Contract Law in United Kingdom Assignment

Running head: CONTRACT LAW IN UNITED KINGDOM
CONTRACT LAW IN UNITED KINGDOM
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CONTRACT LAW IN UNITED KINGDOM
Question 1
Offer is considered as a first step for the beginning of a contract under common law.
It can be considered as a first step to start a legal relationship between two parties. The aim of
this study is to scrutinize the legal principles of acceptance and ambiguities associated with it.
In case of an offer, an offeror makes an offer to an offeree asking him to do or to
refrain from doing any act. When the offeror accepts the offer, then it constitutes an
acceptance. However, in an offer, the offeror must prescribe a method of acceptance of an
offer. In the absence of the same, the offeree can accept the offer within a reasonable time.
By acceptance, the offeree shows his or her willingness to do or absence from doing
something. Acceptance of an offer can be made through oral or postal communication or any
other way feasible to both the parties. Under Common Law, silence does not constitute
acceptance. In the case of Felthouse v Bindley, the plaintiff mentioned that a contract would
be concluded if the defendant did not give the answer to his offer of selling a horse within
two weeks, but the defendant did not reply within such time.1 The court held that there is no
contract, as the absence does not conclude to acceptance. However, in another case of
Brogden v Metropolitan Railway Company, the court held that acceptance could be made
through conduct also. Acceptance of an offer considered a meeting of minds.2 Under this
theory of contract, a party can counter attack a claim of breach by proving that there was no
intention on his or her part to be bound by the terms of the agreement. However, he or she
must not have been subjectively intended to abide by the agreement. This is unacceptable, as
it is not possible for one party to be aware of the intention of the other party. In Lucy V
1 Felthouse v Bindley (1862) 11 C.B. (N.S.) 869
2 Brogden v Metropolitan Railway Company (1876–77) L.R. 2 App. Cas. 666

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CONTRACT LAW IN UNITED KINGDOM
Zehmer, the court held that one party could only act upon the other party’s intent when the
other party has subjectively revealed his or her intention.3 It is an important rule of common
law that acceptance must be absolute and unqualified to the terms that have been offered by
the offeree. In the case where an offer has been made to the offeree but the offeree added
certain conditions to the offer, then the offer might fall down (Hyde v Wrench, 1840).4 So
there must be no variation in the term of the agreement, else there will be no contract. In
Powell v Lee5, the court held that an offer that is made by the offeror to the offeree must be
accepted either by the offeror himself or by an authorized agent of the offeree and the news
of such acceptance must be communicated to the offeror (Entores v Miles Far East Corp,
1955).6 In the case where the offeror does not have knowledge about the acceptance of the
offer, there is no obligatory acceptance. However, acceptance can be withdrawn at any time
before it’s accepted by the offeror. This is known as a revocation of the offer. In the case of
Payne v Cave, the court held that a party is not obligated by an agreement until the whole
process of offer and acceptance has been formally performed.7 The court further held that an
offeror has a right to withdraw an offer before its formal acceptance. However, there is some
exception to the communication rule. In the case of Carlill v Carbolic Smoke Ball Company,
the court held that in cases of unilateral contract, where the offeror makes the offer to the
3 Lucy V Zehmer, 196 Va 493 84 S.E. 2d 516
4 Hyde v Wrench [1840] 3 Beav 334
5 Powell v Lee (1908) 99 LT 284
6 Entores v Miles Far East Corp [1955] 2 QB 327
7 Payne v Cave (1789) 3 T.R. 148; 100 E.R. 502

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CONTRACT LAW IN UNITED KINGDOM
whole world, acceptance of the same could be done either by performing act stated in the
offer.8 In case, where the offeror failed to receive the acceptance of an offer by the offeree
due to his own fault, he or she cannot claim that no contractual obligation derives upon him
or her due to the non-communication (Entores v Miles Far East Corp, 1955).9 The common
rule for acceptance by post is that it becomes effective from the time it is posted rather than
when it is communicated. In the case of Adams v Lindsell, the court following the traditional
postal rule held that it is impossible for the offeror to understand the intention of the offeree
unless the express words of acceptance of the terms are communicated to them.10 However, in
cases of offer and acceptance through the post, the offer can be said to have been active until
it reaches the offeree and after the offeree posted her acceptance, it can be said that offer is
accepted in due course of post. The traditional title ‘postal rule’ was ambiguous because the
rule does not only relates to the post but could also be potentially applicable to other slow
modes of communication. In the case of Cowan v. O'Connor, it was held that in cases of
telegram posts, an acceptance becomes effective when the telegram was placed with the Post
Office.11 An offer made through post must be accepted in the same way. However, in the case
of Henthorn v Fraser, the court held that, in cases where the offer has been made through any
other mode than post but the offeree accepted it through the post, it would be considered as a
valid acceptance provided there is no special mention about the mode of acceptance.12 In the
8 Carlill v Carbolic Smoke Ball Company [1892] EWCA Civ 1
9 Entores v Miles Far East Corp [1955] 2 QB 327
10 Adams v Lindsell (1818) 1 B & Ald 681
11 Cowan v. O'Connor (1888) 20 Q.B.D. 640
12 Henthorn v Fraser [1892] 2 Ch 27