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.
The question then arises when does acceptance occur? Acceptance in this form occurs when the act has been performed.
How can an offer be terminated?
An offer can be withdrawn prior to acceptance. Once someone has accepted the terms of the offer it can no longer be withdrawn.
If the offer states it will be open for a certain period of time such as 7days or a fortnight, this will have no bearing on the amount of time the offer is open for. The same rule still applies and so the person making the offer can withdraw the offer right up to acceptance.
The rule will only change if there has been a separate contract formed that specifically state the time period on which the offer concerning a different matter can be open for.
How does termination of a contract need to be communicated?
The withdrawal of an offer needs to be communicated and the postal rule does not apply to termination in any situation.
Where the withdrawal of an offer was posted on Monday but not received until Wednesday, and the acceptance of the offer was posted in between on the Tuesday, then the withdrawal will not be accepted.
The Battle of forms
The battle of forms is the chain of correspondents between the parties of the contract where each party introduces their standard terms into each letter. This is usually printed on the back of the letter.
It is usually the person who sends the last letter containing their terms will effectively ‘win’, and therefore their terms will be those contained in the contract.
Each time a letter is sent out containing different terms on the back of it, the new set of terms will be classed as a counter offer therefore cancelling the previous terms.
The last set of terms introduced before the parties actually act upon the agreement will be te terms that create the contract.
Offer and acceptance mistakes
No contract can be created if the parties are at such cross purposes that, it cannot be established what the content of the contract actually is.
Where one contracting party knows that the other party is mistaken as to the terms of the contract he or she will not be able to enforce those terms against the other party.
Mistake as to the identity
This situation arises where one party makes a mistake as to the identity of the other party. This is most commonly the case in cases involving fraud.
This could happen where a rogue pretends to be someone of substance in order to make a contract to purchase something with the result being no monies paid.