Acceptance of an offer

The unconditional agreement to all terms of that offer.

Formation of a Contract Blockbusters Quiz

The general rule is that acceptance must be communicated in order that a contract is formed.The party purporting to accept the offer must have authority in order for it to be accepted. This principle was demonstrated in the case of Powell v Lee (1908) in which the claimant applied for a job as a headteacher. The school managers decided to appoint the claimant whereupon one of the managers, without authority, told the applicant that he had been appointed. The managers then reconsidered their decision and appointed someone else. The claimant brought an action for breach of contract but the court found that no contract existed as there had only been an unauthorised communication of the school's intention to employ the claimant.

Can silence amount to acceptance? Not according to the decision in Felthouse v Bindley(1863). The claimant wished to buy a horse from his nephew. They discussed the matter of the sale of the horse and the nephew sent his uncle a letter. The uncle replied to the effect that 'If I hear no more about him, I consider the horse mine at £30 and 15 shillings.' There was no reply (silence) but even though he was busy the nephew managed to find the time to tell the man (Bindley) running an auction on his farm not to sell the horse. Unfortunately Bindley did sell the horse accidentally. The uncle sued Bindley and the issue came down to the question of whether Felthouse could show that there was a valid contract. Bindley's argument was that there could not be a contract as the nephew had not communicated his acceptance of the claimant's offer. The court agreed there was no contract.

Acceptance of an offer may be made orally, in writing or by conduct.

 

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