Acceptance of contracts

For a contract to be legally binding there must be clear acceptance of the contract and an intention to be legally bound. The three elements of a valid contract-offer, acceptance and consideration -must be present. Unless it is shown that there was an acceptance of an offer to enter into a contract there is no legal contract and no agreement capable of being enforced was made.

It matters little how an acceptance of contract takes place. There is no need for formality. It could be simply getting onto a bus and paying the fare or clicking ‘pay now’ on a website. It must however be communicated and must be unconditional. There will not be acceptance if the readiness to be bound is not made clear such as when a party says ‘I like that but let me think about it’.

There will also not be acceptance when it is subject to a condition unless the condition is subsequently accepted. This will in effect be a new offer. Thus if I say I will buy a car offered for sale at £500 less than the price asked I will only be bound if my offer of the reduced price is accepted.

The acceptance of an offer does not have to be spoken. Often actions will be sufficient.  However, silence will not usually constitute acceptance. In an old case a purchaser made an offer for a horse and said that if he did not hear from the seller otherwise he would consider the horse his. The court held that the assumption did not create a contract and that the assumption had to be clearly expressed.

The acceptance of an offer based upon untruths from the seller will not be effective and the contract can be declared void or damages claimed as based upon a misrepresentation. If unsolicited goods are received they will not be considered as accepted if they are not returned and can be treated as an unconditional gift.

When a purchaser needs time to consider an offer an option agreement can be entered into. This will oblige the seller (for consideration) to keep the offer open for as specified time and not sell elsewhere.

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