Contract Law - Acceptance Part 1

[Music] welcome to Lawson's I am Jennifer Hudson in this law session we will consider acceptance and we will also consider certainty of terms and the intention to create legal relations all in this session in the previous lecture I looked at offer and I also drew a distinction between an offer and an invitation to treat and just by way of background what contract law is so this lecture is somewhat of a continuation to that now once you have an offer that has been accepted a binding contract is made and of course that ends the offer so acceptance together with the offer amounts to a an agreement now try to defines acceptance as a final unqualified expression of assent to all of the terms of an offer now acceptance is subject to an objective test which is very similar to offers which also require an objective test so it similarly here applying the same manner so in other words evidence must be produced from which the courts can induce that an intention by the offeree to accept the offer communicated to them you must show that in the context of an offer and acceptance situation now two principles which evolved from the definition of acceptance and the requirements of this objective existence are first of all the expression of an intention to ascend to the offer must be there as seen in the case of Taylor and Laird and it must be in response to the offer and it must match the terms of the offer precisely now the acceptance must be unequivocal and unconditional because if it is an equivocal acceptance or if the response is equivocal or if there is a condition attached as we will see later that will not amount to an acceptance rather it may very well have the effect of either getting rid of the offer or just having no effect at all on the offer the second of course is that simply acknowledging the offer is not enough there must be a communication of the acceptance to the offer or now a counteroffer amounts to a rejection of the original offer and this is what I was alluding to earlier so in hi Dan drench the defendant had made a written offer to sell his farm to the plaintiff for a thousand pounds now this is back in 1840 now the plaintiff reply that he would give him nine hundred and fifty pounds for it now the defendant refused to sell at the lower price and a few days later the plaintiff wrote to him saying well I am agreeing now so the defendant wrote to the the plaintiff wrote the defendant agreed to pay a thousand pounds for the property by that time of course the defendant had decided he didn't want to sell any more so he withdrew his original offer he refuses to sell to the plaintiff and the court said that there was no contract the plaintiffs counteroffer of nine hundred and fifty pounds was a rejection of the defendants original offer and brought it to an end it could not be revived afterwards by the plaintiff simply purporting to accept it how this translates on an exam generally of course is that the examiner will write will say something like X is selling his computer and X tells Y that he's selling the computer for a thousand pounds the examiner will then of course put in a sort of chain of events which show that why for example responded to X and said something along the lines of I've got 950 pounds but you have to watch exactly the words used in the exams now one of the important things as I've mentioned before in the previous lecture is that it is for you to determine what the status of each communication is never leave it to the examiner to tell you what it is so the examiner might say X is cell is computer for a thousand pounds Paul accepted and said said that he will give him nine hundred and fifty pounds well that isn't an acceptance because that's not what it was being sold for so what you need to do is look at what it is and then of course explain it to the extent that what we see from the offeree is potentially a counteroffer it may very well as later on when we come to it it may very well be that um they offer he writes back and says to X um would you be willing to accept to check post-dated checks well it will be for you to discuss whether that is a counteroffer or as we'll see later if it could be of some other type of status now then there are situations where the offeree does not put forward a new proposal but merely seeks clarification of the offer or he seeks further information about it from the offer or in such a case the offers not to be regarded as rejected and it is still open for the offeree to accept it now this of course could this can be seen in the case of Stevenson and MacLean and the idea is that Stevenson McLean stands for the proposition that if it is that the offer E is simply asking a question then this will not have they hide and rench effect of killing off the original offer so what you need to do is to look but what the examiner said to you and determine is it an acceptance or is it a counteroffer if it is that it is and well if it is it an acceptance based on the fact that he is simply requesting information then it will not amount to a counteroffer so if the examiner were to give you a scenario whereby he says that X offers his computer to Y for a thousand pounds Y wrote back saying I would not be able to buy it unless I am able to pay for it three months from now you have to watch that very carefully because if he's saying it wouldn't be able to buy it otherwise that may very well be a counteroffer but if he said would you be willing to accept two payments that may be a stevenson & mclean situation because he's not suggesting that he can't buy it he's asking maybe looking for a good deal in terms of keeping his money is whether or not he may consider to payments but what you need to do is to discuss it and then you need to make submissions remember that in law there is no right or wrong answer what needs to be right is the rule that you're using the principle you're using must be right but as to the outcome it is entirely what you suggest it is now in a unilateral contract the offeree signifies acceptance by conduct so performance of the act or the conditions stipulated in the offer that will amount to acceptance so in Carlisle and carbolic smoke ball the court rejected the argument that a plaintiff failed to notify the defendant company offer acceptance of their offer before using a product the court said that she accepted by buying the smoke ball and using it as instructed and by claiming the reward after catching influenza she was entitled to succeed now in a bilateral contract acceptance may be signified by words or documents or by the conduct of the parties weather and offers unilateral or bilateral may be a matter of debate and it should not be supposed that the distinction is unproblematic we have seen cases where this has caused some problems one of course that I would flag up is Brogden and Metropolitan Railway Company and 1877 case now Brogdon had supplied the Metropolitan Railway Company with coal for some years without any formal agreement while the parties decided to formalize their transactions and the Metropolitan Railway company sent Brogdon a draft agreement Brogdon completed certain details in the draft which had been left blank including the name of an arbitrator B then signed it Sbrocco and signed it and he wrote approved and returned it to the Metropolitan Railway Company the manager got it and placed it in his desk nothing further was done formally with the document but for some time after that of course the parties acted in accordance with the arrangements by mr. Brogdon supplying the coal and the Metropolitan Railway Company paid for the coal of course as happens normally a disagreement arose and Brogdon denied that there was a binding contract between the parties well the addition of the arbitrator's name by Brogdon was a new term and therefore a counteroffer the question was did the Metropolitan Railway Company accept this offer it might be thought that by putting the document into the managers desk was an equivocal act incapable of amount into a valid acceptance but no objection was made to the terms which was suggested by mr. Brogdon instead what the company did was to place an order for the coal and then he delivered the coal the fact is that when he changed or when he added terms and sent it back when the first lot of coal was delivered and the railway company accepted it they more or less accepted the terms within that document and so that is the one of the way certainly where conduct on the parties part will certainly amount to acceptance now Lord Cairns in the case said that approbation was clearly given when the company commenced a course of dealing which is referable only to the contract and when that course of dealing was accepted and acted upon by mr. Brogdon in the supply of coal then of course we had a binding agreement coming into force we have noted that an acceptance to be valid should show an unqualified assent to the terms of the offer it should not introduce new proposals or stipulations this is the position in theory but in practice businesspeople may try to exploit the process of offering acceptance so as to contract on their own standard terms well the leading case in this year of course is but the machine tool and Excel oh it is the Battle of the forum cases and the idea is that one party will draft or use rather his standard form contract the other party will respond on his standard form contract the party then sends back on his standard form contract and it goes on and on hence the battle of the forms the point of course is that it is the last form the last contract on which the parties then start dealing which will bind the parties so if I send an order over so a purchase order and you'll respond with an invoice and on my purchase order had my terms and conditions so let's say for argument's sake my purchase orders say that I pay in 30 days you send over an invoice your invoices payment is required in 15 days I then send back my final order as it were and it says again I paint 30 days based on that you then decide to deliver the goods well the loss that because the last form with the terms on it was my form I will be able to settle in 30 days what about the communication of acceptance well as a general principle acceptance must be communicated to the offer or if it is to lead to a binding agreement the offeree must do no more than simply make an uncommunicative decision to accept an offer so in brogdon as we've mentioned we see there that it was not the decision of the respondent company's manager to accept the amended draft contract that concluded the agreement with the appellant but rather the ordering of the coal and the subsequent course of dealings between the parties now an acceptance may be by words spoken or written or by conduct but mere silence is insufficient to bind the law takes an objective view of agreement and some external evidence beyond a mental resolution is generally required for there to be a valid acceptance now if a particular form of form of acceptance is requested by the offer or then generally the offering must comply with that request now although there is a need to communicate acceptance of the offer or what amounts to a communicated acceptance depends on the types of cases we are considering furthermore in unilateral contracts the offer or does not request a counter promise from the offeree he asked for performance of some act or acts as we have seen in carbolic in carlisle and carbolic smoke ball and again you know what that case said what though is the position if they offer always the requirement of communication communicated acceptance and the offeree thinking that silence will amount to a valid acceptance does nothing further well that is a point we will consider immediately after the bridge

Channel: Law Sessions

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Keywords: Law Sessions, Law, Jennifer Housen, LLB, University of London, Lecture, Contract Law, Acceptance, Contract Formation

Id: DD2f78v6QnA

Length: 16min 0sec (960 seconds)

Published: Tue Dec 11 2012