Acceptance

Acceptance

1.Definition of Acceptance

The Restatement defines an acceptance as the offeree’s manifestation of assent to the terms of the offer,made in a manner invited or required by the offer. In general,only those persons in whom the offeror intended to create a power of acceptance may accept an offer. In addition, a person usually can only accept an offer if he knew of the offer at the time of the acceptance. For example, most courts have held that persons cannot claim rewards for a particular act if they performed the act without knowledge of the reward offer.

2.Requirements of Acceptance

A.Acceptance must be made in the manner expressly or impliedly prescribed by the offer­or; '

B.Acceptance must be made by the offeree or by someone acting with his authority;

C.Acceptance must be made within the period of validity of the offer,or within the reason­able time;

D.Acceptance must be unqualified and should be distinguished from a counter - offer, a conditional assent,a standing offer.

3.Mode of Acceptance

In general, the offeror may specify the required means of acceptance, because the offeror is the" master of the offer. " The Restatement provides that if the method of acceptance is not spec­ified , acceptance may be given in any manner and by any medium that is reasonable under the circumstances.

a.If the offer is an offer to form a unilateral contract (i. e. , where the offer seeks an ac­ceptance of an act,rather than a return promise) , the offeree can usually only accept by full performance.

If the offeree has begun the performance, however, the offer generally becomes temporarily irrevocable as to that offeree. (However,once performance has started,the offeree is not obligated to complete the performance. ) The offeree generally must give the offeror notice that he has performance.

b.If the offer is for a bilateral contract(i. e. where the offer seeks acceptance by a return promise) ,the offeree may accept by words or actions that indicate the offeree intends to enter a contract. In general, the offeree must communicate his acceptance to the offeror within the time set forth in the offer,or if no time is stated,within a reasonable time.

c.If the offer is unclear as to the modes of acceptance, an offeree can accept either by promising to perform or by actually performing. The UCC, which applies to transactions invol­ving the sale of goods,also provides that an offer or request to ship goods can be accepted by either promising to ship the goods or actually shipping the goods.

d.Acceptance by Silence. The Restatement allows a party to accept by silence in the fol­lowing situations; where the offeror gives reason to understand that silence may constitute ac­ceptance; an offeree that silently accepts services will be held to have accepted a contract for them if the offeree had an opportunity to reject them and knew or should have know that the provider expected compensation for his services; or where the parties have in the past allowed the offeree to accept by silence.

4.Battle of the Form

Most countries follow the mirror image rule. It requires that an acceptance be unconditional and that it not attempt to change any of the terms proposed in the offer; otherwise, the accept­ance contained different or additional terms is considered a counter - offer and thus a rejection of the original offer.

These requirements present special problems when both parties,buyer and seller,negotiate back and forth via" standard" business forms. The seller might rely on an order confirmation form or sales forms. Typically, these forms leave room on the front so the parties may insert im­portant contract terms such as price, quality, or ship date. The reverse side often contains de­tailed provisions or standard clauses, often called terms and conditions, or general conditions of sale. They are often drafted by attorneys to protect their client’s right,placing greater liability on the other party. In international trade practices, both parties may not even be aware of the legal significance of these seldom read provisions on the reverse side, because they usually read care­fully the crucial terms. Usually the preprinted terms on these forms differ,sometimes in signifi­cant ways and thus cause potential conflict. When this occurs,it is called a battle of forms.

Article 2.11 of the UNIDROIT HCC(   1^31 JWJ) states;

A reply to an offer which purports to be an acceptance but contains additions,limitations or other modifications is a rejection of the offer and constitute counter - offer, (ii) However,a re­ply to an offer which purports to be an acceptance but contains additional or different terms which do not materially alter the terms of the offer constitutes an acceptance,unless the offeror, without undue delay, objects to the discrepancy. If the offeror does not object, the terms of the contract are the terms of the offer with the modifications contained in the acceptance.

This obviously will help produce more contracts and promote international business trans­actions.

5.Time of Acceptance

Under the common law,a contract is formed when the acceptance is dispatched by the of­feree. Each contract comes into being at the moment of acceptance. It is therefore often impor­tant to determine the time and place the acceptance becomes effective.

Under the common law,a contract is formed when the acceptance is dispatched by the of­feree. The general rule of contracts made by post is that,offers and revocations are effective only upon receipt, but acceptances are effective upon posting. When acceptance is by post and tele­gram, it is generally deemed to occur as soon as the letter or telegram is posted. This is known as" Mail - box rule. "

There are two exceptions to this rule;

a.The postal rule can be excluded by the terms of the offer. If the negotiating parties do not intend to have a binding agreement until the party accepts an offer or exercising an option,

then there will be no contract unless acceptance is actually communicated. ,

b.The postal rule does not apply to acceptances made by some instantaneous mode of communication. An offer by telex is not accepted until notice of the acceptance is received by the offeror. The same rule will apply to facsimile transmittal or by telephone.

Another exception relates to the acceptance by performance. If the court treats an offer as one which invites acceptance either by promise or by performance, then the beginning of per­formance binds the offeror without regard to whether the offeror is aware of this event.