H418/04 - Acceptance and communication

Unqualified assent

Acceptance is final, unqualified assent to the offer's terms, assessed objectively through the offeree's words or conduct.

“I accept, but only if you reduce the price” changes the bargain and is a counteroffer. “I accept; could you deliver early if possible?” may instead accept the terms while asking for a voluntary concession. Read the complete wording and circumstances. A genuine enquiry about terms before deciding is neither acceptance nor necessarily rejection.

Agreement need not use the word “accept”. In Brogden v Metropolitan Railway (1877), a revised draft coal-supply agreement was not formally accepted in words, but the parties subsequently ordered and supplied coal consistently with it. The House of Lords recognised acceptance through conduct. Conduct must indicate assent to the relevant terms; continuing unrelated business does not automatically accept every draft a party sends.

An offeror cannot generally impose acceptance by silence. In Felthouse v Bindley (1862), an uncle wrote that unless he heard otherwise he would regard his nephew's horse as his. Although the nephew intended to sell, he had not communicated acceptance to the uncle before the auctioneer mistakenly sold the horse. The uncle could not establish the purchase merely through that imposed silence. This protects freedom to reject: receiving an unwanted offer does not ordinarily create a duty to reply. Conduct and an established course of dealing may alter the factual assessment, but pure uncommunicated intention is insufficient.

Particular transactions can have a statutory acceptance point. Under section 57(2) of the Sale of Goods Act 1979, an auction sale is completed when the auctioneer announces completion by the hammer or another customary manner. Applying the wording means distinguishing a bid from that announcement.

Receipt and instant messages

The general rule is that acceptance takes effect when communicated to the offeror, rather than when the offeree merely decides or tries to send it.

For a face-to-face or telephone conversation, words must reach the offeror. If a poor connection prevents the offeror hearing assent and the offeree knows this, speaking alone is insufficient. In Entores v Miles Far East Corporation (1955), acceptance sent by telex from abroad to London took effect on receipt in London, determining where the contract was made. The Court of Appeal distinguished this essentially instantaneous method from post.

Brinkibon v Stahag Stahl (1983) confirmed the receipt approach for telex, while emphasising that no universal answer fits every communication problem. The parties' intentions, sound business practice and the allocation of risk may matter when messages arrive out of hours or fail through someone's fault. Receipt is not necessarily the moment a particular employee chooses to open the message. Nor can every email be assigned one fixed legal time regardless of the arrangements.

Original application: a firm expressly invites email acceptance to its monitored inbox during its 9 am–5 pm opening hours. An accessible acceptance arrives there at 11 am; the manager delays opening it until 4 pm. There is a strong argument for effective communication at 11 am, because the offeror's reading delay should not shift the risk. A message arriving at 11 pm with no expectation of overnight monitoring presents a different issue: effectiveness may wait until reasonable business checking resumes. State the relevant facts rather than simply equating “sent”, “delivered” and “read”.

The postal exception

Where the postal rule applies, a properly posted acceptance takes effect on posting even though it reaches the offeror later or is lost.

Adams v Lindsell (1818) concerned an offer to sell wool, delayed because it was misaddressed. The offerees promptly posted acceptance when the offer arrived, but the offerors sold elsewhere before receiving it. Acceptance on posting avoided an endless sequence of waiting for confirmation. In Household Fire Insurance v Grant (1879), the letter accepting an application for shares was lost in the post, yet the majority held that the contract existed. These decisions allocate the relevant postal risk to the offeror.

The exception is conditional. Post must be a reasonable method in the circumstances, within the parties' contemplation, and the acceptance must be properly addressed and posted. It must accept an offer still capable of acceptance. Do not give an incorrectly addressed acceptance automatic protection or apply posting to an instantaneous message. The offeror can exclude the exception by requiring actual receipt. In Holwell Securities v Hughes (1974), an option required notice in writing to the owner; the posted exercise never arrived. The Court of Appeal treated the wording as requiring communication, so posting alone was insufficient. The rule is also displaced where applying it would produce manifest inconvenience or absurdity.