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Home > Law > Law glossary > Law glossary
acceptance of offer
Last modified: Thu Feb 23 16:37:37 2006
For a contract (see: Contract) to be valid,
there must be `offer and acceptance'.
The acceptance can be signalled either by communication to the offerer,
or, in some cases, by conduct (e.g., see: UnilateralContract).
A valid acceptance must agree in all particulars with the offer; otherwise it is a counter-offer, not an acceptance (see: Counter-offer) at all. In particular, if the offer states terms for acceptance (e.g., that it be in writing) then the acceptor must comply for the contract to be valid. For example, in Neale v Merrit an offer stipulated full payment on acceptance; the acceptor purported to accept and enclosed part payment and a promise to pay the rest in instalments. This was not deeded a true acceptance, and the contract was declared void (see: NealeVMerrit1930).
Unless the terms of the offer say otherwise, acceptance may be be in writing, orally, or by conduct (see: UnilateralContract). In the latter case, the acceptance is signalled by the offeree's acting as though the contract were accepted.
It is permissible for a written acceptance to be made by post, and the usual ruling is that acceptance occurs at the moment of posting, not of receipt, which can lead to anomalies (see: AcceptanceOfOfferByPost).
If communication is `instantaneous' (e.g., telephone, telex), then acceptance does not occur when the communication is made, but when it is received. Of course, these events are legally contemporaneous, but it is possible for communication to fail during acceptance, and no-one should have to be bound by an acceptance that he has not heard (see: EntoresLtdVMilesFarEastCorporationLtd1955).
If an offer is accepted `subject to contract', this is merely an indication that the parties intend to contract formally at some later stage. This is usually used in sales of land and property, to allow the parties to signal their strong intention to contract, but not to be formally bound. An agreement `subject to contract' is not binding on anyone, and neither party need proceed to a formal contract. On the other hand, a contract containing vague terms about provisionality may still be held by courts to be binding, so the precise form of words should be used.
In a contract for the sale of goods, Title to the goods passes from the seller to the buyer in the manner set out in the contract. If the contract contains no such provision, then title is usually deemed to pass at the moment the offer is accepted.
Finally, an acceptance of an offer cannot usually occur in ignorance (see: AcceptanceInIgnorance), which may be a contention in UnilateralContract.
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