How to accept the offer and terms of a contract

The ‘Acceptance’ of the agreement

The acceptance of an agreement must be final and irrevocable. The acceptance must be of all the terms of the offer. A person cannot pick and choose certain parts of an offer to accept and decline the remainder. 

Where an acceptance introduces new terms into the contract by altering existing ones or merely inserting new ones, then this is not an acceptance. This will be considered a counter offer to the original offer. A counter offer will act as a rejection of the original offer which will no longer be able to be accepted. 

It is essential that a counter offer is distinguished from a mere inquiry as to one of the terms of the offer. A mere inquiry or question regarding the original offer will not reject the original offer by creating a counter offer. The original offer can still be accepted.

How does a person accept an offer?

Communication of the acceptance of an offer can take many forms.  

Acceptance can be made through conduct. This will normally be through words spoken or written in some form of document.  

Silence will usually not be enough to constitute acceptance.

What is the postal rule? How does it work?

Normally an acceptance of an offer must be communicated and or received to be effective.  

The exception to this rule is where the postal rule comes into effect.  The postal rule applies where a properly addressed acceptance is sent through the post. This will be effective on posting providing the person making the offer has not specifically stated that postal communication is not accepted.  

The risk of the letter containing acceptance being delayed is then placed on the person making the offer, as the person accepting the offer has done all they possible could to take the appropriate measures.

If the person replying to the offer in order to make an acceptance has made a mistake with the address on the envelope, then this is inevitably their own fault and acceptance will not be effective on posting.

Does the postal rule apply to different forms of communication?

The postal rule will not apply in cases involving fax, email etc. The normal rule will apply here that acceptance must be received by the person making the offer in order for it to be effective.  

It is not necessary for any of these forms of communication to be physically read by the receiver for the acceptance to be effective. Once they have received the acceptance is is effective from that moment.

Can an offer be accepted if the person did not realise the offer existed?

This sort of confusion most commonly arises in relation to advertised awards; this is a unilateral contract where only one person is obliged to act. 

The courts have suggested that in this type of a case the offer of the reward can be withdrawn right up to the acceptance.

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For more information on:

  • How can an offer be terminated?
  • How does termination of a contract need to be communicated?
  • The Battle of forms
  • Offer and acceptance mistakes
  • Mistake as to the identity