UNIVERSITY OF THE WEST INDIES

FACULTY OF LAW

LAW 1410 CONTRACT LAW I

SEMESTER II (2020)
Worksheet 3

ACCEPTANCE

A. REQUIRED READNG

1. Gilbert and Maria Kodilinye, Commonwealth Caribbean Contract Law,

Routledge (latest edition)
2. Cheshire Fifoot Furmston, Law of Contract, Oxford Publishing (latest edition)
Electronic Location:
http://catdir.loc.gov/catdir/toc/fy13pdf01/2012941006.html
3. J Smith and J Thomas, Casebook on Contract, Sweet and Maxwell (latest
edition)
3. Jill Poole, Casebook on Contract Law, Oxford Publishing (latest edition)
4. Jill Poole, Textbook on Contract Law, Oxford Publishing (latest edition)

B. CASES

Adams v Lindsell (1818) 1 B & Ald 681

Brinkibon Ltd v Stahag Stahl [1983] AC 34
Brogden v Metropolitan Ry Co (1877) 1 QB 256
Butler Machine Tool Co Ltd v Ex-‐Cell-‐O Corp Ltd [1979] 1 All ER
965 Byrne v Van Tienhoven (1880) 5 CPD 344
Carlill v Carbolic Smoke Ball Co [1893] QB 256
Entores Ltd v Miles Far East Corp [1955] 2 QB 327
Felthouse v Bindley (1862) 11 CBNS 869 Holwell
Securities v Hughes [1974] 1 All ER 161
Household Fire and Carriage Accident Insurance Co Ltd v Grant (1879) 4 Ex D 216
Hyde v Wrench (1840) 49 ER 132
Powell v Lee (1908) 99 LT 284
R v Clarke (1927) 40 CLR 227
Tinn v Hoffman & Co (1873) 29 LT 271

C. INTRODUCTION

What is it?

Acceptance means acceptance of an offer by the offeree agreeing to all the terms
of the offer. Acceptance must be final and unqualified. This means that there
must be a perfect match between what has been offered and what is being
accepted. Where an offer is accepted with modifications, the ostensible
 acceptance cannot amount to a valid acceptance - Hyde v Wrench

An offer cannot be accepted unless it has been communicated to the offeree. In

other words, the offeree must be aware of the offer at the time of his or her
acceptance - R v Clarke

Silence?

Acceptance too must be communicated. In most circumstances, silence does not

amount to acceptance - Carlill v Carbolic Smoke Ball Co .

Usually, only the person to whom the offer is made can accept.

Whether or not there has been acceptance is judged by an objective standard. As

with offers, there are many ways of framing the applicable test. For our
purposes, we can ask whether a reasonable person, who happened to have been
present when the purported agreement was reached, would have concluded that
the offeree had accepted the offer, even if the offeree had not meant to accept.

D. ACCEPTANCE

Generally, only the person to whom an offer is made is capable of accepting it.

- Cross offers: Tinn v Hoffman & Co;

- Counter Offers : Hyde v Wrench;
- ‘battle of the forms’ : Butler Machine Tool Co Ltd v Ex-‐Cell---O Corp Ltd.

Communication of acceptance

It must be communicated. The position is the same regarding offers, revocation of

offers and rejection of offers. There can be no acceptance ‘where a person writes an
acceptance on a piece of paper which he simply keeps; where a company resolves to
accept an application for shares but does not communicate the resolution to the
applicant, where a person decides to accept an offer to sell some goods and instructs
his bank to pay the offeror but neither he nor the bank gives notice of this fact to the
offeror; and where a person communicates his acceptance only to his own agent’.
(exceptions will be discussed in Contract II)

- Felthouse v Bindley (does silence amount to acceptance?)

- Carlill v Carbolic Smoke Ball Co (can you waive the need for communication)
- Brogden v Metropolitan Ry Co (must it be communicated orally or in writing or
can it arise from conduct? )

Acceptance by a third party

 It is further possible that communication of acceptance can be performed by
someone other than the offeree. 1 However, for acceptance to be valid in such
circumstances, it must have been authorised by the offeree - Powell v Lee

Acceptance by prescribed mode

Where the offeror indicates that communication of acceptance must be

performed in a particular manner, then, in order to be effective, the acceptance
must be made in that particular manner - Holwell Securities v Hughes

Where the offeror has stipulated a mode of communicating acceptance but has
failed to stipulate that this is the only mode, then an offeree is entitled to accept
the offer in a mode that is either equally as efficient or more efficient than the
stipulated mode. Thus, if an offeror asks for acceptance to be communicated by
post and the offeree responds by fax or telephone call, the acceptance may
still be valid as it involves a faster mode than sending a letter by post- Tinn v
Hoffman & Co.

Acceptance by telephone, telex or fax

- Entores Ltd v Miles Far East Cor;

- Brinkibon Ltd v Stahag Stahl (sometimes, instantaneous forms of
communication such as fax, do not result in instantaneous communication eg.
when messages are sent out of business hours, leaving the messages stored
until the recipient receives them.

Acceptance by post or telegram

Acceptance may be transmitted by post, either when this is the prescribed mode
of communication or when it is reasonable, in the circumstances, to
communicate acceptance by post. According to the ‘postal rule’, acceptance by
post becomes effective as soon as the letter of acceptance is inserted into the
postbox or is put in the control of the post office, for instance by handing in the
letter at a post office counter. This is in contrast to instantaneous forms of
communication where acceptance is only effective when the acceptance is
received by the offeror.

- Adams v Lindsell;
- Household Fire and Carriage Accident Insurance Co Ltd v Grant (note the
dissenting arguments that the postal rule should be dispensed with vs the
arguments for)

The postal rule also applies to acceptance by telegram, as well as courier services
that perform the same function as a post office. Note that the postal rule only
applies to acceptance and not, for instance, to revocation of offers which must, in
any case, reach the offeree in some form - Byrne v Van Tienhoven

Acceptance by email

1
someone other than the offeree;
Acceptance by email could be considered as analogous to situations of
instantaneous communication, in which case acceptance would only become
effective once the email was received by the offeror. On the other hand,
acceptance by email could be viewed along the lines of the postal rule, in which
case the acceptance would become effective as soon as the ‘send’ button was
pressed.

The postal rule was established as an exception to the normal rule that
acceptance must be communicated to the offeror. Amongst the reasons why the
postal rule was established was the delay involved in postal transit, as well as the
fact that the offeree cedes control of the acceptance letter to the post office.
These reasons do not seem to apply to email communications, which are near
instantaneous and allow an offeree to confirm whether a message has been
delivered to an offeror, for instance by way of delivery notification.

Nowadays, these situations are usually governed by statutory provisions, such as the
Electronic Transactions Act of Barbados, Cap 308B. Similar or near identical acts
exist in many other jurisdictions.

“receipt occurs when the electronic record enters an information-‐processing

system of the addressee” (s 16).

Put another way, acceptance does not occur when the message leaves the sender’s
information-‐processing system (such as the offeree’s email server) but rather when
it is delivered to the recipient’s information-‐processing system. In practice, this
means that where the offeror has stipulated a particular information-‐processing
system, such as Gmail, then the acceptance becomes effective as soon as it is
delivered to Gmail, rather than when the offeror actually opens his or her emails. If,
however, the offeror has not stipulated a particular information-‐processing system
and the offeree sends an acceptance by email to an email address which is
associated with the offeror, acceptance will only become effective once the offeror
actually opens the acceptance email.

E. TUTORIAL QUESTIONS

(1) Must acceptance be personally communicated to the offeror?

(2) What is the ‘postal rule’? Do you agree with it? Are there alternatives?

(3) Why was the postal rule not applied in Holwell Securities Ltd v Hughes?

(4) Why do you think there is a difference in the treatment of acceptance by

telex and telegram?

(5) When does acceptance by email become effective?

(6) In your opinion, should the postal rule apply to acceptance by email?

(7) “The offeror is the

boss.” Discuss.
(8) On 1 January 2015, Pat verbally offers to sell his car to Maria for $10,000.
He stipulates that the offer must be accepted in writing.

Does a valid contract come into existence in the following scenarios?

(a) Maria calls Pat on 2 January and says that she accepts his offer.

(b) Maria posts her acceptance by post on 3 January 2015, but the letter
never reaches Pat as it is lost in the post.

(c) Maria posts her acceptance by mail on 3 January 2015, but the letter
never reaches Pat as she has put down the wrong address.

(d) Maria posts her acceptance by email on 4 January 2015. She uses an
email address for Pat which she found on the internet. The email is
immediately delivered to Pat’s email server. On 5 January, Mary finds out
from John that Pat has sold the car to someone else. Pat only opens Maria’s
email on 7 January.

Would your answer be different in any of the above scenarios if Pat had
stipulated that acceptance must reach him.