Acceptance

● Acceptance is an essential element in the formation of the contract.

● It is the final and unqualified assent to the terms of an offer.
● In general, the acceptance must match the offer.
● Acceptance should be valid.
● In order to an acceptance to be valid there are some requirements to be fulfilled,
• Awareness/ Knowledge
• Unqualified
• Method of Acceptance
• Communication

Awareness

● The offeree must be aware of the offer before they can validly accept it.
● He/she cannot accept an offer of which he/she was unaware.
● The offeree’s action must be in response to the offer.
Tinn v Hoffman(1873)
Facts:
The defendant offered by letter to sell the claimant a certain amount of iron for a certain price per
ton. In the letter, the defendant specified that the claimant should reply by post. By coincidence, the
claimant wrote to the defendant on the same day asking to buy the iron on the same terms. The
claimant contended that his letter to the defendant was a valid acceptance, even though he sent it
before receiving the defendant’s letter.

Decision:
● The claimant could not accept an offer of which he was not aware, so the letter was not valid
acceptance.
● The offeree must be aware of the offer before they can validly accept it.
● The court noted that while the defendant had specified that any acceptance should be by post,
if the claimant had accepted by an equally fast or faster method (such as telegram or in
person) this would also be valid.(other)

Knowledge of the Offer

● Performing the act that constitutes acceptance of an offer, with knowledge of the offer.
● However, the motive to do so may be other than accepting the offer.
● If so, does that act amount to a valid acceptance?
R v. Clarke(1927)

● To be valid, acceptance must be given in response to the offer.

● “An acceptance wholly motivated by factors other than the existence of the offer has no
effect.”
○ Facts:
○ The Crown offered a reward for information that would lead to the conviction of the
murderer. Clarke was under suspicion of the murder by crown, and to reduce his own
sentence, gave the information leading to the arrest of the murderers. Without that
evidence there would have been no case. Clarke admitted that he had no intention (at
the time he gave the information) to earn the reward. Crown refuses to pay reward.
○ Decision:
○ Clarke provided the required information to secure his release but not in response to
the reward offer he knew. The trial judge held that there was no contract because
Clarke did not accept the Crown’s offer.
○ One cannot accept an offer one doesn't know exists, or that one has forgotten exists.
○ One needs an expectation or reliance interest in the reward in order for that reward to
be recoverable.

Williams v Carwardine (1833) 5 Car & P 566.

Facts
● The defendant put up an advert offering a reward for anyone who gave information leading
to the identification of the person who murdered the defendant’s brother.
● The claimant knew who did it, but when she saw the advert she did not come forwards. She
was later badly beaten by the murderer. Believing that she was going to die and seeking to
ease her conscience, the claimant provided the information to the defendant. This information
helped the police convict the man of murder.
● The claimant later claimed the reward. However, the defendant refused to pay. He argued
that the claimant was not motivated by the offer when she gave the information, but rather
had other motives. This, he claimed, meant that there was no contract.

Issue(s)
● Do the claimant’s motives matter to whether they have accepted an offer?
 Decision
● The court held in favour of the claimant. The claimant’s motives were not relevant to
whether she had accepted the offer in the advert.
● The claimant’s reason for accepting an offer makes no difference to whether their acceptance
is valid (absent a defence such as duress).

Acceptance must exactly fit the offer.

● The offeree must accept all the terms of the offer.

● In general, the acceptance must match the offer (mirror the terms of the offer).
● However, a binding contract may be constituted without a matching offer and
acceptance.

Butler Machine Tool Co v Ex-cell-o Corp [1979] 1 WLR 401.

Facts
The claimant offered to sell the defendant a machine tool for £75,535. They stated that it was a
condition of any order that the claimant’s proposed contract terms would apply, and that these terms
would prevail over any contrary terms the buyer included in their order. One of these terms allowed
the claimant to vary the price of the tool depending on the prevailing market prices at the delivery
date.

The defendant wrote back to the claimant, agreeing to buy the tool but only on their own terms,
which did not include the price variation clause. The defendant’s order had a tear-off part which the
seller could sign and return. The tear-off slip stated that the signor would accept the order ‘on the
terms and conditions thereon’. The claimant signed and returned the tear-off slip, but included a
separate cover letter re-stating that the contract would be on the claimant’s terms. The parties later
disputed whose terms applied to the arrangement.
Decision
The Court of Appeal held that there was a completed contract on the defendant’s terms. The
defendant had not accepted the claimant’s offer when they submitted their order. Rather, they made
a counter-offer. The claimant accepted this counter-offer when they completed and returned the
tear-off slip.

This Case is Authority For…

A response to an offer which does not mirror the terms in that offer is not an acceptance. It is a
counter-offer, which has the effect of terminating the original offer.

Lord Denning , His lordship argued that “the better approach was to construe the parties’
communications as a whole to determine whether there was a contract.”

However, Lord Edmund-Davies in Gibson v Manchester City Council rejected the alternative
approach suggested by Lord Denning, although Lord Diplock (with whom Lords Fraser and Keith
agreed) thought that there might be contracts which do not fit into the traditional offer/acceptance
analysis.

Conditional Assent to an Offer

● The offeree could introduce new terms or conditions.

● Such acceptance is not effective unless the offeror has been informed and agreed.

Masters v Cameron (1954)

○ Facts:
○ Cameron and Masters signed a written memorandum for the sale and purchase of
Cameron’s farm to Masters. The Memo stated that “…this agreement is made subject
to the preparation of a formal contract of sale which shall be acceptable to my
 [Cameron's] solicitors on the above terms and conditions.Masters wanted to withdraw
from the purchase, argued that there was no legal obligation to purchase the property,
and sought to recover the deposit.
○ Decision:
○ It was decided that there is no binding contract unless and until a formal document is
executed or no binding contract was made before the formalizing of the agreement.

Branca v Cobarro (1947)

Facts:

Defendant agreed to sell his mushroom farm to the Claimant.In the agreement, Defendant wrote,
“This is a provisional agreement until a fully legalised agreement drawn up by a solicitor and
embodying all the conditions herewith stated is signed.” The Claimant paid a deposit to the
Defendant.The Claimant repudiated the agreement and sued to recover the deposit on the ground
that there had been no contract in place. The judge held that there was no binding agreement.

Decision:

Appeal allowed; a binding contract was in place. The term ‘provisional agreement’ indicated that
the parties intended for their agreement to be binding in the interim until it is replaced by a formal
contract.