Contract Law: The Acceptance

The second in this series of articles on the basics of contract law looks at acceptance of an offer. We have already seen in the last article that in order for there to be a valid contract there must be a valid acceptance.

In order for an acceptance to be valid it is important to appreciate that it is a statement of intention to be bound absolutely and unconditionally by the terms of the offer as such the mirror image rule must be adhered to. In the case of simple contracts such as for the purchase of goods this is relatively straightforward i.e. the acceptance must accept all of the terms of the offer.

Consider the following:

  • The acceptance must be unconditional so all of the terms of the offer must be accepted, any attempts to vary the terms will result in a counter offer (see Hyde v Wrench [1840] 49 ER 132).
  • Even ancillary terms should be accepted.
  • Mere enquiries do not count as rejection – in some situations what may seem to be a counter-offer may not actually be deemed as such, it all depends upon how they are worded see Stevenson v McLean [1880] 5 QBD 346.
  • A counter-offer can become a terms of the agreement if it is accepted.
  • Technical counter-offers do not necessarily count as a rejection of the original offer if they are not of importance to the parties.
  • The courts will not allow a party to benefit from both a counter-offer and the original offer.
  • The acceptance can be in any form, although if there is a required form then this must be adhered to.

As with the offer itself the acceptance must also be communicated. Consider the following:

  • The acceptance must be communicated to the offeror.
  • Silence can never amount to an acceptance.
  • A unilateral offer requires no acceptance other than performance.
  • The postal rule – this is an exception to the basic rule of communication of an acceptance, basically when an acceptance is posted this is when the contract is formed and not when the acceptance is received by the offeror.
  • Modern methods of communication these provide a number of further problems. It has been decided that for example telephones are to be treated under the normal rules of communication, but answer machine methods would be down to interpretation by the court. On top of this are emails, faxes, etc which are dealt with under the Distance Selling Directive and E-Commerce Directive, for further details on these see E-Commerce Contract Formation.

In the next in this series of articles I will briefly look at the problems associated with offer and acceptance in contract law.

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