The manner of acceptance

Acceptance may take the form of words, spoken or written, or it may be implied by conduct, as where the offeree performs some specific act required by the offerer. Mere mental assent is insufficient, nor is it possible in English law to dispense with acceptance altogether. There must be some positive act of acceptance, and mere silence will never be enough.

In Felthouse v. Bindley (1863), negotiations were taking place regarding the price of a horse. The claimant eventually wrote, 'If I hear no more about him, I consider the horse mine at £ 30 15s.' The defendant did not reply. It was held that, although he had intended to accept and sell at this price, his silence could not constitute acceptance, and there was therefore no sale.

Thus where unsolicited goods arrive through the post with a note saying that unless they are returned within a specified time the recipient will be bound to pay the price, this note can be safely ignored. So long as the recipient does not treat the goods as his, by using or deliberately destroying them, his silence will not amount to acceptance. Indeed, under the Unsolicited Goods and Services Act 1971 as amended, the recipient will automatically become owner of the goods as against the sender, unless the sender collects them within 30 days. (Where the seller is a dealer, it can also be a criminal offence for him to demand payment.)

Where two businesses contract, an interesting 'battle of forms' can sometimes arise.

In Butler Machine Tool Co. Ltd v. Ex-Cell-O Corporation (England) Ltd (1979), the claimant offered to sell tools to the defendant and sent a printed copy of the claimant's standard terms. The defendant 'accepted' this offer, enclosing a copy of the defendant's standard terms, which differed slightly from the claimant's. The claimant acknowledged this acceptance by sending back a tear-off slip from the defendant's copy probably without reading it. It was held that the defendant's 'acceptance' was really a counter-offer. The claimant had accepted this counter-offer by sending back the tear-off slip and going on to perform the contract. When a dispute later arose, the defendant’s terms were, therefore, applied.

Communication of acceptance

As a general rule, acceptance must be communicated to the offerer. There is no contract until the offerer knows that his offer has been accepted. The acceptance must, moreover, be communicated by the offeree himself or his authorized agent. Unlike revocation, acceptance cannot be communicated by an unauthorized third party, however reliable.

In Powell v. Lee (1908), the claimant had applied for a post as headmaster. The school managers decided to appoint him, and one of the managers, without authority, told him this unofficially. Later, the managers changed their minds. It was held that they were free to do so; there was no contract with Powell, because acceptance had not been commu­nicated by the managers.

There are two main exceptions to the rule that acceptance is only effective on communication:

1. The offerer may dispense with communication, and indicate that the offeree should. if he wishes to accept, simply carry out his side of the bargain without bothering to inform the offerer. Thus if a customer wrote ordering fuel and, without further communication, the fuel was delivered in accordance with the order, the delivery would be acceptance of the offer to buy.

In Carlill v. Carbolic Smoke Ball Co. (1893), another defence raised was that Mrs Carlill had not communicated to the company that she intended to use the smoke ball and catch influenza. This defence also failed; the nature of the offer made communication of acceptance inappropriate.

In First Sport Ltd v. Barclay's Bank plc (1993), it was held that a 'cheque guarantee card', by which the bank promised that its client's cheque up to £ 50 would be paid, was an offer to the whole world. The retailer who allowed a customer to pay by cheque in reliance on the card had accepted the bank's offer, and did not need to tell the bank when doing so.

2. Where the posting rule applies, a letter of acceptance, properly addressed and stamped, is effective from the moment of posting, even if it never arrives. Three points must be emphasized about the posting rule. In the first place, the rule applies only where it must have been in the contemplation of the parties that the post would be used as a means of communicating the acceptance. This will not always be the case; if all the negotiations have taken place by telephone, and the offerer clearly expects a reply by telephone or fax, a letter of acceptance would not be effective until it arrived. Similarly, the posting rule would not apply if the offerer made it plain at the outset that he was only prepared to be bound when he knew of the acceptance.

In Holwell Securities Ltd v. Hughes (1974), an offer to sell required that acceptance be made 'by notice in writing to the intending vendor' within six months. Notice was posted but never arrived. It was held that there was no contract. The words of the offer showed that the offerer was not prepared to be bound until he received the written notice.

Secondly, there must obviously be some evidence of posting. It is not enough to give the letter to some other person to post, or even to hand it to a postman; it must be put into the hands of the postal authorities in the normal way. Finally, the posting rule applies only to acceptance; an offer, or a letter of revocation or rejection, will be effective only on arrival.

In Byrne v. Van Tienhoven (1880), a firm in Cardiff offered by letter to sell tin plate to a firm in New York. Later, the firm sent another letter revoking this offer, but while this was in transit and before its delivery, the New York firm posted a letter of acceptance. It was held that the parties clearly intended the use of the post to communicate acceptance, and posting the letter of acceptance, therefore, brought the contract into existence, since this was done before the revocation arrived.

The posting rule applies to other non-instantaneous means of communication, but not to the use of the phone, fax, or telex. In these latter cases, the communication is virtually instantaneous and is inoperative unless and until it reaches the other party.

In Entores v. Miles Far East Corporation (1955), an acceptance sent by telex from Amsterdam to London was held to be effective only when it arrived in London, so that the contract, being made in England, could be brought before the English courts.