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(Roberta S. Russell, Bernard W. Taylor) Operations
(Roberta S. Russell, Bernard W. Taylor) Operations
LAW
- LECTURE 2
ACCEPTANCE
WHAT IS ACCEPTANCE?
S. 2(b) Contracts Act
“When a person to whom the proposal is made
signifies his assent thereto, the proposal is said
to be accepted; a proposal when accepted becomes
a promise”.
Case :
Facts :
The parties were negotiating for the sale of iron. D
wrote to P fixing 40s per ton- net cash And
stating that he will hold the offer till following
Monday. On that Monday morning, P
telegraphed to D stating “ Please wire whether
you would accept 40 for delivery over 2 months
or, if not, longest limit you could give”. D didn’t
reply and on the same day, sold the iron to
someone else and telegraphed the P at 1.25 pm
saying that he done so.
Held :
There is no counter proposal. From the words
“please wire…..” , there is nothing specific by way
of offer or rejection, but a mere inquiry, which
should have been answered and not teated as a
rejection of the offer.
2) Acceptance must be communicated
Held :
The communication through telex in this case was
instantaneous and the contract was made at the place
where the acceptance was received, in this case, in
London.
3) ACCEPTANCE BY CONDUCT
An acceptor, may by his conduct indicate his
intention whether he has or has not accepted an
offer.
i.e. When a person takes any item from a
supermarket shelf, puts it in his basket and
brings it to the cashier to pay, this person is
making an offer. This offer is accepted by cnduct
when the cashier takes the item, scans price tag
on the item and accepts the money for its price.
Case : Woon Yoke Lin v. United Estate Projects
Berhad [1998] 4 AMR 4052
Held :
The nephew’s acceptance had not been
communicated to the uncle. The horse did not
therefore belong to him.
The decision was supported by 3 grounds :
1. Silence is ambiguous and difficult to infer the
intention to accept.
2. Acceptance must be communicated so that we
may know when a contract binds both parties.
3. Prevents an offeror from exploiting an offeree’s
inertia by making him contractually liable unless
he takes the trouble to reject the offer expressly.
Example:
A proposes, by a letter sent by post, to sell his house to
B. B accepts the proposal by a letter sent by post.
A may revoked his proposal at any time or at the
moment when B posts his letter of acceptance, but not
afterwards.
B may revoked his acceptance at any time before or at
the moment when the letter communicating it reaches
A, but not afterwards.
S. 4(3) Contracts Act
The communication of a revocation is complete –
a) as against the person who makes it, when it is
put into a course of transmission to the person to
whom it is made, so as to be out of the power of
the person who makes it;
Example :
A revokes his acceptance by telegram. A’s
revocation is complete as against A when the
telegram is despatched, and as against B when it
reaches him.
FORMATION OF ELECTRONIC CONTRACTS
The main issue arise is in the area of offer and
acceptance.
Whether an advertisement on a website
(Webvertisement) is an offer or merely an invitation
to treat.