Contract | Formation
Acceptance: Communication
Revision Note | Degree
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Introduction
- general rule: acceptance must be communicated
Entores v Miles Far East Corp. [1955] 2 QB 327
Facts:
- plaintiff (P) sent an offer by telex to purchase copper cathodes from defendant (D), D accepted by telex
Issue:
- jurisdiction issue: where had acceptance occurred?
Held:
- court looked at formation of the contract and established principle acceptance must be communicated.
- Denning LJ:
Suppose, for instance, that I shout an offer to a man across a river or a courtyard but I do not hear his reply because it is drowned by an aircraft flying overhead. There is no contract at that moment. If he wishes to make a contract, he must wait till the aircraft is gone and then shout back his acceptance so that I can hear what he says. Not until I have his answer am I bound...
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Method
- offeror may stipulate mode of communicating acceptance and offeree must comply or use equally effective method
Tinn v Hoffman & Co. (1873) 29 LT 271
Facts:
- D offered to sell P iron and requesting reply
by return of post
Issue:
- did acceptance have to be by post?
Held:
- Honeyman J: an equally expeditious method will suffice,eg. telegram or verbal message
- D offered to sell P iron and requesting reply
- an equally effective method will not suffice if offeror has made clear a particular method is required
Yates Building Co. Ltd v RJ Pulleyn & Son (York) Ltd (1975) 237 EG 183
Facts:
- D gave P option to purchase land, stating notice of acceptance should be returned
by registered or recorded delivery
- P returned notice by ordinary post, D refused notice stating:
.. the option agreement provides for notice to be sent by a registered or recorded delivery post. Your letter was not so sent...
Issue:
- was the acceptance sufficient?
Held:
- no enforceable contract, was a precise requirement notice had to be sent
by registered or recorded delivery post
, P did not comply
- D gave P option to purchase land, stating notice of acceptance should be returned
Third party
- a third party may purport to accept an offer
Powell v Lee (1908) 99 LT 284
Facts:
- P applied for a job as a headmaster
- a third party at the school, informed P was appointed, without authority
Issue:
- aan a third party communicate acceptance?
Held:
- third party must be authorised to communicate acceptance
Silence
- general rule: silence and mere inactivity do not constitute acceptance
- offeror cannot say that unless offeree communicates a rejection he will be deemed to have accepted, onus on offeree to accept not reject
Felthouse v Bindley [1862] EWHC CP J35
Facts:
- P wanted to purchase a horse from his nephew, P stated:
If I hear no more about him, I consider the horse mine at £30 and 15s
- nephew did not reply but told D not sell the horse, D sold the horse at auction
- to sue D, under tort law, P had to show he had contract for horse
Issue:
- was the nephew's silence capable of being acceptance of P's offer?
Held:
- no binding contract: P could not impose offer upon his nephew and require him to reject it, nephew had not communicated acceptance
- decision criticised: nephew was not unwilling offeree (in need of protection by rule that mere silence is not consent) and had indicated accpetance by telling D not to sell, not been overruled
- P wanted to purchase a horse from his nephew, P stated:
- offeree may be able to choose to be bound by silent acceptance
Re Selectmove [1995] 1 WLR 474
Facts:
- a dispute over tax
Issue:
- question of whether silence could constitute acceptance featured but was not essential to decision
Held:
- Gibson LJ obiter:
Where the offeree himself indicates that an offer is to be taken as accepted if he does not indicate to the contrary by an ascertainable time, he is undertaking to speak if he does not want an agreement to be concluded. I see no reason in principle why that should not be an exceptional circumstance such that the offer can be accepted by silence...
Exception
- offer of a unilateral contract to public at large (advert) can be worded to waive need to communicate acceptance prior to claim
Carlill v Carbolic Smoke Ball Co. [1893] 1 QB 256
Facts:
- D's advert stated:
£100 reward will be paid... to any person who contracts influenza after having used the ball... according to the printed directions supplied...
- P's claim was refused and D argued P had not communicated notice of her acceptance
Issue:
- did P communicate acceptance?
Held:
- the wording of the advert meant P did not have to communicate acceptance
- D did not expect every customer to contact them on purchasing item, rather only those who used product as directed and then caught influenza
- D's advert stated: