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14 Cards in this Set

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The final and unequivocalexpression of agreement tothe terms of an offer

Thereis no agreement untilthe offer is accepted-acceptanceisthe act with creates the contract

Themoment of acceptance creates a bindingcontract

Essential Elements

1. Acceptancecan be oral, written or implied fromconduct

2. Acceptancemust be clear and unqualifiedandmust exactly match theoffer

3. Acceptancemust be communicated toand received by the party who made the offer (offeror)

4. There must be someact onthe part of the offeree toindicate acceptance

5. Acceptanceis not effective if communicated in ignorance of the offer

The Mirror Image Rule

a contract is only formed when the acceptance matches the offer exactly

Mirror Image Rule example

Neale v Merrett(1930)

FACTS:Thedefendant made an offer to the sell land to the plaintiff for £280Theplaintiff replied by enclosing £80 and promising to pay the balance in fourmonthly installments

COURT HELD:Theproposal for deferred payment was a variation of the terms of the offer. Noacceptance since the normal terms of a contract for the sale of land are thatthe entire price is payable as a single sum at completion. Thereforethe plaintiff’s acceptance was not an unqualified one

Acceptance must be communicated example

Powell v Lee (1908)

Establishedthat acceptance of an offer must be communicated to the offeror by the offereeor an authorized agent. Plaintiffinterviewed for headmaster job, offered job by an unauthorised agent, job wasthen given to someone else. Plaintiffsued for breach of contract

Court held: No contract existed as there hadonly been an unauthorised communication of the school's intention to employ theclaimant

example 2

Yates Building Co. v RJ Pulleyn& Sons (1975)

FACTS:Defendantgave the plaintiff an option to purchase land, stating notice of acceptanceshould be returned by registered post.

Plaintiffreturned the notice of acceptance by ordinary post, Defendant refused thenotice stating: ... the option agreement provides for notice to be sent bya registered or recorded delivery post. Your letter was not so sent...

COURTHELD:Noenforceable contract, was a precise requirement notice had to be sent byregistered or recorded delivery post, plaintiff did not comply

There must be someact onthe part of the offeree toindicate acceptance (example)

Felthousev Bindley (1882)

FACTS:Theplaintiff wrote a letter in which he offered to buy a horse from the defendantstating “if I hear no more about him, I consider the horse is mine at £30 15s”

Thewas no other acceptance of the offer communicated

Thehorse was sold at auction

Theplaintiff sued the defendant for conversion (a tort alleging wrongful disposalof the plaintiff’s property)

Courtheld: No valid contract of sale

Acceptanceis not effective if communicated in ignorance of the offer (example)

Rv Clarke (1927)

FACTS:Thedefendant offered a reward to anyone who found and returned his lost propertyTheplaintiff not aware of the existence of the offer found the property andreturned it to the defendantHesubsequently discovered the existence of the offer and sued for the recovery ofthe reward

COURTHELD: Knowledgeof the offer is required for there to be a valid acceptance, no contract



Postal Rule


A“unilateral contract” can be madewhereby the offerorincludes in the offer a term providing that complete performance or conduct bythe offeree willconstitute complete acceptance

Thereis no need to give advance notice of the acceptance to the offeror

Performance Example

Kennedyv London Express Newspapers (1931)

FACTS:Herethe publishers of an English newspaper offered a free accident insurance schemeto its registered users. Theplaintiff had registered with the newspaper and when her husband was killed bya bus made a claim under the insurance

COURTHELD:Theoffer of the free insurance constituted a unilateral offer to the world atlarge. Registrationby the plaintiff with the newspaper brought a valid contract into existence andthe publishers were legally bound by it

Postal Rule

Acceptanceby letter or telegram. Aoffer normally only takes effect if and when received.

However, an acceptance byletter take place when the letter is posted andan acceptance by telegram takes effect when given to the post office fortransmission

Whereinstantaneous communication is used e.g. telephone, fax or email, acceptancefollows the normal rule and is effective from the date that it is received

Postal Rule Example

Adamsv Lindsell(1818)

Acceptanceoccurs at time and place that it is posted

HouseholdFire Insurance Co. V Grant (1879) Courtheld: Aletter of acceptance sent by post but which never arrived at its destinationcreated a contract

Kellyv Cruise Catering Ltd [1994]

Courtheld: Acontract is completed with acceptance is posted

Electronic Communication

ElectronicCommerce Act 2000 section 21:

Providesthat unless the parties agree otherwise, electronic communication is taken tohave been sent when it enters the recipients mail server

Thusacceptance is complete once it arrives in the other information system

Maymean recipient bound by email that has not been read

Buts.21 only applies when recipient of email has designated email information as ameans of communication