Week 5 (202409) Ch 2 Acceptance Lecture PDF

Acceptance nd - the 2 Element  Acceptance Definition Section 2(b) CA states that when the person to whom the proposal is made (offeree) signifies his assent (agree to the offer)…the proposal is said to be accepted. A proposal, when accepted, becomes a promise. ...

Acceptance nd - the 2 Element  Acceptance Definition Section 2(b) CA states that when the person to whom the proposal is made (offeree) signifies his assent (agree to the offer)…the proposal is said to be accepted. A proposal, when accepted, becomes a promise.  Acceptance Section 9 states that if the acceptance of a promise is made in words, the promise is said to be expressed, and if the acceptance is made other than in words, the promise is said to be implied. Thus, acceptance can be made in writing, orally or implied by conduct of the parties, but if a method to accept is prescribed by the offeror then acceptance must be according to the manner prescribed.  Acceptance Requirements or rules of acceptance For there to be a valid acceptance the following requirements or rules of acceptance must be complied with.  Rules of acceptance (a) The offeree must signify his acceptance Section 2(b) CA states that ‘when the person to whom the proposal is made signifies his assent…the proposal is said to be accepted’. Example: A offers to buy B’s car for RM10k. If B said yes to A (B signifies his assent), then B has accepted A’s proposal. A and B has now established an agreement. The offer, when accepted, becomes a promise.  Rules of Acceptance Once the proposal is accepted then under Section 2 (c) - ‘the person making the proposal is now called the ‘promisor’ and the person accepting the proposal is called the “promisee”. In the above example, the offeror A is now the ‘promisor’, and offeree B is the ‘promisee’.  Rules of Acceptance b. The person purporting to accept an offer must be aware of the offer. The person who wants to accept the offer must be aware of the offer.  Rules of acceptance c. Acceptance in only effective when communicated to the offeror. As a GENERAL RULE, acceptance is only effective when it is communicated or brought to the notice of the offeror. IMPORTANT!!!! ( offeree no need to communicate the acceptance) Situation 1 Situation 2 Situation 3 The offeror Conditions Postal rule has waived of the the need proposal for acceptance  Situation 1 Exception – where acceptance need not be communicated: IF: (i). The proposer has dispensed with or waived the need for it, or  2nd Situation (ii) the proposer allows the ‘conditions of the proposal’ to be performed without acceptance being communicated i.e. by action or by conduct as in a unilateral contract e.g. Carlill v Carbolic Smokeball Co. where the mode of acceptance is by performance of the conditions stated in the offer.  Rules of acceptance Postal Rule – acceptance by post.  Section 4(2) (a) states that the communication of an acceptance is complete as against the offeror, when it is put in a course of transmission to the offeror, so as to be out of the power of the offeree. What happens when the acceptance does not reach the Proposer, e.g. where the acceptance is in a letter which has gone astray or is lost?  Postal Rule – acceptance by post In Entores Ltd. v Miles Far East Corporation it was held that ‘when a contract is made by post it is clear law … that acceptance is completed as soon as the letter is put into the post box, and that is the place where the contract is made’.  Rules of acceptance d. Acceptance must be absolute and unqualified Section 7(a) states that in order to convert a proposal into a promise the acceptance must be absolute and unqualified. Absolute and unqualified means there is no more negotiation or bargaining by the parties.  Rules of acceptance ‘Acceptance’ by adding new terms or conditions If the parties are still negotiating, there is no agreement yet or if any new terms or conditions are brought into the picture then there would be no acceptance. Here are two situations:  Situation 1 – Counter Offer Looks like Acceptance- but actually a Counter offer!! An acceptance which is qualified by the introduction of a new term or condition may be seen as a ‘counter offer’ – see Hyde v Wrench. A counter offer is not the acceptance. The effect of a counter offer is that it rejects or destroys the original offer and replaces it with a new offer, this time, from the other party who was offered originally.  Mary offers to sell book for RM90 to Peter. Peter reduces the price to RM80. **Counter offer can cancel/destroy the original offer (made by Mary)!!!!  Hyde v Wrench 6 June - D offered to sell his estate to P for £1000. 8 June – P replied that he will pay £950 – here P made a counter proposal. 27 June - D refused to accept P’s proposal. When D refused, P wrote again this time agreeing to pay £1000 – the original proposal. It was held that no acceptance had taken placed because P’s letter of 8 June amounts to a rejection of the original proposal which could not be revived. (Note: The parties can further negotiate after the first rejection).  Rules of acceptance e. Acceptance must be within reasonable time Section 6 (b) states that a proposal is revoked by the lapse of time prescribed in the proposal for its acceptance, or, if no time is so prescribed, by the lapse of a reasonable time, without communication of the acceptance. What is ‘reasonable time’ depends on the circumstances of each case.  Rules of Acceptance f. Acceptance must be in the prescribe manner Section 7 (b) provides that acceptance must be expressed in some usual and reasonable manner, unless the proposal prescribes the manner in which it is to be accepted. If the proposal prescribes a particular manner or method of acceptance, the promisee must comply with the manner prescribed in order to accept the proposal.  Rules of acceptance Can the offeror prescribe silence as a manner of acceptance? By this subsection it has been held that the offeror cannot prescribe ‘silence’ as a manner of acceptance. (See Fraser v Everett & Felthouse v Bindley).  Revocation of acceptance After saying you accept, how do you withdraw your acceptance???  Revocation of acceptance How to revoke an acceptance? S 5(2) CA states that an acceptance may be revoke at any time before the communication of its acceptance is complete as against the proposer, but not afterwards. Example Alice proposes, by a letter sent by post, to sell her house to Ben. Ben accepts the proposal by a letter sent by post. Ben may revoke his acceptance at any time before his letter of acceptance reaches Alice, but not afterwards.