Acceptance of offer

From Lawiki - The law notes repository
Jump to navigation Jump to search
Lawiki for and by law students - find us on Facebook if you want to help us edit this Law Wiki.

Not professional advice - LAWIKI cannot guarantee the validity of any information

In English Law, for an agreement (see: Contract) to be valid, there must be mutuality:an'offer and a corresponding acceptance'. The acceptance must be effected by communication to the offerer, either verbally or in writing and or in some cases, by conduct (e.g., see: Unilateral contract. Under certain circumstances, silence can be accepted as a means of communication.

A valid acceptance must agree in all particulars with the Offer; otherwise it is a counter-offer, not an acceptance (see: Counter-offer) at all. In particular, if the offer states terms for acceptance (e.g., that it be in writing) then the acceptor must comply for the contract to be valid. For example, in Neale v Merrit an offer stipulated full payment on acceptance; the acceptor purported to accept and enclosed part payment and a promise to pay the rest in installments. This was not deeded a true acceptance, and the contract was declared void (see: Neale v merrit (1930)).

It has been held that where the offeror is prepared to bear the risks of non-communication, acceptance can be effective by the offeree's acting as though the contract were accepted. [see Unilateral offer, Silence as a means of communcation]

Postal Rule: It is permissible for a written acceptance to be made by post, and the usual ruling is that acceptance occurs at the moment of posting, not of receipt, which can lead to anomalies (see: Acceptance of offer by post).

Instantaneous communication:If communication is 'instantaneous' (e.g., telephone, telex), then acceptance does not occur when the communication is made, but only when it is received. Of course, these events are legally contemporaneous, but it is possible for communication to fail during acceptance, and generally no-one should have to be bound by an acceptance that he has not heard (see: Entores Ltd v Miles Far East Corporation Ltd (1955). However, there are no universally rules that may be applied to all these cases, each case must be analyzed on the basis of who should bear the risk of an ineffective communication.

Silence as a means of communication:

If an offer is accepted 'subject to contract', this is merely an indication that the parties intend to contract formally at some later stage. This is usually used in sales of land and property, to allow the parties to signal their strong intention to contract, but not to be formally bound. An agreement 'subject to contract' is not binding on anyone, and neither party need proceed to a formal contract. On the other hand, a contract containing vague terms about provisionality may still be held by courts to be binding, so the precise form of words should be used.

In a contract for the sale of goods, Title to the goods passes from the seller to the buyer in the manner set out in the contract. If the contract contains no such provision, then title is usually deemed to pass at the moment the offer is accepted.

Finally, an acceptance of an offer cannot usually occur in ignorance (see: Acceptance In Ignorance), which may be a contention in Unilateral contract.

Contract Law