Professional Documents
Culture Documents
Contract Acceptance
Contract Acceptance
Contract Acceptance
1
Acceptance
Definition
S2(b) CA
Revocation of acceptance
Communication of acceptance
Electronic contract
Communication by post/ Postal Rule
2
Definition of acceptance
• S2(b) of CA provides:
3
Cont…
4
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
6
S. 7(a) absolute & unqualified
Example :
7
Counter Offer?
• Where the acceptance is made with
any addition or alteration
• Any modification or variations of an
offer does not constitute an
acceptance.
11
However...
However, further communication is still
permissible.
12
Stevenson Jaques & Co. v
McLean (1880) 5 QBD 346
13
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.
14
Cont...
15
Cont...
The court held:
16
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.
17
Ramsgate Victoria Hotel Co. v
Montefiore (1866) LR 1 Ex Ch 109
18
Ramsgate Victoria Hotel Co. v
Montefiore (1866) LR 1 Ex Ch 109
The court held that:
19
Fraser v Everett (1889) 4 Ky 512
(other case)
20
Eliason v Henshaw
The issue :
Whether the said acceptance is valid?
22
Eliason v Henshaw
23
Western Electric v welsh Development
Agency
24
COMMUNICATION OF ACCEPTANCE
25
Communication of Acceptance
• General Rule:
26
Communication of Acceptance
28
General rule:
29
Felthouse v Bindley (1826) 11 CB
(NS) 869
• D who is an auctioneer, is under duty to auction
J.Felthouse’s property. P, who is J.Felthouse’s uncle is
interested to buy a horse that is supposed to be
auctioned.
• He then, wrote a letter to his nephew that reads, “ If I
receives no news from you, I will consider that the said
horse to be mine at the price of 30 pound.
• J felthouse does not answer the letter but has
instructed the D to pull away/withdraw the horse from
being auctioned.
• Unfortunately, by mistake the D sold the horse. Then, P
filed a claim.
30
Felthouse v Bindley (1826) 11 CB
(NS) 869
• The court held that:
31
EXCEPTION:
SILENCE will amount to
communication OF ACCEPTANCE!
32
EXCEPTION:
SILENCE will amount to
communication OF ACCEPTANCE!
33
Erington v Erington
34
Erington v Erington
35
EXCEPTION:
SILENCE will amount to
communication OF ACCEPTANCE!
36
Carlil v Carbolic Smoke Ball Co. [
1893] 1 QB 256
37
EXCEPTION:
SILENCE will amount to
communication OF ACCEPTANCE!
38
POSTAL RULE
39
POSTAL RULE
• Illustration (b) of s4 :
– B accepts A’s proposal by a letter sent by post. The
communication of the acceptance is complete as
against A, when the letter is posted.
40
Example:
• A wants to sell his house for B for RM200,000.
– 1July 2000: A sent an offer letter to B
– 4 July 2000: B received the offer letter
– 6 July 2000: B put acceptance in a post
Box.
4 July 2000: Offer complete
6 July 2000: Acceptance complete as against A
41
Cont...
42
Cont...
• Thus,
It binds the offeror from the time the said LOA IS POSTED.
The offeror BOUND by the Offeree’s acceptance
eventhough he has NO knowledge of the acceptance
being made.
• The transaction is binding irrespective of any delay, lost
or disappearance in the course of transit.
43
Entores Ltd v Miles Far East
Corporation [1955] 2 QB 327
44
Ignatius v Bell (1913) 2 FMSLR 115
45
Ignatius v Bell
(Reasonable Manner)
• The court held that:
47
Household Fire Insurance v Grant
48
Postal Rule: Isn’t FAIR to
Offeror???
POSTAL RULE:
49
What might Offeror Does???
Pre-caution.
Put adequate protection for himself.
By inserting certain terms in the LO.
i.e. : …Acceptance is complete, upon
received the said LOA by the offeror.
50
Holwell Securities Ltd v Hughes
51
Holwell Securities Ltd v Hughes
52
What about an Instantaneous
Communication?
• Postal rule does not apply in cases of
instantaneous communications as it is governed
by general rule.
53
What about an Instantaneous
Communication?
54
Revocation of acceptance
• S5(2) of CA :
“ An acceptance may be revoked at any time
before the communication of the acceptance is
complete against the acceptor, but not
afterwards”.
55
Revocation of acceptance
• Illustration of S5(2) of CA :
“B may revoke his acceptance at any time before
or at the moment when the letter reaches A ,
but not afterwards”.
56
Revocation by post (When Complete)
S4(3)(a) CA S4(3)(b) CA
58
Example:
• A propose to sell his house to B via
letter which sent by post
• B accepts the proposal by a letter sent
by post
• B may revoke his acceptance at any
time before or at the moment when
the letter communicating it reaches A
not afterwards.
59
Dunmore v Alexander
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Note: This Notes and Copyright therein is the property of
Madam Norazla Abdul Wahab and is prepared for the benefit of
her students enrolled in the MGM 3351 course for their individual
study. Any other use or reproduction by any person WITHOUT
CONSENT IS PROHIBITED. 61