LAW OF CONTRACT
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ACCEPTANCE
LAU BROTHER & CO v. CHINA PACIFIC
NAVIGATION CO LTD [1965]
Masters (purchaser) v. Cameron (seller) [1954]
91 CLR 353
Facts:
The parties signed a memorandum drawn up by the vendor’s agent, which
contained a clause to the effect that, “this agreement is made subject to the
preparation of a formal contract of sale which shall be acceptable to my
solicitors on the above terms and conditions…” The purchasers
(Masters) wanted to withdraw from the agreement.
Issue:
The question arose as to who was going to be entitled to the deposit.
If the contract was enforceable it would go to Cameron, and if it was not
enforceable it would go to Masters.
Judgment:
The agreement was not in its final form as it had to be acceptable to Cameron’s
solicitors. They could have altered the contract if they had wished to. Whether they
did or not was immaterial. Thus, there was no enforceable contract.
Low Kar Yit & Ors. v. Mohd Isa &
Anor [1963]
The defendant in this case gave an option to the plaintiff as to buy a
piece of land.
The agent of the plaintiff operated the option, but the defendant refused
to sign the sale agreement.
The plaintiff sued for specific performance for breach of contract.
I: Whether option is an agreement?
Judgment :
It was held that the option subject ‘to a formal contract to be drawn up
and agreed upon’ the parties, therefore it was a conditional option. The
option was merely an agreement to enter into an agreement. Therefore,
there was no legal binding contract between the parties.
Eliason v.
Henshaw
(1819)
On Feb 10th , 1813, E sent a letter by wagon to H offering to buy flour and
requesting the answer be sent by the returning wagon. However, H wrote an
acceptance on 15th and the letter was sent by the regular mail carriage on the 19 th .
E sent a reply on the 25th acknowledging the receipt of the letter but said that the
response was too late as it was not returned by the wagon. H sued for
nonperformance.
I: whether the acceptance was in a proper manner? / follow the stipulation?
Whether there was a binding contract when H accept?
H’s action for breach of contract failed as the acceptance was not in the
stipulated manner
FELTHOUSE V. BINDLEY(1862)
SILENCE’ SHOULD NOT BE ACCEPTED AS A FORM OF ACCEPTANCE
If I hear no more about him,
I consider the horse
Is mine at £30 15s.
Plaintiff made an offer to buy a horse nephew
no reply
sued
asked the auctioneer
to keep the horse out
of sale
H: there was no contract between the plaintiff and the
.”
defendant because the defendant had never communicated
Bindley
his acceptance. Silence is not acceptance.
(auctioneer)
12
sold it by mistake
BATTLE OF FORM??
Gen rule: acceptance must be communicated, so it must be
brought to the notice of the proposer. There are 2 exceptions:
If the parties agreed to use post as a mean of communication, then
the acceptance is complete when the acceptor post his letter of
acceptance.
SECTION 4(2)(A) CA
When the acceptor posts his letter of acceptance, the proposer is bound to perform his
obligation, even though the proposer has yet / does not know about the acceptance (the
letter does not reach the proposer/delay)
Example
Jack is bound at the time Lisa send her
LOA, even though Jack might not have
received the letter.
SECTION 4(2)(A) CA
Ignatius v Bell (1913) When the acceptor posts his letter of
The parties agreed to use the post as a means of acceptance, the proposer is bound to
communication. The def made a proposal to perform his obligation, even though
sell his piece of land. The option purchase must the proposer has yet / does not know
be exercised on or before 20.8.1912. about the acceptance (the letter does
The plaintiff sent his acceptance by registered not reach the proposer/delay)
post on 16.8.1912 but was only delivered to the
def on 25.8.1912.
The def closed deal another because did not
receive the reply. 1. Proposal
The plaintiff sued the defendant for specific D P
performance. On or before 20.8.1912
The court applying Section 4 and held that the
communication of acceptance was completed
when the plaintiff posted the acceptance on 3. Received 25.8.1912
16.8.1912, even though the defendant did not
know about the acceptance.
2. Registered post : 16.8.1912
SECTION 4(2)(B) CA
• When the acceptor posts his letter of acceptance (LOA), he is not bound
to perform his obligation until his LOA is received by the proposer.
Example
Albert is bound at the time Jenny send
her LOA, but, Jenny is not bound until
Albert accepted the letter.
(In the meantime Jenny may withdrawn
her acceptance)
BYRNE V
VAN TIEN HOVEN
The defendants wrote from Cardiff on 1 October offering to sell a
quantity of tinplates to the plaintiffs in New York.
On 8 October, the defendants posted a letter withdrawing the offer.
On 11 October, the offer reached the plaintiffs, who accepted at
once by telegram (and the plaintiffs also confirmed this in
writing on 15 October).
The defendants’ letter of withdrawal reached the plaintiffs on 20
October.
Held:??????
In some cases, the acceptance need not to be communicated to the proposer.
The fulfilment of the condition stated in the proposal by the acceptor is
considered as sufficient acceptance.
The roots of
education are bitter,
but the fruit is
sweet. – Aristotle
THANK YOU
