Essay Sample on Acceptance in Contract Law

Introduction

Each day people buy or sell goods or property. In each case, parties involved may have to make agreements or a contract. A contract is a written or spoken agreement concerning sales, tenancy or employment that is anticipated to be enforceable by law (Treitel, 2003). Thus, contract law was formulated and included in the laws of England to focus on the rules and guidelines for legally binding contracts or agreements entered between parties transferring rights. Contract law is a crucial part of the constitution because it guarantees for swift, legal and efficient transfer of property between individuals and organization hence leading to stability of society. Contract law has three basic elements. The first and the most important element is offer and acceptance. The second element is that parties must intend to be bound legally and third the parties must offer valuable consideration. For a contract to exist, there must be the person to issue an offer (offerer) and the person to accept the offer (offeree). Going down further, a contract would not exist if the offeree does not accept. Consequently, acceptance becomes crucial in contract law. Acceptance is the act of accepting all terms of the offer unconditionally by writing, oral or through conduct (White & Summers, 2010). In contract law, acceptance is made under the circumstances of clear communication to the offeree, terms of the offer precisely matched and that the agreement is certain; however, due to delays in communications between contracting parties via emails, acceptance element of contract law may not be applicable.

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Acceptance in contract law is made when the offeror efficiently communicates to the offeree. Most often, the person issuing an offer and the one accepting it must communicate to agree orally or by written contract in a form or through conduct. However, in most cases, agreements are entered in written form so that as soon as the offeror replies to the offeree's request, a contract is said to exist and any breach after that will amount to legal action. For example, in Adams v Lindsell (1818), the defendants issued an offer to plaintiffs on September 2 to sell wool. In the offer, the defendant requested that the plaintiff replies in 'course of post.' However, the letter containing the offer was wrongly addressed and delayed such that the plaintiff received it on September 5. Consequently, the acceptance letter delayed to September 9, a time when the defendant had sold the wool to another party (precisely on September 8). The court was asked to determine whether a contract existed as of September 8. In the ruling, the court stated that a contract was already in place and the defendant had violated the agreement. Therefore, according to the court's decision in Adams case, acceptance occurs where the offeree has, in writing, accepted to take the offer, irrespective of whether the acceptance letter has been received by the offeror or not. but the offeree or the offeror shoud demonstrate that he or she did all that was necessary to ensure that the letter is posted and send.

A similar thought was confirmed in Household Fire and Carriage Accident Insurance Co v Grant (1879) case where a defendant applied for shares from the plaintiff's company but when offered the shares, did not receive the allotment later. The court stated that a contract already existed once the offeror wrote a reply to the request and that failure to receive the allotment letter was not a matter to consider; rather a contract had been breached by the offeree. An acceptance is considered to have occurred once the acceptance, either by the seller or the buyer to take or provide the offer and the acceptance letter is posted as was argued in Brisbon Ltd v Stahag Stahl and Stahlwarenhandelsgesellschaft GmbH (1983).

Also, acceptance is made when it precisely matches the terms of the offer. The acceptance must entail all the terms of the offer. This means that, for an acceptance to be valid, the offeree cannot simply pick terms that may be suitable or most admirable to him or her and accept while declining the remainder. In Carlill v Carbolic Smoke Ball Company (1982) case, the judges were presented with a question as to whether some terms in an offer could be selectively declined by the offeror. The case involved smoke ball company which issued an advertisement to the consumers of its products that was assuring them of a product which prevented flu. The company manufactured a product known as "smoke ball" which was alleged to cure influenza and other diseases by killing viral viruses, and the person would not be infected. As part of the advertisement terms, the company claimed that if anyone using the product contracted flu, the company would reward PS100. The plaintiff, in this case, accepted the advertisement and used the product. However, she contracted flu and demanded the company to reward her. The company declined, and she filed a case in the court of law. The company argued that the plaintiff should use the product under their supervision. The lower court, as well as the court of appeal, rejected the company's claim ruling that satisfying conditions or terms of using the smoke ball acceptance of the offer and that the users of the smoke ball, who was equally the offeree, had acceptance all the terms in the advertisement. The case made it clear that acceptance occurred when the offeree accepted all the terms of the contract, but not declining part of it.

Either way, the parties involved in a contract are not allowed to introduce new terms or alter the existing once before accepting the offer. In case either party commits such an act, it will be considered a counteroffer and not acceptance. Consequently, a counteroffer acts as a rejection of the offer and a contract will not exist (Hyde v Wrench, 1840).

Moreover, acceptance is valid if the terms of the agreement are certain. All the terms contained in the contract ought to be certain for an acceptance to be made. This is to say that the terms of the agreement should be definite so that a reasonable person can comprehend. The court will then be able to enforce the contract when it can determine those definite terms, that is, what was promised to the complainant. For example, acceptance may not occur where a party offers to provide a service to the other party at a reasonable fee. It is difficult to determine what a 'reasonable fee' could imply and this is not definite. For example, in Scammel and Nephew v Ouston (1941) case, the parties entered a purchase contract. The plaintiff was to supply a van for PS286 on hire purchase terms over a period of two years. The defendant was to trade in his old van for value worth PS100. Along the way, the parties encountered some disagreements which led to the failure of the contract as Scammel refused to supply the van. The court decided that there was no certainty regarding the terms of the contract. The judges argued that even though there was an agreement as to the price of the van, there was no discussion about the hire purchase terms. It was unclear if the hire purchase terms were to be weekly or monthly installments and it was difficult to enforce such a contract. Therefore, the case provided that an acceptance leading to the existence of a contract would take place only if terms are definite and easily enforceable by a court of law. In another case, Nicolene Ltd v Simmonds (1953), the plaintiff agreed to purchase 3000 tons of steel from the defendant. During the time of accepting the offer, the defendant's letter contained these words "the usual conditions of acceptance always apply." The defendant failed to make delivery as was agreed and the plaintiff sought court's intervention. The judges ruled that the use of such words included in the above quote were meaningless and they could not be able to determine or enforce. The takeaway lesson here was that acceptance would constitute to contract law under the circumstance that definite terms or words had been using to outline the agreement to perform the contract.

Arguably, for a contract to exist, proper acceptance must be made between the parties. Further, it appears that proper acceptance would be made in written letters posted to the offeror or offeree. In fact, a law "The Postal Rule" had been passed to guide the application of acceptance when determining lawsuits about the question of circumstances under which acceptance is deemed to have occurred when a postal letter is used. However, in the modern world, people are shifting to information technology means of communication and entering contracts such as emails. Emails are sent, and there is no assurance that they can be delivered to the other party because there are network technicalities involved. It is possible that an email may not be received or may not be read by the other party which compromises the circumstance of proper communication for acceptance and contract law to be enforceable. Ideally, communication is not guaranteed when emails are used to communicate. To date, there is no legislative establishment to determine revocation or acceptance of offers made through emails. In Entores Ltd v Miles Far East Corporation (1955) case, it was ruled that the postal rule would not apply to contracts entered between parties via emails, telex, fax and other technology-based communications.

Furthermore, technology-based communications tend to be sent and received in short messages, and the other party may not respond to every question making it difficult for the courts to enforce such contracts. In Harvey v Facey (1893) case which involved the use of telegram as a means of communication between contracting parties, the court established that the defendant had not responded to one of the message threads. Consequently, a contract had not been arrived at.

Nonetheless, more recently the use of emails in making contracts has increased as the use of postal letters decrease. As a result, it has been argued that even if parties cannot get instantaneous communications when using email, acceptance can be deemed to have occurred when the other party gets online and presses the message icon. Following this argument, the judges in Thomas and anr v BPE Solicitors (2010) case ruled that acceptance is effective from the moment that the receiver opens the message.

Conclusion

Ideally, it is important that the contracting parties ensure there is proper communication during the offering and accepting an agreement, and the terms are definite and well matched for acceptance would need to be enforceable by courts. When using email communications, the contracting parties should understand that a contract will only exist if the other party has physically read the email. A proper law guiding email contracts is still needed for enforcing email contracts.

References

Adams v Lindsell (1818) 1 B & Ald 681.

Brinkibon Ltd v Stahag Stahl GmbH [1983] 2 AC 34.

Carlill v Carbolic Smoke Ball Co [1893] 1 QB 256.

Entores v Miles Far East Corp [1955] 2 QB 327.

Harvey v Facey [1893] AC 552.

Household Fire Insurance v Grant [1879] 4 Ex D 216.

Hyde v Wrench (1840) 49 ER 132.

Nicolene Ltd v Simmonds [1953] 1 QB 543.

Scammell and Nephew v HC&JG Ouston [1941] AC 251.

Thomas & anr v BPE Solicitors [2010] EWHC 306 (Ch)

Treitel, G. H. (2003). The law of contract. Sweet & Maxwell.