BetterLawNotes-5 (2)


An offer of itself creates no liability. For a contract to come into being, the offer must be accepted. Acceptance is an unqualified assent by the offeree to the terms of the offer, coupled, in the context of a bilateral contract, with a promise, express or implied, to perform the obligations imposed on the offeree in the offer. An ‘acceptance’ which introduces additional terms, or which otherwise modifies the terms of the offer, will not bring a contract into being. There are two elements then to an acceptance. First, there must be an assent. It seems that a mere mental assent on the part of the offeree is not sufficient.1 

‘when you come to the general proposition . . . that a simple acceptance in your own mind, without any intimation to the other party, and expressed by a mere private act, such as putting a letter into a drawer, completes a contract, I must say I differ from that.’ (The Directors of the Metropolitan Railway Company (1877) 2 App Cas 666, 692 (Lord Blackburn)).

Rather, there must be some external manifestation of agreement. Second, that assent must be unqualified. The offeree must be accepting the exact terms set out in the offer: those terms and only those terms. Identifying if and when an offer has been accepted is not always straightforward. Compare the following two cases.

Jones v Daniel [1894] 2 Ch 332

Daniel wrote to Jones offering to buy property from Jones at a certain price. Jones wrote back accepting the offer and enclosing a contract for Daniel to sign. The contract included various terms, such as requiring a deposit from Daniel and setting a completion date, which had not been referred to in Daniel’s offer. Subsequently Daniel returned the contract unsigned and declined to proceed with the purchase. Jones alleged a contract had been made and sought specific performance. Romer J held that there was no contract: Jones’s purported acceptance constituted a counter-offer and this had not been accepted by Daniel.

Whilst superficially similar, the opposite result to that in Jones v Daniel was reached in Perry v Suffields.

Perry v Suffields Ltd [1916] 2 Ch 187

Suffields wrote to Perry offer to buy a public house owned by him for £7,000. Perry wrote back accepting the offer. Subsequently, Perry’s solicitors sent a draft contract to Suffields’ solicitor. The draft provided for payment of a deposit and fixed a completion date. Suffields’ solicitor wrote back saying that these terms were not acceptable and declining to proceed with the purchase. The Court of Appeal held that Perry’s initial acceptance letter had brought a contract into being.

 In comparing these two cases, it is helpful to recognise that in Perry the introduction of the new terms came after the acceptance had been communicated. Perry’s initial response was an unqualified assent to the terms of the company’s offer. As we will see shortly, the communication of this acceptance acted to bring the contract into being. The provisions contained in the draft contract which was sent afterwards could not alter the fact that a contract establishing the terms of the transaction had already been formed.

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