Acceptance

1. Definition: section 2(b)

When the person to whom the proposal is made signifies his assent thereto, the proposal is said to be accepted. A proposal, when accepted, becomes a promise. Acceptance is therefore the final and unqualified expression of assent to the terms of an offer. Once it is complete, neither party can withdraw without liability (subject to the timing rules in ss.4 and 5, covered in the note on communication and revocation).

2. Rules of a valid acceptance

• Absolute and unqualified, s.7(1).
• Expressed in some usual and reasonable manner, unless the proposal prescribes the manner, s.7(2).
• Communicated to the proposer; a mental resolve to accept is not enough.
• By the person to whom the offer was made. In Boulton v. Jones (1857) an order addressed to Brocklehurst was fulfilled by Boulton, who had bought the business; Jones, who had dealt with Brocklehurst to set off a debt, was not bound.
• Made while the offer is open: before it lapses or is revoked (s.6).
• With knowledge of the offer.
• Silence is not acceptance.

3. Absolute and unqualified: the mirror-image rule

The acceptance must mirror the offer. Any variation, however slight, is not an acceptance but a counter-offer, and a counter-offer rejects the original offer. In Hyde v. Wrench (1840) Wrench offered his farm for £1,000. Hyde replied offering £950. Wrench refused. Hyde then wrote accepting £1,000. Held, no contract: the counter-offer of £950 killed the original offer, which could not be revived by a later acceptance.

A mere request for information is different. In Stevenson, Jacques & Co. v. McLean (1880) an offeree asked whether delivery could be spread over two months; this was an inquiry, not a counter-offer, and the offer remained open for acceptance.

Acceptance “subject to contract” or “subject to approval of title” is usually conditional and does not conclude a contract until the condition is satisfied. But if the parties have agreed on all essential terms and merely intend to record them later in a formal document, the contract is already made (see Trimex, in the note on e-contracts).

4. Manner of acceptance: section 7(2)

If the proposal prescribes a manner and the acceptance is not made in that manner, the proposer may, within a reasonable time after the acceptance is communicated to him, insist that it be made in the prescribed manner. If he does not do so, he is taken to have accepted the acceptance. This differs from English law, where a departure from a prescribed manner simply fails as an acceptance.

5. Acceptance by conduct: section 8

Performance of the conditions of a proposal, or the acceptance of any consideration for a reciprocal promise offered with a proposal, is an acceptance of the proposal. This is how general offers are accepted (Carlill v. Carbolic Smoke Ball Co., 1893), and also how ordinary transactions are concluded without words: a person who takes goods sent on approval and uses them, or who boards a bus and sits down, accepts by conduct. In Brogden v. Metropolitan Railway (1877) a draft agreement was never signed, but both sides traded on its terms for years; the House of Lords held a contract had been concluded by conduct.

6. Silence is not acceptance

In Felthouse v. Bindley (1862) an uncle wrote to his nephew offering to buy his horse for £30 15s, adding, “If I hear no more about him, I consider the horse mine.” The nephew did not reply, but told the auctioneer to keep the horse out of a sale. The auctioneer sold it by mistake. The uncle sued the auctioneer in conversion. Held, the uncle had no title, because there was no contract: the nephew had never communicated acceptance, and an offeror cannot impose a contract by announcing that silence will be taken as consent.

Silence may amount to acceptance where there is a duty to speak, or a past course of dealing in which silence was understood as assent.

7. Acceptance in ignorance of the offer

Since acceptance is assent to an offer, a person who does not know of the offer cannot accept it. In Lalman Shukla v. Gauri Dutt (Allahabad High Court, 1913), Gauri Dutt’s nephew went missing. He sent his servant Lalman to search for the boy. After Lalman had left, Gauri Dutt announced a reward of Rs 501 for whoever found him. Lalman found the boy and brought him back. Later he learned of the reward and claimed it. Held, he could not recover: he did the act without knowledge of the offer, and so could not have accepted it. The same reasoning explains why cross offers produce no contract.

8. Problem

A offers to sell his car to B for Rs 3 lakh. B replies, “I accept, provided you include new tyres.” A refuses. Next day B writes, “I accept your offer of Rs 3 lakh.” A has meanwhile sold the car to C. Can B sue A?

Issue. Whether B’s conditional reply was an acceptance, and whether B could later accept the original offer.

Law. Acceptance must be absolute and unqualified (s.7(1)). A qualified acceptance is a counter-offer that rejects the original offer, which cannot then be accepted: Hyde v. Wrench.

Application. “Provided you include new tyres” adds a term A had not offered. It is not an inquiry but a new proposal. It was refused. The original offer had already been destroyed by the counter-offer, so B’s second letter was at most a fresh offer, which A never accepted.

Conclusion. No contract was concluded between A and B. A was free to sell to C, and B has no claim.

How this is examined

As an essay: “What are the essentials of a valid acceptance?” or “Acceptance must be absolute and unqualified. Explain.” Give s.2(b), then the rules with a case for each: Hyde v. Wrench, Felthouse v. Bindley, Lalman Shukla, Boulton v. Jones. As short notes: counter-offer, acceptance by conduct, or Lalman Shukla. Problems usually test the counter-offer and reward-in-ignorance situations, answered as above.