Acceptance and counteroffer PDF

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Summary

Includes an explanation of what acceptance is in contract law and as well counteroffers. Also includes case law....

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LECTURE III ACCEPTANCE Acceptance is the final and unqualified expression of assent to the terms of an offer. The basic idea of an agreement has the two elements of acceptance and offer. Characteristics of acceptance 

It has to be final.

If you continue to negotiate, it will not be final. 

It must match the offer.

The ‘Mirror Image’ rule 

It has to be clear as to the set terms being accepted.

NB: Peter Lind & Co. Ltd v Mersey Docks & Harbour Board 

It has to be unconditional.

Counteroffer An offer cannot be accepted by a reply that varies one of its items and introduces an entirely new term. Only the last offer submitted survives and is available to acceptance (last shot doctrine). NB: Hyde v Wrench (1840) A rejection of an offer destroys it. A counteroffer acts as a rejection to the original offer. The ‘Mirror Image’ rule gives rise to the ‘battle of the forms’. Most companies have their standard terms. The ‘battle of the forms’ occurs mostly when companies clash over their different standard terms. The court usually does not want to interfere in this dispute. NB: British Road Services v Arthur Crutchley Ltd The court usually sorts out the ‘battle of the forms’ by using the offer-counter-offer analysis. How to handle the ‘battle of the forms’. 1. The contract is made on the terms of the party whose form was put forward first. This can apply where the second terms are different from the first and the second terms have not been given to the first. 2. The last shot doctrine (most commonly used).

The contract is made on the terms of the party whose form was put forward last (usual offercounteroffer analysis). 3. Strict application of the classical offer and acceptance principle. There is no contract at all. Cross offers When two parties make offers that are in acceptance of each other’s terms. There are no contracts. One party has to accept the other party’s offer. Both offers do not mean that the agreement is made. Motive NB: Williams v Carwadine (1833) SC & P 566 Motive is not important when it comes to acceptance. As long as you bring yourself within the terms of the acceptance. NB: R v Clarke Acceptance in ignorance of the offer. Knowledge is necessary for an effective acceptance. NB: Gibbons v Proctor (1891) Butler case...