Offer must always be communicate d to the offeree before it can be accepted. A person cannot be said to accept an offer of which they are unaware. If A by public notice advertises a £100 reward for the finder of a lost ca, and B, who is unaware of the notice of offer, finds the cat and then returns it to the owner, B is not entitled to claim the reward. Taylor v Laird [1856].
An offer must be distinguished from an invitation to treat. When an auctioneer requests bids, potential bidders are invited to make offers. An offer is accepted by the auctioneer by the fall of the hammer. Where goods are displayed in a shop window or on shelves in a self-service shop, the display is an invitation to treat and not an offer to sell. When a customer picks up a newspaper in a self-service store and takes it to the cashier’s desk; that action taken is an offer to buy. It is for the cashier to accept the offer and take money in payment. Case example is Pharmaceutical Society of Great Britain v. Boots Cash Chemists [Southern] Limited [1953]. This is further illustrated in the famous case of Fisher v Bell [1960] a shopkeeper displayed in his shop window a flick-knife behind which was ticket reading Ejector knife-4s. He was charged with offering for sale a weapon, contrary to the restrictions of the Offensive Weapons Act 1959.It was held that the display of goods in a shop window is not itself an offer for sale. ‘According to the law of contract, the display for an article with a price on it in a shop window is merely an invitation to treat. It is in no sense an offer for sale the acceptance of which constitutes a contract’ [Lord Chief Justice Parker].
As a result of this decision a further act was passes in 1961 to include the words ‘expose or has in his possession for the purpose of ‘sale’; thus giving effect to the intention of parliament
Acceptance: In the standard situation of contracts consciously negotiated between identified parties, acceptance is the key element. Acceptance is what turns a specific and comprehensive offer, made with the intention to be bound, into an agreement. The general principle applying to acceptance can be stated in two parts: to continue acceptance [and thus agreement] the offeree’s expression of intention and assent must be made in response to and must be made exactly match the terms of the offer; also the matching acceptance must be communicated to the offeror
The methods of communicating acceptance are varied, and it is helpful to note the following decisions.
Mental acceptance: This happens when the offeror prescribes a particular method of acceptance, it follows that, the method prescribed should normally be followed. Thus where acceptance of an offer is to be sent by telegram, acceptance by airmail would be insufficient because it does not comply with the terms of the offer.
Where acceptance consists in the performance of an act, as in Calill v Smoke Ball Co.Ltd [1893], this may be sufficient acceptance since the offer does not contemplate that the offeree should notify the offeror orally by letter. The finder of a lost cat or any article, provided that it is returned, will be able to claim any reward offered, assuming in this case the finder knew of the reward beforehand.
There are rules of acceptance such as: it must be unqualified in the sense that it must be absolute and must conform exactly with the terms of offer. Thus if the offeree is required to perform or the sum mentioned paid exactly; Case example: Neale v Merret [1930]. Acceptance is always subject to contract. A phrase that often appears in sales of land and property is “Acceptance subject to contract” This phrase gives parties an opportunity to reflect on the matter, to obtain legal advice, and to change their mind if the need be. Case example: Eccles v Bryant [1948]. In the cases of Walford and others v Miles and Anor [1992] the House of lords held that while a lockout agreement, where one party for good consideration agrees for a specific period of time to negotiate only with the other party to the exclusion of anyone else will be enforceable, an agreement to negotiate for an unspecified period of time will be unforceable as lacking in certainty.
Acceptance by post: Where the post is the proper means of communication between the parties to a contract the following rules apply
An offer has no effect until it reaches the offeree. Where an offer is made by post, it takes effect [i.e. it is communicated] when it reaches the offeree, not when the letter is posted. This can be seen in Adams v Lindell [1818]
Where an offer is accepted by letter sent
hrough the post, the contract is made the moment the letter accepting the offer is posted, even though it never reaches its destination. A case that illustrates this is the case of Household Fire Insurance Co v Grant [1879], G applied for shares in a company. A letter of allotment of shares was posted to G but never reached him. It was held that the contract was complete on posting, and G became a shareholder of the company. For this rule to apply, the letter of acceptance must be prepaid, properly addressed and properly posted. The handing of a letter to a postman is not proper posting.
Bibliography 1. Atiyah, P.S. (1995). An Introduction to The Law Of Contract. (4th Edition) Oxford: Clarendon Press 2. Card, R. and James, J. (1997). Law For Accountancy Students. (6th Edition) London: Butterworths
