Communication of acceptance. The general rule is that an acceptance must be communicated to the offeror. Until and unless the acceptance is so communicated, no contract comes into existence: Lord Denning in Entores V. Miles Far East Corp (1955) 2 All ER 493. The acceptance must be communicated by the offeree or someone authorized by the offeree. If someone accepts on behalf of the offeree, without authorization, this will not be a valid acceptance.
As stated before, acceptance must be communicated, otherwise it will not be valid; that was the decision of the court in England in the celebrated case of Felthouse V. Bindley, common pleas (1982)11C.B.(N.S) 869;142 E.R.1037
Not only that, the communication must be in such a form that it can be objectively determined. In other word, it must be externally manifested, either by words, conduct, writing, or by one of the modern modes such as telex, telegram, fax or e-mail.
In certain circumstances the offeror may expressly or implicitly waive the requirement of communication of acceptance. This happens mainly in unilateral contracts, particularly in the reward cases. See the land mark judgment of the English court in Carlill V. Carbolic Smoke ball Co., the court held that “an offeror may dispense with notice to himself if he thinks it desirable to do so, and in that case the company had indicated that it would be sufficient for anyone to act on the proposal without communicating acceptance of it, and it was, therefore, bound.
The advertisement cases, according to the court, carry the implication that notification of acceptance is not required. This principle was confirmed by Buckly, J., in the more recent case of Manchester Diocesan Counsel of Education V. Commercial and General Investment Ltd (1969)3 All E.R. 1593.
The Moment of Acceptance
At what point in time does acceptance occur in each case? Much light has been thrown on this issue by Lord Denning in Entores V. Miles Far East Corporation, (1955) 2 Q.B.327. C.A.
Facts of the case were as follows:
In that case an offer was made by telex in London to the defendants in Amsterdam and the defendants replied by telex. When a dispute arose, the plaintiffs brought an action in England and the defendants challenged the jurisdiction of the English Court. The question of jurisdiction devolved on where acceptance actually took place.
It was held that it was in England. The acceptance was sent by telex from Amsterdam but was not effective until received in England. Thus, the acceptance occurred in England and, therefore, the contract was concluded in England. This gave the English Courts jurisdiction.
In considering the issues of fact and law raised in the Entores V. Miles Far East Corp case, the court identified the moment of acceptance in variety of situations. As we have seen above, in the case of telex, it is when the reply is received by the offeror. Where two parties contract inter praesentes, i.e., face to face, acceptance occurs when the offeror hears the reply of the offeree. In a contract by telephone, it is only when the offeror hears the offeree’s acceptance.
Furthermore, with regards to telegrams, it is when the offeror receives the telegram. In other words, generally, acceptance becomes effective not merely when communicated, but when actually received by the offeror. As we shall see, the case of acceptance, by post is radically different from the general proposition above.
Where Method of Acceptance is prescribed
An offeror may or may not prescribe the mode of acceptance.
Uwaifo, J.C.A., put it succinctly when he said:
“…it is the law that an offeror may prescribe and direct the method by which an acceptance of an offer may be communicated. Whether some particular mode has been proposed, depends upon the inference to be drawn from the circumstances.
Where an offer states how the acceptance of his offer is to be communicated, the question arises whether precise observance is mandatory. Can the offeree send his acceptance by messenger when required by the offeror to do so by post? It is safe to say that any mode either as fast or faster than that prescribed by the offeror is sufficient to create contract.
Thus, in Tinn V. Hofmann & C0, acceptance was requested by return post. Honeyman, J., observed in his dissenting judgment that “that does not mean exclusively a reply by letter by return post, but that you may reply by telegram or by verbal message or by any means not later than a letter written by return of post.
This was confirmed by Buckley, J., in Manchester Diocesan Council of Education V. Commercial and general Investment Ltd. (1969) 3 All E.R. 1593; (1970) 1 W.L.R. 241.
Facts of the case,
The plaintiff invited tenders from interested parties for the sale of one of its properties. It also stated in the advertisement that the successful tenders would be informed by a letter of acceptance sent to an address which every tender should contain.
In the event, the plaintiff first notified the defendant of its acceptance of the defendants tender, not through the address given by the defendant as stipulated in the advertisement but through the defendant’s solicitor.
The defendant argued that the acceptance was invalid for failure to comply with the terms of the plaintiffs own requirements, i.e, for not being posted to the defendants through the address stated in the tender.
It was held that “the acceptance was not invalid simply because it did not follow the mode stipulated in the advertisement.
“…where… the offeror has prescribed a particular mode of acceptance, but not in terms insisting that only acceptance in that mode shall be binding, I am of the opinion that acceptance communicated to the offeror by any other mode which is no less advantageous to him will conclude the contract”.
Where the offeree decides to adopt another mode of acceptance, the risk of his acceptance not arriving as fast as it would have done if he had followed the mode stipulated by the offeror, is to be borne by the offeree.
In such a case, the offeree is entitled to reject the acceptance if it comes later than it would have done by the prescribed mode. In Eliason V. Henshaw , 4 Wheaton 225 (1819), (U.S. Supreme Court)., a United States case, the offeree replied by post instead of by wagon as requested by the offeror the letter was delayed and it arrived late. It was held that the offeror was entitled to reject the acceptance.
On other issue of importance that arose from the Manchester Diocesan Council of Education case, is that the prerogative to reject an acceptance for failure to comply with a stipulated mode of acceptance, lies exclusively with the party prescribing the mode, and not with the other party.
Thus, in Eliason V. Henshaw above, if the offeror had decided to accept the letter of acceptance which was sent by post instead of by wagon as he had stipulated, the offeree could have been bound, and could not be heard to say his own acceptance was invalid because he had sent it by post instead of by wagon.
In the Manchester Diocesan Council of Education case it was held that they would communicate acceptance by posting to a particular address, they were entitled to modify their own stipulation. The defendants could not take advantage of the failure by the plaintiffs to comply with the stipulated mode since it was not they (the defendants) who made the stipulation.
Method of acceptance – not prescribed – Communication of Acceptance.
Where no form of communication of acceptance is prescribed by the offeror, the form to be adopted by the offeree will depend upon the nature of the offer and surrounding circumstances. Thus, an oral offer implies an oral acceptance. If the offer is by telegram, fax or e-mail then a prompt reply is indicated and it too should be by telegram, fax or e-mail.
In most cases, as we saw above, acceptance does not occur until received by the offeror. The only exception is acceptance by post. This mode of acceptance will now be considered separately.
Communication of Acceptance, Communication of Acceptance,