Contract Law Acceptance and Cases Quiz

Acceptance of a proposal occurs when the person who receives the proposal signifies their agreement to it, transforming the proposal into a promise.

Acceptance must be absolute and unconditional. This means you have to agree to the offer without changing any terms. Any changes constitute a counteroffer, which rejects the original offer.

A counteroffer occurs when the person receiving the offer (offeree) doesn't accept it as it is but proposes new terms. This destroys the original offer.

The Ka Wah Bank Ltd v Nadinusa Sdn Bhd case highlights that any acceptance that introduces qualifications, modifies the offer, or seeks acceptance on new terms is invalid.

The offeree cannot later accept the original offer if they have proposed a counteroffer first. This is illustrated in Hyde v Wrench, where the buyer made a counteroffer, which destroyed the original offer.

A request for more information is not considered a counteroffer. For example, in Stevenson, Jaques & Co v McLean, a request for confirmation didn't destroy the offer.

The offeree's acceptance must be communicated to the offeror for it to be valid. This communication can be expressed or implied.

Silence cannot be construed as acceptance unless there's a prior agreement or established practice.

When the accepting party changes the terms of the original offer, it creates a new offer (counteroffer) rather than true acceptance.

In the case of Brogden v Metropolitan Railway Co, the parties' continued business dealings after a modified contract was sent, implied acceptance even without a signed document.

Adding terms or documents with additional conditions when accepting an offer nullifies the initial acceptance, creating a counteroffer.

When the words 'subject to contract' are used, there are two possible interpretations regarding the existence of a contract.

The acceptance must be a direct response to the original offer, not to other proposals.

Two identical offers made without knowledge of the other, are not considered mutual acceptance. They are just two separate offers.

Acceptance of an offer is the final agreement that creates a binding contract. It can be expressed (in writing or orally) or implied by conduct.

In the case of Tinn v Hoffman & Co, cross-offers did not create a valid acceptance as they were made independently and without mutual knowledge.

Acceptance of an offer is not valid if the acceptor was unaware of the offer's existence. This aligns with the principle that individuals cannot agree to something they are not aware of.

The motive behind accepting an offer is irrelevant; as long as the terms of the offer are fulfilled, acceptance is valid.

Acceptance of an offer can be communicated through any action or inaction that clearly indicates agreement. It can be a verbal statement, a written document, or even a specific action.

The moment of acceptance is when the acceptor sends their acceptance, even if the proposer hasn't received it yet. This is applicable to methods like posting letters or sending messages.

Acceptance is valid only when the proposer knows about it. This applies to situations where the proposer needs to acknowledge the acceptance.

A legal principle where acceptance of an offer sent through post or telegram is considered complete the moment the acceptance letter is posted.

In this case, acceptance was considered binding upon posting, even though the proposer didn't receive the letter on time.

The postal rule applies to acceptance communicated through post. The acceptor is bound as soon as they post the acceptance letter, regardless of whether the proposer receives it on time.

The postal rule states that acceptance of an offer is complete when the letter of acceptance is posted, regardless of when it is received by the offeror.

The postal rule does not apply to instantaneous forms of communication, such as phone calls or telegrams. In these cases, acceptance is complete when the offeror receives the acceptance.

If the offeror fails to hear the acceptance due to their own fault (e.g., a distraction), a contract is still valid because the acceptor took reasonable steps to communicate their acceptance.

If neither the offeror nor the acceptor is at fault for the acceptance not being received (e.g., a phone call drops), no contract is formed because the acceptance was not effectively communicated.

In the case of Entores Ltd v Miles Far East Corporation, the court ruled that acceptance is effective when it is received by the offeror in the context of instantaneous communication.

The offeror is bound by the contract as soon as the letter of acceptance is posted. However, the acceptor can revoke their acceptance before it is received by the offeror.

The acceptor is not bound by the contract until the letter of acceptance is received by the offeror.

The offeror cannot withdraw their offer after the letter of acceptance has been posted without breaching the contract.

Performing the actions stipulated in an offer is considered acceptance. This principle was established in the Carlill v Carbolic Smoke Ball Co case.

Silence alone does not constitute acceptance. This was established in Felthouse v Bindley. However, in exceptional cases, where the offeree agrees to be bound by silence, it can be considered acceptance. This was explored in Re Selectmove Ltd.

An acceptance can be revoked at any time before the acceptance is communicated to the offeror. Once the offeror receives or becomes aware of the acceptance, revocation is no longer possible.

Section 5(2) of the Contracts Act 1950 (CA 1950) outlines the revocation of acceptance rule. Acceptance can be withdrawn before it's communicated to the offeror.

Communication of acceptance is complete when the acceptance comes to the knowledge of the offeror. This key rule is stated in Section 4(2)(b) CA 1950.

The proposer's revocation is complete when they send out the notice of revocation. However, for the revocation to be complete for the person receiving it, they must actually receive the notice. This is explained in Section 4(3) CA 1950.

An acceptor can revoke their acceptance anytime before the proposer becomes aware of it. If the offeror hasn't received or known about the acceptance, the revocation is valid.