An
acceptance can be defined at unqualified con session of the terms of an offer
as conveyed by the offeror. Acceptance can also be defined as an offeree’s
assent, either by express act or by implication from conduct, to the terms of
an offer in a manner authorized or requested by the offeror, so that a binding
contract is formed. It is the elements
of acceptance that underscores the bilateral nature of a contract. In Orient
Bank vs Bilante Intl the court identified three ways by which acceptance can be
inferred: By words, by conduct and by vicomte passing between the parties.
INVALID ACCEPTANCE
Mental Acceptance/Acceptance without
communication: This is a situation in which there is no
external manifestation of acceptance. In this case, acceptance is simply not
communicated to the offeror. Even if there was an intention to accept, the
absence of an external manifestation makes it invalid. In each case of
Felthouse vs Bindley, the plaint off made an offer to his nephew and he stated
that if he did not receive a reply he would assume that the offer has been
accepted. His nephew intended to sell him the horse however, it was mistakenly
auctioned. The plaintiff subsequently sued the auctioneer for conversion. The
court held that there was no valid contract between the plaintiff and his
nephew due to the fact that the acceptance had no external manifestation, thus,
it was invalid.
Counter-Offer: A
counter offer is a situation in which the offeree introduces a new term to the
initial offer as conveyed by the offeror. The addition of an extra term
terminates the initial offer and it thus becomes a new offer which the former
offeror is at liberty to accept or reject. In the case of General George Innih
vs Ferado Agro Consortiums Ltd, The appellant offered to sell some properties
to the plaintiff provided acceptance was within three days. The respondent
replied that it ‘accepted’ the offer but it asked for an extension of two
weeks. The appellant immediately sold the assets to a third party. The respond
thus sued for breach of contract.
The
respondent won in the high court. On appeal, the court of appeal ruled that the
introduction of a new term was a counter offer. This was irrespective of the
fact that the respondent said it accepted the offer. The counter offer terminated
the initial offer was a new offer which the appellant could either accept or
reject.
Conditional Acceptance: This is
a situation in which an acceptance is said to be subject to the fulfillment of a
condition. An example is in the case in which an agreement is subject to a
contract. In the case of Winn vs Bull it was decided that this meant that the
acceptance is not complete until the drawing up of a formal contract.
In the
case of UBA vs Tejumola and Sons, the appellant requested for a lease from the
respond. The request was however headed “subject to contract”. Subsequently,
there was an agreement between both parties. However, the appellant later
resulted from the agreement. The respond sued for breach of contract.
The
respondent won in the high court and the court of appeal. However, the supreme
court overturned the judgement. The court held that the presence of the phrase
“Subject to contract” meant that subject to the drawing up of a formal
contract, the parties are still in the negotiation stage. However, Nnaemeka Agu
JSC added that if all the basic terms to the contract have been agreed upon,
the insertion of ambiguous words was just mere cosmetic surplussage.
Cross Offer: This
is a situation in which there are two simultaneous offers between both parties
which have similar terms but they ‘cross’ at the post. In the case of Tinn vs
Hoffman & co, there were two simultaneous offers by both parties which had
identical terms. The offers crossed at the post. Subsequently, one of the
parties contended that there was a valid contract. The court held that this was
impossibility due to the absence of consensus ad idem between both parties.
Acceptance in Ignorance of Offer: In
this situation an act is done which coincides with a unilateral offer of reward.
However, the performer of the act is ignorant of the offer. In the case of
Fitch vs Snedaker, it was held that in this situation the act can’t be said to
be a valid acceptance. This is due to the fact that someone can’t accept
something which he has no knowledge of.
COMMUNICATION OF ACCEPTANCE
As
provided in the case of Felthouse vs Bindley, an acceptance is invalid unless
it is communicated to the offeror. However, there are situations in which the
communication of acceptance is implicitly done away with. In the case of
Carlill vs Carbolic Smokeball co it was held that in unilateral contracts the
communication of acceptance is implicitly done away with.
In
order to fully understand this concept, the following outline would be used:
- Moment of acceptance
- Where method of acceptance is prescribed
- Where method of acceptance is not prescribed
- Acceptance by post
- Exception to the rule of acceptance by post
- Revocation of acceptance
- Moment of Acceptance
A
Pertinent question to be asked is where acceptance takes place. Is it where it
was accepted or where it was received? In the case of Entores vs Miles Far East
co, Lord Denning held that an acceptance validly takes place where it is
received not where it is posted. Thus, if an acceptance is posted in Nigeria it
becomes valid when it is received in America. Therefore acceptance is valid at
the moment of acceptance.
Where Method Of Acceptance Is Prescribed
Another
issue to be considered is what happens if the method of acceptance is
prescribed. The common law provisions are in conflict with Nigerian judicial
and legal provisions. The provisions of the English legal system would be
considered then the provisions of the Nigerian legal system would also be examined.
In the
English case of Manchester Diocesan council vs Commercial and general
investments Ltd, it was decided in a situation in which the method of
acceptance is prescribed, unless that particular method is mandatory, any other
method of acceptance that is faster would be valid. However, in the Nigerian
court of appeal case of Orient Bank vs Bilante Intl it was held that whenever a
method of acceptance is prescribed, any other method used would be invalid.
This was according to the provisions of S.109(1) of the Contract Law of Anambra
state.
The
burning issue then is which of the decisions is binding. As was tritely stated
in the case of Alli vs Okulaja decisions of courts that are not of Nigerian
jurisdiction are not binding but are persuasive on Nigerian courts. Also, S.32
Interpretation Act provides that rules of common law, doctrines of equity and
statutes of general application before 1900 would be applicable in Nigeria only
to the extent that the local jurisdiction allows for it.
Thus,
it can be safe to conclude that the Nigerian decision overrules the foreign
decision.
Where Method Of Acceptance Is Not
Prescribed
Where
the method of acceptance is not prescribe, the method used should be the method
used in making the offer. Thus, if an offer is oral acceptance should be oral,
if offer is written, acceptance should also be written.
Acceptance by Post
As is
trite, to every general rule there is an exception. Acceptance by post is an
exception to the rule that acceptance is valid only when it is received. In the
case of Adams vs Lindsell it was decided that where acceptance is by post, it
becomes valid when it is posted and not when it is received. This decision was applied in the case of
Household Fire insurance Co vs Grant. In this case, the defendant offered to
buy shares in the company which accepted by post. However, this letter of
acceptance wasn’t received by the defendant. When the company got liquidated,
the defendant was held liable to some sum of money. He resisted paying the
money and was thus sued to court. The court, in applying the decision in Adams
vs Lindsell held that the letter of acceptance was valid even though it didn’t
get to the defendant. Thus, the
defendant was held liable.
Exceptions To The Rule of Acceptance By
Post
Where
the offer expressly states that acceptance by post has to reach the offeror. In
the case of Holwell Securities Ltd vs Hughes, the offer expressly stated that
acceptance should be by notice in writing. The court subsequent held that the
acceptance was invalid because it did not reach the offeror.
Where the letter of acceptance is wrongly
posted
In
situations where it will produce manifest absurdity and inconvenience. An
example of this was provided in the case of Holwell Securities ltd vs Hughes,
where the court rhetorically asked if a young soldier ordered overseas would be
bound by a contract to marry a girl who accepted the proposal by post but it
didn’t reach him?
Revocation
of acceptance
Generally,
an acceptance which is not by post can be revoked if the revocation reaches the
offeror before the acceptance does. It is not clear if this would be acceptable
in an acceptance by post. This is due to the fact that when a letter of
acceptance is already posted, there is a binding contract.
However,
in the United States case of Dick vs Us there was an acceptance by post that
was revoked by telegram. The telegram in this case got to the offeror before
the acceptance by post. It was held that due to this, the acceptance was
successfully revoked.
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