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Acceptance - Lecture handout

Contract law (University of London)

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M. Awais Ikram
Contract Law 2020-21
University College Gujranwala
ACCEPTANCE

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ESSENTIAL READINGS:
Chapter 2 Study Guide, University of London
Chapter 3 McKendrick, Contract Law (Palgrave Macmillan Law Masters, 11th edition, 2015)
(Section 3.7 – 3.13)
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Acceptance

Acceptance: unqualified expression of assent to the terms proposed by the offeror.

Acceptance may be made by words or conduct. Conduct will only amount to an acceptance if it is
clear that the offeree did the act in question with the intention, objectively assessed, of accepting
the offer.

Counter-Offer

A purported acceptance which does not mirror the terms of the offer is not an acceptance but a
counter-offer. Counter-offer 'kills off' the original offer.

Hyde v Wrench [1840] 3 Beav 334

Butler v Ex-Cell-O Corporation (England) Ltd [1979] 1 WLR 401

Brogden v Metropolitan Railway Company [1877] 2 App Cas 666

Communication of Acceptance

General rule: Acceptance must be communicated to the offeror (see also the ‘Postal Rule’, which
is an exception to this principle).

Entores v Miles Far East Corp [1955] 2 QB 327

Where an offeror prescribes a specific method for acceptance, the general rule is that he will only
be bound if that method is followed.

What if the acceptance is made in a form which is no less advantageous than the form
prescribed by the offeror?

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 lOMoARcPSD|1317039

M. Awais Ikram
Contract Law 2020-21
University College Gujranwala
Manchester Diocesan Council for Education v Commercial and General Investments Ltd. [1969]
3 All ER 1593

Acceptance in ignorance of Offer

Can a person accept an offer who is:

i. Ignorant of the offer.

ii. Does not have the offer in his mind at the time of performance.

Gibbons v Proctor [1891] 64 LT 594

R v Clarke [1927] 40 CLR 227

What if a person doing the act required for acceptance does it for a motive other than
accepting the offer?

Williams v Carwardine [1833] 4 B & Ad 621

Acceptance by Silence

The general rule is that acceptance of an offer will not be implied from mere silence on the part of
the offeree.

Felthouse v Bindley [1862] 11 CB (NS) 869

See also: The Hannah Bluementhal [1983] 1 AC 834

What is the rationale behind this rule? What if the offeree assumes his reliance has been
effective to conclude the contract and acts in reliance on that?

Exception to the rule requiring communication of acceptance

(a). The Postal Rule

When does the postal rule apply?

Adams v Lindsell [1818] 1 B & Ald 681

Household fire insurance v Grant [1879] 4 Ex D 217
Henthorn v Fraser [1892] 2 Ch 27
Holwell Securities Ltd v Hughes [1974] 1 WLR 155

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 lOMoARcPSD|1317039

M. Awais Ikram
Contract Law 2020-21
University College Gujranwala

i. What if the letter gets lost in the post?

ii. What if the acceptance is posted but a rejection is sent by a quicker method?

Countess of Dunmore v Alexander [1830] 9 S 190

What about e-mail, fax, telex etc?

(b). Acceptance in Unilateral Contracts
Unilateral contract is a contract whereby one party promises to pay to the other party a sum
of money or to do some other act if the other party will do or refrain from doing something
without making a promise to that effect.
In unilateral contracts, acceptance can be made by fully performing the requested act and
there is no need to give advance notification of acceptance.

Carlill v. Carbolic Smoke Ball Co. [1893] 1 QB 256

When can the offer in a unilateral contract be revoked?

Daulia Ltd v Four Millbank Nominees Ltd [1978] Ch 231

Errington v Errington [1952] 1 KB 290
Luxor (Eastbourne) Ltd v Cooper [1941] AC 108

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