The general rule is that acceptance must be communicated.
The plaintiff, based in London, sent an offer by telex to purchase copper cathodes from the defendant, based in Amsterdam. The defendant accepted by telex.
A jurisdictional issue arose and it had to be established where acceptance had occurred.
The court looked at the formation of the contract and established the principle that acceptance must be communicated.
Suppose, for instance, that I shout an offer to a man across a river or a courtyard but I do not hear his reply because it is drowned by an aircraft flying overhead. There is no contract at that moment. If he wishes to make a contract, he must wait till the aircraft is gone and then shout back his acceptance so that I can hear what he says. Not until I have his answer am I bound....
An offeror may stipulate the mode of communicating acceptance. If so, the offeree must comply or use an equally effective method.
Tinn v Hoffman & Co. (1873) 29 LT 271
In a letter, the defendant offered to sell the plaintiff iron and requested reply
by return of post.
Did acceptance have to be by post?
Honeyman J: An equally expeditious method will suffice, such as a telegram or even a verbal message.
Yates Building Co. Ltd v RJ Pulleyn & Son (York) Ltd (1975) 237 EG 183
The defendant gave the plaintiff an option to purchase building land, stating notice of acceptance should be returned
by registered or recorded deliverypost between certain dates.
The plaintiff returned a notice by ordinary post but within the time limit.
The defendant, refused the notice stating:
You will recall that clause 2 of the option agreement provides for notice to be sent by a registered or recorded delivery post. Your letter was not so sent....
Was the acceptance sufficient?
There was no enforceable contract. There was a precise requirement that the notice had to be sent
by registered or recorded delivery postand this was not complied with.
An equally effective method will not suffice if the offeror has made clear a particular method is required.
Sometimes a third party may purport to accept an offer.
Powell v Lee (1908) 99 LT 284
The plaintiff applied for a job as a headmaster.
A third party at the school, informed the plaintiff he had been appointed, without authority to do so.
Can a third party communicate acceptance?
A communication of acceptance to the offeror will only be effective if it was made by an authorised third party.
The general rule is that silence and mere inactivity do not constitute acceptance.
Therefore, an offeror cannot say that unless the offeree communicates a rejection he will be deemed to have accepted it. The onus should be on the offeree to communicate if he wishes to accept, not if he wishes to reject the offer.
The plaintiff wanted to purchase a horse from his nephew. The horse was due to be sold at auction by the defendant.
The plaintiff, in repesponse to a letter from his nephew about the sale, replied:
If I hear no more about him, I consider the horse mine at £30 and 15s.
The nephew did not reply but told the defendant not sell the horse. Accidently the defendant sold the horse.
In order to sue the defendant, under tort law, the plaintiff was required to show that the horse was his property.
The defendant argued there was no contract between the plaintiff and his nephew as there was no acceptance communicated.
Was the nephew's silence capable of being acceptance of the plaintiff's offer?
There was no binding contract. The plaintiff could not impose the offer upon his nephew and require him to reject it. It was clear that the nephew intended to sell to the plaintiff however, he had not communicated this intention or done anything to bind himself.
The decision in has been criticised because the nephew was not an unwilling offeree, needing to be protected by the rule that mere silence is not consent. Furthermore, he had indicated that he accepted the plaintiff's offer by telling the defendant not to sell the horse. However, the case has not been overruled.
A case involving a dispute over tax.
The question of whether silence could constitute acceptance featured but was not essential to the decision in the case.
Gibson LJ obiter:
Where the offeree himself indicates that an offer is to be taken as accepted if he does not indicate to the contrary by an ascertainable time, he is undertaking to speak if he does not want an agreement to be concluded. I see no reason in principle why that should not be an exceptional circumstance such that the offer can be accepted by silence....
An offer of a unilateral contract to the public at large can be worded to waive the need to communicate acceptance prior to a claim.
The defendant placed an advertisement stating:
£100 reward will be paid by the Carbolic Smoke Ball Company to any person who contracts the influenza after having used the ball three times daily for two weeks according to the printed directions supplied with each ball... £1000 is deposited with the Alliance Bank, showing our sincerity in the matter....
The plaintiff made a claim for the reward but it was refused. The defendant argued, among other things, that the the plaintiff had not communicated notice of her acceptance.
Had the plaintiff accepted the offer?
Although, an offer must usually be addressed to specific person or class of persons, the advertisement was being made to anyone who met the criteria set out and this was sufficient. Furthermore, the wording of the advertisement meant the plaintiff did not have to communicate acceptance, as clearly the defendant did not expect every customer to contact them on purchasing the item, rather only those who used the product as directed and then caught influenza.
Acceptance was by conduct and did not need to be communicated prior to the claim.
The postal rule creates another exception to the rule, by stating that acceptance is complete on posting.