ACCEPTANCE

This is a final and unqualified expression of assent to the terms of an offer. There must be an objective manifestation by the recipient of the offer, of an intention to be bound by the terms. Once a valid acceptance takes place, a binding contract is formed.

There are three main rules relating to acceptance;

•    The acceptance must be communicated to the offeree
•    The terms of acceptance must exactly match the terms of the offer
•    The agreement must be certain

     i)                  Communication

The general rule is that the offeror must receive acceptance before it is effective.

Silence will not amount to acceptance. In Felthouse v Bindley, a nephew discussed buying a horse from his uncle. He offered to purchase the horse and said if I don't hear from you by the weekend I will consider him mine. The horse was then sold by mistake at auction. The auctioneer had been asked not to sell the horse but had forgotten. The uncle commenced proceedings against the auctioneer for conversion. The action depended upon whether a valid contract existed between the nephew and the uncle. He court held that a contract had not been made. Silence does not amount to acceptance

The acceptance nay be by express words, by action or inferred from conduct.

Brogden v Metropolitan Railway – The claimants were the suppliers of coal to the defendant railway company. They had been dealing for some years on an informal basis with no written contract. The parties agreed that it would be wise to have a formal contract written. The defendant drew up a draft contract and sent it to the claimant. The claimant made some minor amendments and filled in some blanks and sent it back to the defendant. The defendant then simply filed the document and never communicated their acceptance to the contract. Throughout this period the claimants continued to supply the coal. Subsequently a dispute arose and it was questioned whether in fact the written agreement was valid. It was held that the written contract was valid despite no communication of the acceptance. The acceptance took place by performing the contract without any objection as to the terms.

The postal rule

where it agreed that the parties will use the post as a means of communication, the postal rule will apply. The postal rule states that where a letter is properly addressed and stamped the acceptance takes place when the letter is placed in the post box.

In Adams V Lindsell, the defendant wrote to the claimant offering to sell them some wool and asking for a reply 'in the course of post'. The letter was delayed in the post. On receiving the letter the claimant posted a letter of acceptance the same day. However, due to the delay the defendant's had assumed the claimant was not interested in the wool and sold it on to a third party. The claimant sued for breach of contract.

It was held that there was a valid contract which came in to existence the moment the letter of acceptance was placed in the post box.

Where the offer stipulates a particular mode of communication, the postal rule may not apply. In that case, the letter of acceptance will take effect only when received.

ii)               The terms of acceptance must exactly match the terms of the offer

If the terms differ, this will amount to a counter offer. A counter offer does not constitute acceptance; it is the making of a new offer which may be in turn be accepted or rejected.

Similarly, a request for further information does not amount to acceptance.

In Hyde v Wrench, The defendant offered to sell a farm to the claimant for £1,000. The claimant in reply offered £950 which the defendant refused. The claimant then sought to accept the original offer of £1,000. The defendant refused to sell to the claimant and the claimant brought an action for specific performance. It was held that there was no contract. Where a counter offer is made this destroys the original offer so that it is no longer open to the offeree to accept.

Neale v Merrett; M offered to sell N land for £280.00 in one payment. N accepted the offer by correspondence and enclosed £80 with the letter promising to pay the balance in £50 monthly instalments. Held: The purported acceptance was not in fact acceptance but a counter offer.

iii)            The agreement must be certain

 It must be possible to determin exactly what the the parties have agreed.

Scammell and nephew v Ouston; The parties entered an agreement whereby Scammell were to supply a van for £286 on HP terms over 2 years and Ouston was to trade in his old van for £100. There was then some disagreement and Scammel refused to supply the van. Held: There was no certainty as to the terms of the agreement. Whilst there was agreement on the price there was nothing in relation to the HP terms stating whether it would be weekly or monthly instalments or how much the instalments would be.