ACCEPTANCE:

(1) METHODS OF ACCEPTANCE:

a) by conduct (Brodgen v Metropolitan Railway)

Brogden v Metropolitan Railway (1877) 2 App Cas 666: B was in habit of supplying A with coal when they
agreed that a formal contract should be drawn up. Draft was made and never completed although the parties
acted in accordance with its terms regarding price, time, and quantity.
a. There may be a consensus between parties short of a complete mode of expressing it, and that may
be gleaned from documents of an incomplete and imperfect description.
b. So, in essence, the conduct of both parties may indicate that a contract has been agreed in absence
of writing.

b) silence wont suffice (Felthouse v Bindley)
could argue the rule is flawed in principle & shouldnt apply where offeror is seeking to use it
to avoid the contract shouldnt be able to rely on the rule intended to protect the innocent
party
c) method can be prescribed/requirement waived altogether, if doesnt adversely affect the offeree
(Manchester v Diocesian Council for Education)

Manchester Diocesan Council for Education v Comm. & Gen. Investments [1970] 1 WLR 242: P offered
premises for sale by tender with prescribed procedure, subject to approval of the sale by the Secretary of
State. Procedure was not then followed, and the question arose as to when the contract arising from Ds
tender was concluded.
a. An offeror may indicate that his offer may be accepted in a particular manner. However, the condition
in this case does not say that it is the sole method of communicating the acceptance: an alternative
may therefore be used.
b. An offeror may by conduct or otherwise waive his right to insist on strict compliance with the
prescribed mode.
c. Where an offeror has prescribed a mode but has not insisted that it shall be the only binding mode
then acceptance by a mode which is no less advantageous will be sufficient to conclude the
contract.
d. Where there is no time limit on acceptance it must be accepted within a reasonable time period.

d) courts can imply the requirement for acceptance to be communicated to him (Carlill v Carbolic)


(2) COMMUNICATION OF ACCEPTANCE:

Must be communicated to the offeror (Felthouse v Bindley)

Felthouse v Bindley (1862) 11 CBNS 869: There had been a misunderstanding between parties as
to the sale price of a horse. A wrote to B to say that X would be the price, saying that if he heard
nothing in Y time then he would assume that it was sold to him. B brought action when horse
accidently sold.
o Silence cannot amount to acceptance of an offer as the intention to accept must be
communicated to the offeror.

Instantaneous communication (e.g. telex)
a) contract is complete when acceptance is received by offeror
b) contract is made at the place where acceptance is received (Entores v Milesupheld in The
Brinkibon resolve issue by
a. ref. to intention of parties
b. sound business practice
c. possible a judgment where the risks should lie (Thomas v BPE Solicitors)


Henthorn v Fraser [1892] 2 Ch 27: S gave P option to purchase for 14 days. On next day S posted
withdrawal which did not arrive until 5pm. Acceptance posted at 3pm.
o A person who has made an offer must be considered as continuously making it until he has
brought the knowledge of withdrawal to the mind of the person to whom the offer was made.
o Where the circumstances are such that it must have been within the contemplation of the
parties that, according to the ordinary usages of mankind, the post might be used as a means
of acceptance (in this case distance between parties was a factor), the acceptance is
complete as soon as it is posted.

Entores v Miles Far East Corp [1955] 2 QB 327: Offer made by telex and acceptance communicated in
that way. (CA).
o Denning LJ:
Communication by telex and telephone are instantaneous and so stand on a
different footing from the post. Gives examples of acceptance being drowned out
by aircraft or the line going dead; no acceptance.
Where a man does not know that acceptance has been received, but reasonably
believes that it has, the offeror will be bound where he did not receive it owing to
his own fault.
o Birkett LJ:
Postal rule is an exception to the ordinary rule which need not be extended to
instantaneous methods.
o Parker LJ:
Since the requirement of communication is for the benefit of the offeror he may
waive it expressly or by impliedly accepting the postal method on grounds of
expediency.
There is no need for a rule of convenience where the parties can communicate
instantaneously.

Postal Rule: acceptance takes place upon posting (Household Fire Insurance v Grant)
Household Fire Insurance v Grant (1879) 4 Ex D 216: D applied for shares in company. They were
allotted to him and he was sent a letter to that effect. The letter was never received.
o Bramwell LJ (Dissent):
The rule is that acceptance must be communicated, therefore the letter must be
received to constitute acceptance.
There can only be departure from the general rule where there is a special
agreement by the parties to do so.
There is no good reason for an arbitrary rule relating to postal acceptance. It
only works to create hardship for the offeror.
Disagrees with the notion that the post office is an agent for both parties as it
is not clear on what basis this can or should be so.
o Thesiger LJ:
A contract formed by correspondence through the post is accepted as soon
as the letter is posted and the acceptance is not put to an end in the event of
a letter never being delivered.
Two competing principles: (1) minds of two parties must meet to make a
contract and unless it is concluded at the moment when the continuing offer
is, in fact accepted, it is difficult to know when they are ever otherwise brought
together; (2) minds must be brought together by mutual communication.
The way to reconcile the principles is to treat the post office as an agent of
both parties. This may lead to hardship for the offeror but there can be no way
to make the consequences of the mistake of a mutual agent fall upon both
parties evenly.
An offeror may still make acceptance conditional upon actual communication.

rule can be displaced by clear offerors stipulation (Holwell Securities v Hughes shouldnt apply
where would lead to manifest inconvenience & absurdity)

Holwell Securities v Hughes [1974] 1 WLR 155: D granted P 6 month option to purchase to be exercise
by notice in writing to D. Letter was sent but never reached the address.
o Russell LJ:
Prima facie, acceptance must always be communicated. Before that principle is
displaced, it is necessary that the terms of the offer are consistent with the
displacement and is not one which points in the direction of actual communication
for acceptance.
The requirement of notice to is language which should be taken to assert the
ordinary situation in law that acceptance requires communication and is
inconsistent with the theory that acceptance can be constituted by an act of
posting. Also in this case, s196 Law of Property Act 1925 says notice must be
served for this kind of instrument (that is one which conveys title in land).
o Lawton LJ:
The postal rule does not apply if, having regard to all the circumstances, including
the nature of the subject matter in consideration, the negotiating parties cannot
have intended that there should have been a binding agreement until the party
accepting the offer or exercising the option had in fact communicated the
acceptance or exercise to the other.


Byrne v Van Tienhoven (1880) 5 CPD 344: D wrote to P to offer goods for sale. P immediately
accepted by telegram and posted a letter a few days later. In the interim D had posted a letter revoking
the offer.
o The postal rule cases are based on the principle that the writer has expressly or impliedly
assented to treat an answer to him by a letter duly posted as sufficient acceptance and
notification to himself i.e. the post office is his agent.
o However, the rule does not apply where revocation is concerned.

The Brinkibon Case [1983] 2 AC 34: Question as to whether when acceptance is sent by Telex the
contract is deemed to have been formed in an issue over jurisdiction.
o The postal rule is based on convenience.
o Accepts the decision in Entores as stating a general rule as it has generally received positive
comment.
o However, no universal rule can cover all situations. They must be resolved by reference to the
intention of the parties, sound business practice and in some cases a judgment as to where
the risks should lie (Lord Wilberforce).
o Lord Brandon thinks that the reason of commercial expediency applies to cases where there
is bound to be a substantial interval between the time when acceptance is sent and received.
Thus, not applied to instantaneous methods.

(3) ACCEPTANCE OF UNILATERAL OFFER NEED NOT BE COMMUNICATED:
Carlill v Carbolic Smoke Ball Co [1893] 1 QB 256
Errington v Errington [1952] 1 KB 290: F offered to obtain mortgage on house for S & W on understanding
that when they had paid off all the installments he would convey the property. S & W spilt, but W
continued to make payments. Issue as to whether could evict W.
o Lord Denning says that the promise is a unilateral contract which could not be revoked when
couple entered upon performance of the act, but if they stopped paying it would cease to bind
him if they left it incomplete and unperformed.
o Equity will prevent ejection for so long as to conditions are being fulfilled.
o Some inclination that equity would also force conveyance upon full completion although less
sure about this assertion.

Daulia v Four Millbank Nominees Ltd [1978] Ch 231: Goff LJ makes a statement to the effect that there
is an implied obligation on the part of the offeror not to prevent the condition becoming satisfied which
arises as soon as the offeree has started to perform. Once performance has started then it is too late to
revoke the offer.



(4) ACCEPTANCE IN IGNORANCE OF OFFER:
Performance of requested act = not acceptance unless performing party is aware of the offer

Gibbons v Proctor (1891) 4 LT 594: Advert offering reward for information leading to conviction. C gave
information to another officer but did not know of the offer and then tried to rely on the existence of the contract.
This case was treated as exceptional and entitled on the basis that other officers acted his agents in conveying the
information after publication of the reward. A lot seems to have been based on how important the information was.



(5) ACCEPTANCE MUST COINCIDE WITH OFFER:

Must coincide w/ offer, otherwise = counter offer (Hyde v Wrench)





(6) BATTLE OF THE FORMS:

Battle forms: parties exchange their own standard termsis there agreement on material terms
(Butler Machines v Ex-Cello Corp BUT
o Tekdata Interconnections Ltd v Amphenol Ltdcant have one universal rule but traditional
O&A analysis appliesin most cases provides degree of certainty desirable to commercial
relations. SO take last counter offer as having been accepted. If theres long term conduct b/w
parties, may dictate a different approach but court is slow to depart from traditional rules.
o GHSP Incorporated v AB Electronic Ltd [2010] disagreement on whether Ds liability was
capped failure to agree. Evidence of judicial reluctance to conclude no contract had been
made when parties have behaved as if there was judge scrapped both parties terms & held
SGA 1979 implied terms applied.

o Butler Machines v Ex-Cello Corp [1979] 1 WLR 401: Issue as to which terms prevail when A
sends form to B saying contract on those terms and B replies in acceptance on his standard
terms which conflict.
The letter by B which purports to be an acceptance is in fact a counter offer, as it
contained different terms which was then accepted by A on receipt and action in
accordance with the contract.
Denning LJ disapproves of the traditional analysis of offer and counter as he thinks it is
out of date. Thinks would be better to look at all the documents and see whether there
is agreement on the material points. Applying this guide in most battle of the forms
cases there is a contract as soon as the last of the forms is sent i.e. last shot approach.




i. HOW MAY ACCEPTANCE BE TERMINATED?

Revocation of posted acceptance.
Can an offeree withdraw his acceptance, after it has been posted, by a later communication, which reaches the
offeror before the acceptance? There is no clear authority in English law. The Scottish case of Dunmore v Alexander
(1830) appears to permit such a revocation but it is an unclear decision. A strict application of the postal rule would
not permit such withdrawal. This view is supported by decisions in: New Zealand in Wenkheim v Arndt (1873) and
South Africa in A-Z Bazaars v Ministry of Agriculture (1974). However, such an approach is regarded as inflexible.