Acceptance

An acceptance is a final and unqualified assent to all the terms offered. Just as in the case of
offers, there are certain rules outlined in relation to acceptances:
- The acceptance must be communicated from the offeree to the offeror
- The acceptance must be in response to an offer. One cannot accept an offer that they are
not aware of.
- The acceptance must be made while the offer is still in force. This means that it cannot be
made after the offer is terminated.
- The acceptance may be expressed or it may be implied by the conduct of the offeree.
Communication of the Acceptance
The general rule is that the acceptance of an offer must be communicated to the offeror. There
must be a meeting of the minds. It is also necessary to communicate an acceptance, because it
would be unfair for an offeror to not know of the intentions of the offeree. The offeror must
understand the intentions of the offeree. It can create a great deal of hardship for the offeror if he
is bound to a contract without knowing that his offer was accepted. In that regard, there can be
no contract, where the offeree does not communicate or create acceptance.
A contract can be effective if the acceptance is communicated through an agent who is
authorised to make the communication. See Weatherby v Banham 1832. Note that a person, who
may communicate acceptance, can be an agent of the offeror but does not have the authority to
do so. If this is the case, then the acceptance may not be communicated and the contract may not
be effective.
The general rule is that the communication of an acceptance must be done to the offeror. See
Entores v Miles Far East Corporation 1955. The general rule is that words of acceptance must
not only be spoken, but they must be communicated. Therefore, if words of acceptance are
drowned by noise, the offeree must repeat.
Exceptions to the General Rule
There may be some exceptions to this rule, such as the postal rule and the communication to the
offeror’s agent. In such circumstances, where there is communication to the offeror’s agent,
communication takes effect when it reaches offeror’s the agent, if the agent has the authority to
receive the said communication. Where an agent is merely passing on a message, it does not
amount to the communication of an acceptance. See Henthorn v Fraser.
Another exception would be where the conduct of the offeror directly obviates the need for the
rule, for example, if it were the fault of the offeror that he did not get the communication, then he
cannot deny acceptance. See Entores v Miles Far East Corporation.
A third exception would be if the offer waives the requirement for the communication of
acceptance, then the said acceptance is not necessary. See Carlill v Carbolic Smoke Ball
Company, where the conduct of purchasing the smoke ball constituted the communication of
acceptance.
Where acceptance is made by post, communication occurs when the letter of acceptance is sent.
See Adams v Lindsell. This rule applies even if the acceptance letter never reaches the offeror or
even if the offeror is ignorant of the acceptance being posted. This postal rule was created for
business efficacy. It also prevents the offeree from speculating about the offer and posting an
acceptance and then withdrawing by a speedier form. Another reason would be that the offeror
himself will not be prejudiced by loss or delay of the mail, since he is expecting a response and
will be prudent enough to check for it. Also, if the offeror specifies acceptance by post, it is
permissible then he should bear the risk of the mail being lost or delayed. See Henthorn v
Fraser.
To avoid the postal rule, one may clearly request the acceptance of an offer by different means
which may be speedier. See Holwell Security Ltd v Hughes.
Is it possible to revoke or retract an acceptance by post? See Countess of Dunmore v Alexander
1830 where it was said that it may be possible to revoke the acceptance, if the offeror is not
disadvantaged by the communication.
The rule of communicating acceptance does not apply to instantaneous communication such as
telex, telephone, fax, or emails. The courts’ view is that when the communication of acceptance
is received, and not posted, by the offeror, the communication then takes place. See Entores Ltd
v Miles Far East Corporation.
See instantaneous communication for assessment
It should be noted that no contract is created in the written form if the offer differs significantly
from what was agreed to in the oral communication. See Jayaar Impex Ltd. v Toaken. For
example, there will be a significant difference if the oral offer mandated ‘three months to pay’
and the written agreement specified that payment must be made on demand. Minor changes may
not affect the original agreement.
If there is evidence that a driver intended to insure with another company, then there is no
agreement. See Taylor v Allen 1966.
Acceptance by conduct may be difficult to prove, but there may be cases where one might claim
that there is no agreement, because of the conduct of the parties. In such cases, the court has
powers to resolve uncertainties, for example, if an offer is silent on a term as to the price for the
item or a rate of payment, the courts may imply a reasonable term and an amount to be paid. The
courts may even import a term from another contract between the said parties or a term that is in
a draft agreement to resolve the uncertainties. See Pyrene Company Ltd v Scindia Navigation
Company Ltd.
Referential Bids
Referential bids are bids that undertake to pay a fixed sum or a specified amount in excess of a
bid previously made by another person. The question is, therefore, do referential bids amount to
acceptances? In Harvela Investments Ltd v Royal Trust of Canada Ltd, the House of Lords ruled
that a referential bid defeated the purpose of sending or submitting confidential bids. To
determine what was the highest bid meant that each person is desirous of paying a certain
amount. The court felt that it was not allowed when requesting the highest bid. The House of
Lords’ decision made it clear that referential bids were not allowed in tender-oriented situations
and that they do not constitute acceptance to an offer.
In certain other circumstances, submission of tenders amounts to an offer, for example, tenders
submitted for the construction of buildings, acceptance by the employer takes place immediately
when the bid is submitted unless it is stipulated in the invitation that no contract is realised until
formal documents are executed. Generally, when a tender is submitted, the person inviting the
tenders may encourage others involved to buy tender documents. The tender documents may
specify that if one’s bid is successful, a contract will be effected. In the absence of this, the
understanding is that when the bid is submitted, which may either be the highest or the lowest,
acceptance is reached when the person inviting the tenders determines the highest bid. See
Percival v London County Council Asylum 1918.
Acceptance must be Unqualified
This requirement, however, does not mean that there must be precise correspondence with all of
the terms of the offer. Acceptance may be effected even where there is slight variation from the
terms of the offer. The variation must not be significant. The courts may infer certain terms
where terms are not clearly specified. An unqualified acceptance of the term of an offer does not
mean that it must be accepted verbatim. The idea is that the spirit and intent of the offer must be
accepted by action or conduct of the offeree. See Lark v Outhwaite 1991 and Global Tankers
Inc. v Amercoat Europa 1975.
Battle of Forms
The battle of forms is a concept that envisages situations where conflicting communication arises
as to the acceptance of terms, for example, where each party attempts to contract using their own
terms and conditions. When situations concerning the battle of forms arise, there are often
problems for the parties to determine the terms upon which the contract is to be effected. The
courts may become involved and offer an array of remedies, which may include the rectification
of contracts or the ‘last shot doctrine’ which suggests that the last offer which was made would
be the last one that would be accepted by the offeror. See British Road Services v Arthur
Crutchley & Company Ltd 1967 and Butler Machine Tool Company Ltd. v Ex-Cell-O
Corporation 1979 1 WLR 401.