Contract Law Lecture 5 - Acceptance Acceptance: - A final and unqualified assent to all the terms of an offer. - Second stage to an agreement. - Acceptance will only occur if it mirrors the offer. Characteristics: - Must not introduce new terms Hype v Wrench (1840) 3 Beav 334 Counter-offer: - During negotiations, parties may respond to an offer by suggesting different terms. - Such response is not valid as an acceptance as it does not match the offer, it will be a counter-offer. - Several offers and counter-offers may be put forward. - A counter-offer is a rejection of an offer and destroys it, rendering in incapable of subsequent acceptance. - Only the last offer put forwards survives and is available for acceptance. Request for Information: In some situations, it might be difficult to determine whether a communication is a counter-offer or not. E.g. inquiring about how to pay, such inquiries are not counter-offers because it is not suggesting or introducing new terms but simply clarifying the way the contract will be performed. Stevenson, Jacques & Co v McLean (1880) 5 QBD 346 Offeror made an offer to sell some iron to offeree for 40 shillings, but did not indicate a delivery time. Offeree replied saying 'Please wire whether you would accept 40 for delivery over two months, or if not, the longest time you would give', offeree then accepted the offer - the inquiry didn't set out new terms, it was simply a request for information. 'Battle of the Forms' This situation is one in is important to determine whether a particular communication is a counter- offer or not. Parties in negotiations exchange standard form contracts, e.g. standard terms, in which the terms are conflicting. Possible solutions: - Prior oral agreement - First form wins - Last form wins - No contract at all Traditional Approach: Butler Machine Tool Co Ltd v Ex-Cell-O Corporation (England) Ltd (1979) 1 All ER 965 Sellers offer was made on the 23rd May with their standard terms and contained price variation clause. Buyer responded on the 27th May with an order on their own standard terms which did not
included a price variation clause. Buyer also included a tear off acknowledgement slip stating 'we accept your order on the Terms and Conditions stated therein'. Seller signed and returned the acknowledgement slip together with a covering letter referring to their own terms as set out in their initial offer on the 23rd May. Sell subsequently tried to enforce the price variation clause. The C of A held in favour of the buyer, stating that the acknowledgment slip was an effective representation of the terms upon which the buyer was contracting. The sellers covering letter was not specific or sufficiently definitive to amount to a proper counter-offer. Subsequent Developments: RTS Flexible Systems Ltd v Molkerei [2010] UKSC 14 Parties were in negotiation and work started of the basis of a letter of intent which later expired. There was an agreement on many terms