Acceptance

- Defined as an unconditional or unqualified assent to all the terms of the offer [Powell v Lee]
- [Butler v Ex-Cell-O-Corp] [Tinn v Hoffman]
- [Tekdata Interconnections Ltd v Amphenol Ltd]
- General rule: Acceptance must be communicated [Entores v Miles Far East Corporation]
- Denning LJ : …
- Facts: C was a London company and D was an American company with agents in Amsterdam. C in London
telexed the D’s agents, offering to buy goods from them and the agents accepted again by telex. C alleged
that D had broken their contract and wanted to bring an action against them.
- The rules of civil litigation – they could only bring this action in England if the contract had been made in
England
- Held: Because acceptance had been received in London, the contract was deemed to have been made there
and so legal action could proceed.

- Exceptions:
1. Unilateral offer which requires performance of an act/conduct [Carlill v Carbolic Smoke Ball Co]
2. If it is the fault of the offeror [Entores v Miles Far East Corporation] [The Brimnes]
3. Postal rule [Adams v Lindsell]
- Acceptance takes place at the moment of posting
Conditions:
 It is correctly addressed stamped & there is proof of posting [Household Fire Insurance v Grant]
 It must be reasonable to use the post [Henthorn v Fraser]
 The use must not lead to manifest inconvenience and absurdity [Holwell Securities v Hughes]

[Adams v Lindsell]

 Facts: On 2 Sep 1817, D wrote to C offering to sell sheep fleeces, requiring a respond ‘in course of post’. D
did not address the letter correctly, it only reached the C on 5 Sep. C posted their acceptance the same
evening and it reached the D on 9 Sep. On 8 Sep, D sold the wool to a third party.
 Held: D was bound since the evening of 5 Sep as the acceptance was posted.

Is postal rule still relevant today?

McKendrick – offeree should not be prejudiced once he has dispatched his acceptance & he should be able to rely on
the efficacy of his acceptance.

Practical difficulties of the postal rule: (Persuasive authority) ***

Letter of acceptance gets lost in the post – In Scotland, [Mason v Benhar Coal] Lord Shand ruled that ‘no
contract came into existence when acceptance was posted but never reached the offeror’.

When the offeree posts the acceptance & sends a revocation by a quicker method –
[A to Z Bazaars v Minister of Agriculture] (South African case) & [Wenkheim v Arndt] (NZ case) – revocation
not permissible

[Countess of Dunmore v Alexander] – revocation was possible, as the revocation letter was 1 st letter opened
by the offeror.

- Exceptions:
1. Letter of acceptance not properly posted [Re London and Northern Bank, ex parte Jones]
2. Letter of acceptance misaddressed – what if the wrong address was provided by offeror?
3. Exclusion of postal rule by offeror [Holwell Securities v Hughes]
4. The post must be a reasonable method of acceptance – e.g. when offer made in writing
 Q1: When does postal rule apply?
A: It is applicable only when there is a proof of correct mailing (properly addressed & stamped)

Q2: Did the offeror stipulate a specific method of communication to be complied with?

Q3: What is the status of the postal rule in the modern age?
A: Postal rule is only applicable for letter for acceptance.

- Acceptance can be made in writing/orally/by conduct [Brogden v Metropolitan Rail]

- Facts: B supplied the railway company with coal for several years without any formal agreement. To make it
official, Rail Co. sent B a draft agreement which left a blank space for B to insert the name of an arbitrator.
After doing so, B signed and returned it and marked it ‘approved’. The draft was in the drawer for the next 2
years without any further steps taken regarding it. B continued to supply coal and the Rail Co. paid for it. A
dispute arose and B denied that any binding contract existed.
- Held: HOL; by inserting the arbitrator’s name, B added a new term (counter-offer). A valid contract was
completed either when the company first ordered coal after receiving the draft agreement from B or at the
latest when he supplied the first lot of coal.

- Acceptance must be a positive act

- Silence does not amount to acceptance [Felthouse v Bindley]
- There was no contract between the uncle and nephew regarding the sale of a horse, as the nephew had not
actually accepted the uncle’s offer to buy.

- Exception: If it was the offeree who suggested that the silence on their part would constitute an acceptance
[Re Selectmove Ltd]

- Instantaneous Communication

[Brinkibon v Stahag Stahl]

- The Entores decision was approved of in this case, which had almost identical facts to Entores but in this
case, the telex had been received out of working hours. HOL held that acceptance could only be effective
and a contract formed once the office is reopened.
- “There is no one universal rule to cover the situation but in deciding, the courts must take into account
whether its application leads to sound business practice & does it reflect the parties intention & all other
surroundings circumstances.”

[The Brimnes] – if the message is sent during normal hours, it should be taken as if it will be seen when it is sent. The
negligence of the receiver not reading the message will not change the general rule.

- D hired a ship from the C, but did not pay the hire due by a particular date, so the C sent a telex message
with drawing the use of the ship from the D.
- Held: Withdrawal was effective when the telex arrived at the D’s office during ordinary business hours.

- [Entores v Miles Far East Corp] & [Tekdata Interconnections v Amphenol Ltd]
- Consumer Protection (Distance Selling) Regulations 2000 & Postal Services Act 2000

Q: Can one accept in ignorance of an offer?

A: Preferred view -> A person cannot accept an offer that he is unaware of, because in order for there to be a
contract, there must be an agreement (consensus ad idem) ‘meeting of the minds’

Professor Treitel …

[R v Clarke] (Australia) – the offeree knew about the reward but completely forgotten about it. Held: He would be
treated as if he had never known about the reward at all
[Fitch v Snedaker] (America) – Held: A person who gave information without any knowledge of the reward cannot
claim the reward

[Williams v Carwardine] (America) – motive was irrelevant – although she gave info as she thought she was going to
die, she was entitled to the reward

Contentious view -> VAR, Social responsibility, Factual benefit

[Gibbons v Proctor] – Held: C was allowed to claim the reward even though did not know about the offer at the time
he discovered the information but got to know about it before he claimed the reward