10 May, Jennifer wrote back stating that she would not pay more than
£15,500 for the car.
On 11 May Jennifer wrote another letter to Richard saying that she accepted
his offer and would pay £16,000 for the car.
Richard received both of Jennifer’s letters on 12 May but refused to give the
car to Jennifer as he had found another buyer who would pay him £16,500.
The approach:
29 April- advertisement (£17,000) - invitation to treat - PARTRIDGE V
CRITTENDEN.
1 May - offer (£15,000) - Jennifer to Richard - Richard can accept or reject it,
he rejects it instantly on the telephone ending Jennifer’s offer.
8 May - offer (£16,000) Richard to Jennifer - offer open when Jennifer
receives the letter (9 May).
10 May - rejection of offer in the letter from Jennifer to Richard by counteroffer (HYDE V WRENCH) - rejection takes place when this letter is received
by Richard (12 May).
11 May - acceptance of offer in the letter from Jennifer to Richard acceptance takes place when put in the post box as the postal rules apply (post
is usual mode of communication, evidence of posting and correct address, etc. as
letter arrived the next day (12 May)) - ADAMS V LINDSELL.
Contract therefore made as acceptance takes place whilst the offer is still open
(it is open till 12 May). If Richard does not sell the car to Jennifer he will be in
breach of contract.
Conclusion
Acceptance is agreeing to the terms of the offer and requires understanding of
when the acceptance takes place as the consequences are a legally binding
contract. One consequence might be the need to insure the item bought from
that moment as it then belongs to the buyer.
Activities
Here are the facts of:
BYRNE V VAN TIENHOVEN (1880).
Van Tienhoven, a Cardiff businessman, offered goods to Byrne, a New York
trader, at a fixed price in a letter of 1 October.
On 8 October Van Tienhoven had sent a letter revoking the offer. The letter
of 1 October arrived on 11 October.
On 12 October, Byrne sent a telegram accepting the offer and a confirmatory
letter of acceptance on 14 October. The letter of 8 October arrived on 20
October and the letter of 14 October arrived on 30 October.
IS THERE A LEGALLY BINDING CONTRACT?