Agreement 2 (acceptance)

What is acceptance?

The final expression of assent by words of conduct to the offer.

Acceptance is the final step. It can be made verbally, by conduct etc. It must be clear. Ambiguity, hesitation, conditional language usually means no acceptance has taken place.

In the battle of forms what are the 3 main approaches

1. First shot: the term of the 1st party to send their form is accepted/

2. Last shot: the final set of terms set between the companies are accepted/

3. No contract: Parties terms are so inconsistent that no contract exists between the 2 parties.

Courts generally prefer the last shot approach.

What are the leading cases for the battle of forms?

Butler Machine Tool Co Ltd v Ex-Cell-o Corp. (England) Ltd (1979)-

Ex cell o corp returned back the contract without a part of it. Butler was given it and signed without looking. This amounted to acceptance.

TRW v Panasonic [2021] EWCA-

COA affirmed their position in this matter. This must be examined objectively. What would the reasonable business person understand this business contract to be?

What is the general rule to acceptance?

Acceptance must be communicated.Silence or uncommunicated information means there is no acceptance.

Entores c Miles far East corporation (1955)- If the offer does not go through, there is no offer????

Notable exceptions: Unilateral offers and postal rule.

What are the 3 methods of acceptance?

1. acceptance by conduct

2. Acceptance by silence

3. Acceptance by post

What are the methods of acceptance?

(1. acceptance by conduct)

Brogden v Metropolitan Railway (1877)-

Had been doing business informally for some time. No formal written contract. Brogden supplies coal. They decided to make a contract. N was sent a contract by Brogden who wrote 'accepted' and returned it. No one signed the contract but the reasonable person would see that there was a contract there. Later there was a dispute, the HOL rejected it as it showed that both parties clearly agreed to the terms.

What are the methods of acceptance?

(2. acceptance by silence)

General rule: silence does not amount to acceptance of bilateral offers.

LEADING CASE: Felthouse v Bindley (1862): "If I hear no more about him, I consider this horse mine". Rejected. Silence does not amount to acceptance.

The Leonidas D (1985): "We have been brought up to believe it to be axiomatic that acceptance of an offer cannot be from silence, save in the most exceptional circumstances"

What are the methods of acceptance?

(3. Acceptance by post)

General rule: The postal rule is an exception to the communications rule. Offers accepted by letter will form a contract as soon as it is posted.

Adams v Lindsell (1818)

When does the postal rule apply?

The letter must be properly stamped, addressed and committed to the postal service.

-The postman does not count Re London and Northern Bank, ex p Jones (1900)

The rule does not apply to the revocation of offers Byrne v Van Tienhoven (1880)

Applies even if the letter is late or never arrives Household fire and accident Insurance Co v Grant (1879)

Applies when it is reasonable to use the post Henthron v Fraser (1892)

The rule can be ousted by the offeror specifying that acceptance will have to be received to be effective Holwell securities Ltd v Hughes (1974)

Does not apply to instantaneous means of communication (such as email etc.) Entores; Thomas v BPE Solicitors

Instantaneous means of communication

It is not wholly clear whether an acceptance by mail or by text is governed by the communication rule or the postal rule

Thomas v BPE solicitors (2010)- court treated emails as a form of instantaneous communication. The contract is accepted when it's received in the offeror's inbox.

Prescribed methods of acceptance

Acceptance may be any method (verbal, written or electronic) unless a specific method is asked for by the offeror.

Compagnie de Commerce v Parkinson Stove (1953)- if no method is stated then any appropriate method will be accepted???

Yates Building v Pulleyn (1975)- Offer states that acceptance should be through.... The offeree used a regular letter and the court said this was valid. It was okay because their way of acceptance was not mandatory.

Manchester Diocesan Council of Education v Commercial and General Investments Ltd (1970)-

Unless the offeror has expressly stated that acceptance must be stated in a specific way, any way will create a valid contract.