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Introduction....Page 1 Definition of Acceptance Definition of Offer

Acceptance as a lighted match is to a train of gun powder.Page 2 Essentials of a valid offer

Essentials of a valid acceptance.Page 7

Authorities explaining mere mental acceptance..Page 9

Bibliography...Page 11

Acceptance is a final and unqualified expression of assent to the terms of an offer. Objective test of agreement applied to an acceptance no less than to an offer. Mere acknowledgement of an offer would not be acceptance. The mere acknowledgement of an offer in the sense of communication stating simply that the offer has been received would like wise not be an acceptance. But an acknowledgement may be its express terms or in a particular context by implication, contain a statement that the sender agreed to the terms of the offer and that he was therefore accepting it1. When the person to whom the proposal is made signifies his assent thereto, the proposal is said to be accepted and a proposal, when accepted, becomes a promise 2. An offer is an expression of willingness to contract on specified terms made with intention that it is to become binding as soon as it is accepted by the person to whom it is addressed. Under the objective test of agreement an apparent intention to be bound may suffice, that is the alleged offeror may be bound if his words or conduct are such as to induce a reasonable person to believe that he intend to be bound, even though in fact he has no such intention. An offer can also be defined as an expression of willingness to enter into a contract on difinite terms, as soon as these terms are accepted. In other words, an offer is a proposal by one party to another to enter into legally binding agreement with him. The person making the offer is called the offeror and the person to whom the offer is made is called the offeree3. When one person signifies to another his willingness to do or to abstain from doing anything with a view of obtaining the assent of that other to such act or abstinence, he is said to make a proposal4.

Edwin Peal; Law of Contract in East Africa, 11th Edition (2003) pg 30 Law of Contract Act [Cap 345, R.E 2002] section 2(1)(b) 3 Edwin Peal; Law of Contract in East Africa, 11th Edition (2003) pg 20 4 Law of Contract Act [Cap 345, R.E. 2002] section 2(1)(a)
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The manifestation of willingness to enter into a burgain so made as to justify another person in understanding that his assent to that burgain is invited and concludes it 5. Acceptance is to an offer what a lighted match is to a train of gun powder. It produces something which cannot be recalled or undone -Anson The formation of a contract can be illustrated by the famous gunpowder and lighted match by Anson as stated above. The materials in gunpowder (like sulphur and iron fillings) by themselves are not enough to cause an explosion. But when a lighted match is applied to the inflammable mixture, an explosion occurs. Similarly, offer and acceptance together can explode leading to the formation of a valid contract. But if there is any disqualification on the part of either offer or acceptance no contract will be formed just as if a gun powder lacks sulphur or lighted match is damp no explosion will occur. Acceptance converts offer into promise and then it is too late to remove it. All contracts are made by the process of lawful offer by one party and the lawful acceptance of the offer by the other party. X says to Y, Will you buy car for 4,000,000Tsh? This is an offer if Y says yes the offer is accepted and the contract is formed. Offer alone and Acceptance alone are inactive, inert or powerless. When separate they cannot lead to the formation of a contract. But all together can form a contract enforceable by the court provided the other essential elements of the contract exist. Essentials of a valid offer A valid offer must possess the following essentials: The terms of the offer must be certain. If the terms of an offer are not certain or definite, it is not a valid offer. It is rightly observed that, unless all the materials terms of the contract are agreed, there is no binding obligation. Therefore, the terms of an offer must not be loose or vague. They should not be capable of different or various interpretations and it must be possible to correct as certain the intention of the parties.

Restatement (second of contracts) of section 24

For example: a husband on leaving his wife promised to pay her 15 a week so long as I can manage it. The above illustration was the same as in the case of; Gould v. Could6 as it was held that: although the husband and wife, who lived apart because of break-up of their marriage, could enter into a legally binding agreement, the vague or discretionary terms of the arrangement indicated an intention not to create legal relations. An offer must be distinguished from an invitation to make offer (invitation to treaty) An offer is different from invitation to offer. In the case of invitation to offer, the person sending his invitation is merely calling upon the others to place their offers. There is no offer from his side, but is expecting offers. His intention is merely to circulate the information that whosoever is willing to transact with him on the terms laid down in the intention, he is readily to deal with. Thus goods displayed in the shop with the price marked on them are an invitation to offer. Similarly, an advertisement for sale of goods by auction, quotation, catalogues of price are all examples of invitation to offer. In the case of Patridge v. Critendem7the appellant had pleaded an advertisement indicating that he had certain wild birds for sale. The advertisement did specify the price but gave no details about delivery or quantities available. It was an offence to offer such birds for sale. In order to prove the offence it was necessary to prove that the advertisement was an offer. To this the trial court was satisfied that the advertisement was an offer and thus convicted the accused. On appeal it was argued that the advertisement was an offer but a mere invitation to treat because, first, the advertisement was not sufficiently specific to amount to an offer. Secondly the court said that it would not be reasonable to think that the appellant was willing to be bound by any and every acceptance made. Also in the case of Fisher v. Bell8; the defendant was charged by the trial court which decided that there had not with offering for sale a flick knife in violation of the Restriction of Offensive Weapons Act, 1959, the relevant provision which read in part any person who

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(1970) 1 Q.B. 275 (1968) 2ALLER 421 8 (1961) 1 Q.B. 398

manufactures, sells or hires or offers for sale or lends or gives to any persona flick knife shall be guilty of an offence. To this the trial court decided that there had been an offer for sale of the flick knife, the display of an article with a price on it in a shop window is merely an invitation to treat. It is in no sense an offer for sale the acceptance of which constitutes a contract. Also in the case of Harvey v. Facey9 the appellant sent a telegram to the respondent asking will you sell us Bumper Hall Pen? (this was a piece of land) telegraph lowest cash price, reply paid. The respondent replied simply lowest price of Bumper Hall Pen 900. The appellant then purported to accept this offer. The respondent denied that his reply was an offer. To this the court held that: no offer had been made which the appellants could accept. The reason given by the court for its decision is that the respondents did not reply to the f irst part of the question will you sell us Bumper Hall Pen? Rather that the reply was limited to the second part of the question telegraph the lowest cash price. An offer may be general or specific An offer is said to be general when it is made to unascertained body of individuals. It is made to the public at large and anyone may accept the same. A specific offer is made to a definite person and hence can be accepted only by the same person or persons. In the case of Carlil v. Carbolic Smoke Ball Co.10the defendants were proprietors of a medical preparation called the carbolic smoke ball. They inserted advertisements in various newspapers in which they offered to pay 100 to any person who contracted influenza after using the ball three times a day for two weeks. They added that they had deposited 1000 at the Bank for that purpose. The plaintiff, a lady, used the ball as advertised, and was attacked by influenza during the course of treatment. She sued for 100. To this the court held: that the advertisement was an offer to the whole world and that, by no analogy with the reward cases, it was possible to make an offer of this kind.


(1893) AC 552 (1893) 1 Q.B. 256

An offer may be expressed or implied An offer may be made, either by words or by conduct, when an offer is made by words; written or spoken it is called an express offer. When the intention to make an offer is gathered from the conduct of the person, it is called implied of offer. It is illustrated as under: J says to L that he will sell his bicycle for Tshs.100, 000. This is an express offer. When a transport company runs a bus on a particular route, there is an implied offer by the transport company to carry passengers for a certain fare. The acceptance of the offer is complete as soon as a passenger boards the bus as from the position of Wilkie v. London Passenger Transport11. An offer must contemplate of giving rise to legal consequences If the offer does not intend to give rise to legal consequences it is not valid offer in the eyes of law. An offer made jocularly or in jest is not a valid offer. It must be the intention of the person making the offer is accepted, it should give rise to a binding contract between them. In business transactions, it is assumed that the parties intend to create relation and the breach of the agreement should be followed by legal consequences. In the case of Rose & Frank Co. vs. JR Crompton & Brothers Ltd.12 Rose and Frank Co. was the sole US distributor of JR Cromptons carbon paper products. In 1913 the parties signed a new document. The relationship between the two parties broke down as JR Crompton refused to supply some of the orders of the plaintiff. Rose & Frank Co. sued on enforcement of agreement. To this the court held that: the honorable pledge was repugnant to the intention of the rest of the document, and that furthermore, the enforceability of such a clause was contrary to public policy. On the other hand, in domestic or social agreement it is assumed that the parties do not intend to give rise to legal consequences. In the case of Balfour v. Balfour13Balfour went to work in India leaving his wife in England for health reasons. He promised to pay his wife 30 per month for her maintenance. The wife later divorced her husband. Then his husband refused to pay as
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(1947) 1 All E.R. 258. C.A. (1923) 2 K.B. 261 13 (1919) 2 K.B. 571

promised. The wife sued. The court held that this was not a contract because the parties did not intend that they should be attended by legal consequences. Every offer must be communicated Offer must be communicated to offeree otherwise it is not effective in the eyes of law. There cannot be any acceptance without the knowledge of the offer. Thus, where A finds an article lying on a street and restores it to the owners without any knowledge about the reward offered by the owner, he cannot claim the reward from the owner because there was no communication of offer to him. Examples In Fitch v. Snedaker14S offered a reward to anyone who returned his lost dog. F brought the dog to S without having heard of the offer. To this the court held that: F was not entitled to the reward. In Powell v. Lee15the defendants were managers of a school and wished to appoint a headmaster. They passed a resolution appointing the plaintiff (Powell) among other two applicants to be the headmaster but gave no instruction that this decision was to be communicated to him. One of the managers was instructed to inform one of the candidates (Parker) that he had not been selected. This manager without authority also informed Powell that he had been selected. Later the matter was reopened and Parker was properly appointed. Lee then informed the plaintiff that this appointment had been made. The plaintiff sued the six managers for managers for damages for breach of contract. The court held that there was no contract because there was no authorized communication of the intention to contract by the managers. In Lalman v. GauriDutt16 S sent his servant L to trace the missing nephew. He then announced that anybody who traced his nephew would be entitled to a certain reward. L, traced the boy in ignorance of this announcement. Subsequently when he came to know of the reward, he claimed it. To this the court held that: He was not entitled to the reward.
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(1868) 38 N.Y. 288 (1908) 99 L.T. 284 16 (1913) 11 All. L.J. 489

Communication of special terms This rule is in a way an extension of the above rule. It requires that the special terms of the offer must be specifically brought to the notice of the person to whom it is made. Otherwise, they are not binding on the acceptor; where a person buys a travelling ticket from a tourist company for his journey by bus, the tourist company is under obligation to provide the bus services till the journey is complete. In case the bus suffers from breakdown, the company cannot claim that in such event it is not responsible to make alternative arrangement. The company can take such defense if such terms were brought to the notice of the tourist at the time when he bought the ticket. Essentials of a valid acceptance A contract comes into existence when a valid offer is validity accepted. A valid acceptance must be in conformity with the following essentials: Acceptance must be given by the person to whom the offer is made An offer can be accepted only by the person to whom the offer is made, no one else can accept the offer. in simple words, if A intend to contract with B and therefore makes an offer to B, C cannot intervene and accept the offer made to B, without the consent of A. In Boulton v. Jones17 it was held that: The offer was made to Brocklehurst and it was not in the power of Boulton to step in and accept and therefore there was no contract. Under a quasi-contract, Boulton can however recover the goods from Jones. Acceptance must be absolute and unconditional The acceptance must be of the whole offer and without any change in the terms of the offer. A conditional or qualified acceptance is no acceptance in the eyes of law. Even a slight deviation from the terms of the offer would make the acceptance invalid. In fact, a conditional acceptance by itself is a counter-offer and not an acceptance. If A offers an article to B for Tsh.1000 the acceptance by B to buy the articles for Tshs.900 is no acceptance in the eyes of law. In the case


(1857) 2 H. and N. 564

of Routledge v. Grant18 A made an offer to B to purchase a house with possession from 25 th July. The offer was followed by an acceptance suggesting possession from 1 st August. To this it was held that: there was no concluded contract. Also, in the case of Hyde v. Wrench19 the defendant offered to sell his farm at 1000 to the plaintiff on June 6. The plaintiffs agent immediately called on the defendant and made an offer of 950 which the defendant wished to have a few days to consider. On June 27 the defendant wrote to say he could not accept the offer of 950. On June 29 the plaintiff wrote accepting the offer of June 6. The defendant refused to sell his land to the plaintiff at 1000. The plaintiff filed a case asking the court to award an order of specific performance. That is, to order the defendant to sell him the farm at 1000. To this the court held that: the plaintiff could not enforce this acceptance because his counter offer of 950 was an implied rejection of the original offer to sell at 1000(of June 6). So when the plaintiff purported to accept the June 6 offer, in fact there was no such offer. Acceptance must be communicated in some reasonable manner, unless the manner is prescribed in the offer itself If the offeror prescribe any particular mode of acceptance would not do. The offer can insist that, the acceptance must be expressed in the mode prescribed by him and if not, the acceptance will not bind him, even though the mode is specified in the offer, acceptance must be communicated in a reasonable manner. The reasonable manner would depend on the fact of each case. As it of was held in the case of Felthouse v. Bindley20where F offered to buy his nephews horse for 30 saying, If I hear no more about it I shall consider the horse is mine at 30. T he nephew did not write to F at all but he told his auctioneer who was selling his horses not to sell that particular horse because it had been sold to his uncle.

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(1828); 4 Bing. 653 (1840); 3 Beav. 334 20 (1862), 11 C.B. (N.S.) 869

The auctioneer inadvertently sold the horse. To this the court held that: F had no right of auction against the auctioneer as the horse had not been sold to F, his offer of 30 not having been accepted. Acceptance must be communicated with reasonable time, unless the time is stipulated in the offer itself If the time of the offer stipulate certain period within which the offer has to be accepted, the acceptance must be affected within the time so stipulated. If the acceptance is not communicated within the time stipulated in the offer it will not bind the offeror since it is not acceptance in the eyes of law. Where no time is specified in the offer for its acceptance, the acceptance must be communicated within a reasonable time. What is a reasonable time would depend on the facts of each case As illustrated in the case of Ramsgate Victoria Hotel Co. v. Montefiore21;whereby on June 8th M offered to take share in R Company. He received a letter of acceptance on November 23rd. He refused to take the shares. To this it was held that: M was entitled to refuse as his offer had lapsed as the reasonable period during which it could be accepted had elapsed. Acceptance may be express or implied It is express when it is communicated by words spoken or written or by doing some required act. It is to be gathered from the surrounding circumstances or the conduct of the parties. In the case of V. Rao v. Rao22 a widow promised to settle some immovable property on her niece if the niece stayed with her in their residence. The niece stayed with her in her residence until her death. To this it was held that: The niece was entitled to the property. Authorities explaining mere mental acceptance A mere mental acceptance can also mean silence as acceptance. Silence usually is not considered as an acceptance even if the offeror states that it is. This rule is intended to protect offerees from being legally bound to offers because they failed to respond. The offeree must say or do something to accept. Silence though golden is not acceptance.
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(1886) L.R. 1 Ex. 109 (1916)30 Mad. 509

Silence by the offeree never amount to acceptance, even if the offeror state in her offer that failure to reply will be considered acceptance. Silence may indicate that the offer was not received or that the offeree gave no thought to acceptance or even to replying. Hypothetical illustrations: H may write a letter to L offering to sell a certain rare book for Tsh.980, adding that unless he hears from L within the next ten days, he will conclude that L has accepted the offer. If L fails to reply, there is still no contract because an offerors assumption is that the offerees silence may be interpreted as an indication of acceptance and this cannot be reasonable. S telephones P and leaves a message on his answering machine. Ill pay Tsh.7000 for your textbook from last semester. Im desperate to get a copy, so I will assume you agree unless I hear by 6:00 tonight. S hears nothing by the deadline and assumes she has a deal. She is mistaken. P neither said nor did anything to indicate he accepted. Nevertheless, silence does constitute to an acceptance in the following situations: The offeree has indicated that silence means assent. For example If you dont hear from me by Sunday, ship the order. The offeree signed an agreement indicating continuing acceptance of delivery until further notification. Book-of-the-month CD of the club members are examples of such acceptances. Prior dealings between the parties indicate that silence means acceptance. For example A fish wholesaler who delivers 30 pounds of fish to a restaurant each Friday for several years and is paid for the fish can continue deliveries with expectation of payment until notified otherwise by the restaurant. The offeree takes the benefit of goods or services provided by the offeror even though he or she (a) has an opportunity to reject the goods or services but fail to do so and (b) know the offeror expects to be compensated. For example, a homeowner who stands idly by and watches a painter who she has not hired mistakenly paint her house owes the painter for the work.


BIBLIOGRAPHY I:BOOKS Cheeseman, H. R., Business Law, 5th Edition Bealty, J. F, Business Law for a New Century, 2000 Mallor, J. P., Business Law, 12th Edition, McGraw Hill Publishers Ltd, North America-New York, 2001 Litka M. P. Et al, Business Law Nisar, A. S, Commercial Law Simplified, Nairobi, 2009 Peel E, Law of Contract in East Africa, 11thEdition, 2003, Thomson Reuters(Legal) Publishers Ltd., 2007 II: STATUTES Law of Contract Act, [Cap 345 Revised Edition 2002] III: CASES Gould v. Could,(1970) 1 Q.B. 275 Patridge v. Critendem,(1968) 2ALLER 421 Fisher v. Bell,(1961) 1 Q.B. 398 Harvey v. Facey,(1893) AC 552 Carlil v. Carbolic Smoke Ball Co., (1893) 1 Q.B. 256 Wilkie v. London Passenger Transport, (1947) 1 All E.R. 258. C.A. Rose & Frank Co. vs. JR Crompton & Brothers Ltd., (1923) 2 K.B. 261 Balfour v. Balfour, (1919) 2 K.B. 571 Fitch v. Snedaker, (1868) 38 N.Y. 288 Powell v. Lee, (1908) 99 L.T. 284 Lalman v. GauriDutt, (1913) 11 All. L.J. 489 Boulton v. Jones, (1857) 2 H. and N. 564 Routledge v. Grant, (1828) 4 Bing. 653 Hyde v. Wrench, (1840) 3 Beav. 334 Felthouse v. Bindley, (1862)11 C.B, (N.S.) 869 Ramsgate Victoria Hotel Co. vs. Montefiore, (1886) L.R. 1 Ex. 109 V. Rao v. Rao, (1916)30 Mad. 509