Contract Law Module: Lesson 2 - Acceptance of an Offer
Key Concepts of Acceptance
Power of Acceptance: An offer gives the offeree the power to accept and form a contract.
Legally Enforceable Contract: Occurs when an offer is accepted and other contract formation requirements are met.
Communication of Acceptance: Must be clear, unconditional, in response to the offer, communicated to the offeror, and made with knowledge of the offer.
Case Studies
Larkin and Gardner
Fact: Larkin’s acceptance of Gardner’s offer was not communicated before Gardner revoked the offer.
Court Ruling: Acceptance must be communicated to be valid and must occur before the offer is revoked.
Ellison and Henshaw
Fact: Henshaw tried to accept via a different method/place than stipulated.
Court Ruling: The offeror is the master of the offer and can require a specific method/place for acceptance.
Manchester Diocesan Council Case
Update: Notification of acceptance can come through any means unless the offer expressly limits to one method.
Livingstone and Evans
Fact: Livingstone made a counteroffer; Evans’ response revived the original offer.
Court Ruling: Counteroffers typically nullify original offers, but the original offer can be revived.
Felthouse and Bindley
Fact: Felthouse’s offer stated silence would mean acceptance.
Court Ruling: Silence generally cannot constitute acceptance; acceptance must be clearly communicated.
Important Principles
Silence as Acceptance: Generally, silence or inaction is not valid acceptance unless expressly agreed upon.
Certainty and Definitiveness: A contract must have clear terms to be valid. Courts will interpret where possible but cannot create terms.
Scammel Case
Fact: Ambiguity in hire purchase agreement led to no binding contract.
Court Ruling: Contract language must be clear enough for the court to enforce.
Termination of an Offer
Expiration: Offers terminate if not accepted within the specified time or after a reasonable time.
Revocation: An offer can be revoked, but revocation must be communicated to the offeree.
Case: Dickinson and Dodds
Fact: Dickinson was informed indirectly of revocation before accepting.
Ruling: An offer can be revoked at any time before acceptance; indirect knowledge of revocation can suffice.
Next Steps
Review the lesson and consider why the courts reached their conclusions.
Answer the knowledge check questions.
Post questions on the OWL discussion forum or attend the weekly Q&A session.