Acceptance

Nature of Acceptance I

An offer must be accepted in order to form a contract. The acceptance must take place while the offer is “live”. The acceptance may be by words, conduct or by other means. The manner of acceptance must be consistent with what the offer contemplates. For example, delivery of the goods in response to a request may constitute a contract. In other circumstances, the offer may require prior communication of its acceptance.

The acceptance must be unambiguous. The response by the person to whom the offer is made must be a clear and unconditional acceptance of the offer. If any new term is introduced, there may be a so called “counter-offer”. This may, in turn, be accepted or ignored by the person who made the original offer.

Acceptance is an unequivocal final agreement to the offer. Any equivocation may be interpreted as a rejection of the offer. Acceptance of a unilateral offer takes place by performance.

Acceptance of an unknown offer cannot form a contract.  The promise or act of the acceptor must be a response to the offer of the promisor.  If there is no request, then the fundamental element of bargain is missing.

Generally, an offer may only be accepted by the person to whom it is made.  The position may be a matter of interpretation in the circumstances.


Nature of Acceptance II

Acceptance is the final, unequivocal agreement to the terms of an offer.  Acceptance may be verbal or by conduct. Communication of acceptance is required in the case of a bilateral contract. In the case of a unilateral contract, the contract may exist once the offeree starts performing in accordance with the unilateral offer.

If the parties conduct themselves on the basis that a contract exists, the courts will attempt to find an “offer” and “acceptance” in the circumstances.  The offer and acceptance may be implied from conduct, even if there is no formal offer and acceptance. The further the parties proceed with the transaction, the more willing the court will be to infer a contract from the circumstances.

Acceptance of an unknown offer cannot form a contract.  The promise or act of the acceptor must be a response to the offer of the promisor.  If there is no request, then the fundamental element of bargain is missing. The coincidental crossing of mutual offers, without reference to each other, cannot constitute a contract.


Counter Offer

An offer is rejected if it is not accepted in full in accordance with its terms.  A new counter-offer may be held to exist. On the other hand, if what is involved is a request by way of clarification of the terms of the offer, it may not revoke the offer or amount to a counter offer.

If a person responds to an offer other than by way of acceptance, the response may be a counter offer. A communication containing a new condition usually amounts to a rejection of the original offer.  However, in some cases, the response may be treated as a request for further information. In this case, the offer would still be regarded as open.

There is a fine line between the two possibilities. The position is interpreted from the perspective of a reasonable person in the shoes of the person to whom the relevant request is made. The relative importance of the “new” or further matter introduced is relevant, in this context.

The counter-offer usually destroys the offer, so that it is no longer capable of acceptance. For example, A offers to sell an item to B for €10. B replies that he would pay €9.  This is a counter offer, rejecting the first offer and there is no contract. It is too late for B to accept the offer of the first price unless A offers it again.


Communication of Acceptance I

If the person to whom the offer has been made, wishes to accept it, he must generally communicate acceptance of the offeror. The offer may state or imply the manner of communication. It may waive the requirement for communication of acceptance entirely.

Sometimes, when one method of acceptances is specified, it is implied that another similarly effective method of acceptance is sufficient.

The person making the offer cannot oblige the person offered to respond. He cannot deem silence to be acceptance. If a person keeps and uses unsolicited goods, there may be an obligation to pay for them under restitution principles. Certain unsolicited goods are deemed to be gifted in certain circumstances under Sale of goods / consumer protection legislation.

The person making the offer is generally legally bound once he learns of the acceptance.  This is when the contract comes into existence.

Where a person acts in reliance on an offer to his detriment, the person making the offer may be bound if he is actually aware of the performance by way of acceptance.  This is so, irrespective of the absence of communication.


Communication of Acceptance II

The general principle is that the contract exists once the communication of the acceptance takes place. Where a person to whom an offer is made is aware that the person offering has not received an attempted communication in acceptance, then he must repeat it.  This may happen where a means of communication breaks down in the course of acceptance.

Where the breakdown in communication is due to the fault of the offeror and the offeree thinks that his communication has gone through, the offeror is bound.  In this case, he is estopped from relying on the non-communication of acceptance.  However, if the acceptance fails to go through without fault, there is no contract, even if the offeree thinks that it has gone through.

It has been said that no universal rule will cover all types of case. Each case must be resolved with reference to the particular facts and intentions of the parties, business practices, and issues as to where risks should lie.

In some cases where notice of acceptance enters the communication system of the offeror but does not reach him, this will be held to be the offeror’s risk.  It is his responsibility to ensure his communication systems operate properly.  If on the other hand, the offeree can tell that the messages have not gone through; the onus is on him to resend.


Postal Rule I

The famous postal rule presumes that an offer is accepted when it is posted.  The rule is presumed to apply when acceptance is to be communicated by post. Acceptance is presumed to take place when the letter is posted.

The rule is presumed to apply only when acceptance is intended, expressly or impliedly, to be communicated by post.  If it is expressed or implied that the acceptance must reach the offeror, then the postal rule does not apply.

The postal rule is a 19th Century rule, reflecting the methods of communication of the era.  Nonetheless, it remains part of contract law.

The postal rule is based in part, on the supposed difficulty of disproving allegations of nonreceipt by the offeror. Formerly, it was common to keep records of the outgoing post. The rule has been criticised as inappropriate to modern circumstances. However, it does ensure a degree of certainty.


Postal Rule II

The postal rule does not apply where some other method of acceptance is required or is expressly or impliedly provided for. If the offer stated that the acceptance must come to the offeror’s attention, or if this is necessarily implied, then the postal rule does not apply as it is inconsistent with actual receipt.

The postal rule may be significant in the context of the place in which the contract is made.  This can be relevant in terms of the place, where proceedings to enforce the contract must be taken whether within Ireland or within particular Circuits or District Court Areas within Ireland.

The postal rule only applies if this position is the actual intention of the parties. If it is expressed or implied that the acceptance must reach the offeror, the postal rule not apply.

Generally, where a method of acceptance is prescribed, it must be complied with. However, even where a particular method of acceptance is prescribed, similar, equivalent methods of acceptance may generally be substituted.  The alternative method of acceptance should be at least as quick and efficient.


Communication of Acceptance Waived

Where it is agreed, expressly or impliedly by both parties that silence constitutes acceptance, then communication of acceptance is not necessary. Such acceptance may be inferred where the act of acceptance is such that it cannot be undone once commenced or given. Where assistance is rendered or services are given at another’s express or implied request, by immediate performance, there is likely to be an implied waiver of the requirement for communication of acceptance.

If the circumstances are such that it is unlikely that a reasonable person would regard the services as free, the commencement and actual performance of services without objection at the express or implied request of the beneficiary, is likely to constitute acceptance, provided there was an opportunity to reject the services.


Inertia Selling

Unless it is waived or specifically not required, communication of acceptance must be made to the offeror. Generally, silence will not amount to the acceptance of an offer. A person cannot generally oblige an offeree to respond, by stipulating that failure to respond is acceptance. This is inertia selling.

Inertia selling is prohibited under Sale of Goods act. Where unsolicited goods are sent to a person who has neither agreed to acquire or return them, the legislation allows two options. If during the six months following receipt, the sender does not take possession and the recipient does not unreasonably prevent him from so doing, they may be treated as gifted.

If the recipient does not wish to wait six months, he may give 30 days’ notice.  This must state where the seller can take possession of the goods within that time and must state that the goods are unsolicited. If the seller does not take possession within the time and the buyer does not unreasonably prevent him so doing, it may be treated as a gift.

It is an offence for a person, not having reasonable cause to believe there was a right to payment, to make a demand for payment for what he knows are unsolicited goods sent to another with a view to his acquiring them.

In limited circumstances, silence may constitute an acceptance. The offeree himself may indicate that he is to be taken to accept, if it does not indicate otherwise. The need for communication of acceptance may be dispensed with, by reason of previous dealings if there is a legitimate expectation that silence constitutes acceptance.


References and Sources

Irish Textbooks and Casebooks

Clark, R. Contract Law in Ireland 8th Ed. (2016) Ch.1

Friel, R. The Law of Contract 2nd Ed, (2000)

McDermott, P.  Contract Law (2001) 2nd Ed (2017) Ch.1

Enright, M. Principles of Irish Contract Law (2007)

Clark and Clarke Contract Cases and Materials 4th Ed (2008)

English Textbooks and Casebooks

Poole, J. Casebook on contract law. (2014) 12th edition

Stone and Devenney, The Modern Law of Contract 10th Ed (2015)

McKendrick, Contract Law 10th Ed (2013)

Chen-Wishart, Contract Law 5th Ed (2015)

Anson, Reynell, Beatson, J., Burrows, Cartwright, Anson’s law of contract. 29th Ed (2010)

Atiyah and Smith, Atiyah’s introduction to the law of contract. 6th Ed.

Chen-Wishart, M. (2015) Contract law. 5th Ed.

Cheshire, Fifoot and Furmstons, Furmstons and Fifoot Cheshire, Fifoot and Furmston’s law of contract. OUP.

Duxbury, Robert (2011) Contract law. 2nd Ed.

Halson, Roger (2012) Contract law. 2nd Ed.

Koffman & Macdonald’s Law of Contract. 8th Ed. (2014)

O’Sullivan, Hilliard, The law of contract. 6th Ed. (2014)

Peel, and Treitel, The law of contract. 13th Ed. (2011).

Poole, J.Casebook on contract law. 12th Ed. (2014).

Poole, J.  Textbook on contract law. 12th Ed. (2014)

Richards, P Law of contract. 10th Ed. (2011)

Stone, R.  The Modern law of Contract. 10th Ed. (2013)

Treitel, G. H.  An outline of the law of contract. 6th Ed (2014).

Turner, C Unlocking contract law. 4th Ed. (2014).

Upex, R. V., Bennett, G Chuah, J, Davies, F. R. Davies on contract. 10th Ed. (2008).

UK Casebooks

Stone,Devenney, Text, Cases and Materials on Contract Law 3rd Ed (2014)

McKendrick, Contract Law Text, Cases and Materials 6th Ed (2014)

Stone, R, Devenney, J Cunnington, R Text, cases and materials on contract law. 3rd Ed (2014)

Burrows, A. S.  A Casebook on Contract. 4th Ed.

Beale, H. G., Bishop, W. D. and Furmston, M. P. Contract: cases and materials. 5th ed. (2008)

Blackstone’s Statutes on Contract, Tort & Restitution 2017 (Blackstone’s Statute Series)

UK Practitioners Texts

Chitty on Contracts 32nd Edition, 2 Volumes & Supplement (2016)

The above are not necessarily the latest edition.