ACCEPTANCE

PART 01

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 Acceptance

Definition
S2(b) CA

Distinction Between Acceptance &

Counter Offer

Revocation of acceptance
Communication of acceptance

Electronic contract
Communication by post/ Postal Rule
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 Definition of acceptance

• An assent to the terms of a proposal.

• S2(b) of CA provides:

“when a person to whom a proposal is made signifies

his assent thereto, the proposal is said to be accepted;
a proposal, when accepted becomes a promise”

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 Cont…

❖The person accepting the proposal is called the

‘promisee’ or the ‘acceptor’.

❖acceptance can be made in writing, or orally or

by conduct or by a combination of these
methods.

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 Condition of acceptance

S 7(b)- be expressed in
S 7(a)- be absolute some usual and reasonable
and unqualified manner

Hyde v Ramsgate
Wrench Victoria v
Montfiore 5
S. 7(a) absolute & unqualified

• Accepts the term of the contract on

exactly the same term or without any
addition, qualification or alteration.

( mirror image rule)

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S. 7(a) absolute & unqualified

Example :

If A makes a proposal to B on term x, y, and

z then B accepts on term x and y only or
w, x, y, z the term is not absolute and it
amount to counter offer.

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 Counter Offer?
• Where the acceptance is made with
any addition or alteration
• Any modification or variations of an
offer does not constitute an
acceptance.

It known as Counter Offer

. It is also a rejection of the original offer.
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 Counter Offer
• A person who makes a counter offer = not
making an acceptance but an offer.

– A offer to sell a house at RM 250K=

offeror
– B made a CO at RM 200K = B rejects the
offer and making counter offer. He is
now an offeror
– A = acceptor or promisee.
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 Hyde v Wrench (1840) 3 Beav
334
• The D offered to sell his property to the
P at 1000 pound.
• However, P agrees to buy it at 950
pound. D refused to accept it.
• 2 days later, P agree to buy the property
at 1000 pound.
• Again, D refused to accept and P sued
for Specific performance.
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 Hyde v Wrench (1840) 3 Beav
334
• The court held that:

There was no contract created

• no acceptance because the P’s offer to

buy at 950 had rejected the original
proposal.

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 However...
However, further communication is still
permissible.

Thus, there is differences between Counter

Offer and mere request for information.

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 Stevenson Jaques & Co. v
McLean (1880) 5 QBD 346

• Saturday- D wrote to the P offering to sell the iron

at 40s per tonne nett cash. He hold the offer until
Monday.
• Monday- the P telegraphed the D at 9.42 am
requesting to know whether the D would accept
40s per tonne iron to be paid over two months or ,
if not, the longest limit the D would give.

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 Cont...
• 10.01 am: D received P’s letter and subsequently
sold the said iron to a third party.
• 1.25pm: the D telegraphed and informed the P
that he has sold the iron (revoking the offer).
• 1.34: But, the P having had no reply from D, he
telegraphed again and accepting D’s offer.

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 Cont...

• The P sued for breach of contract and D

pleaded that the telegram sent by P on
Monday (9.42 am) was a rejection of the his
offer .

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 Cont...
The court held:

• the D was in breach of contract as the

telegram by P was meant only for
further information and does not
constitute a counter offer.

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7(b) accepts in usual and reasonable
manner.

S. 7 (b) of CA:
...Based on reasonable time and
reasonable method/manner ; UNLESS
the proposal prescribes the manner in
which it is to be accepted.

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 Ramsgate Victoria Hotel Co. v
Montefiore (1866) LR 1 Ex Ch 109

8 June- The D applied for shares in the P’s

company and had paid a deposit.
He received no further news from P until 23
November when he has been informed that the
shares had been allotted to him and that he
should pay the balance due on them.

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 Ramsgate Victoria Hotel Co. v
Montefiore (1866) LR 1 Ex Ch 109
The court held that:

there was no valid binding contract

because acceptance was not made within
reasonable time.
(June- November)

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Fraser v Everett (1889) 4 Ky 512

(other case)

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 Eliason v Henshaw

The A offered to buy flour from R. He further

requested that the acceptance of the same
should be sent to him at Harper’s Ferry within
the prescribed time.

The R then sent his letter of acceptance by mail

and thinking that it would reach the A faster.
Unfortunately, the letter arrived after the
prescribed date.
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 Eliason v Henshaw

The issue :
Whether the said acceptance is valid?

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 Eliason v Henshaw

Court held that:

A entitled to reject the acceptance made since it

not follow the prescribed mode of acceptance.

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Continue to Part 02

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