Acceptance
Acceptance validates the contract; it gives it life. It is at that moment that a contract exists; that there is consensus ad idem (assuming a valid offer and consideration). It also must be clear, unequivocal, unconditional and made by the person to whom the offer is intended.
It is not enough to say that you find the offer to be "agreeable"; you must "accept" the offer although your acceptance can be implied by your conduct. It must also be brought to the direct attention of the offeror before a valid contract exists.
Conduct can amount to acceptance in the proper circumstances such as the delivery of the goods mentioned in the offer. The courts have laid down two conditions for conduct to be equated with acceptance:
that the conduct was an expression of acceptance and not done for some other reason or motive, and
that the action or conduct was intended as acceptance.
If a judge were called upon to assess conduct for this reason, the judge would not weigh the acceptor's conduct subjectively, but would decide if a "reasonable person" would infer acceptance from that conduct.
The offeror can dictate the terms of the acceptance. Offers may set certain conditions on acceptance and to these, the acceptor is bound. For example, the offer may require acceptance in writing (if such a requirement has not been made, then a written offer may be accepted verbally.) In one case, a mobile home was purchased. With the home came a warranty card which had to be returned to the manufacturer for it to be held valid. The card was not sent to the manufacturer. The warranty was said to not apply because the purchaser never accepted the manufacturer's offer.
To this legal quagmire, should be added those rare situations where someone puts out an offer at-large, such as the Carbolic Smoke Ball Co. did in 1893. The company put a sum of money on deposit with a bank and said they would pay this money to anybody who got influenza while using their product. Well, a consumer caught influenza. The courts held that a special "unilateral contract" could be created in these circumstances and the Smoke Ball Co. had to pay up.
One trick offerors sometimes attempt is to say that the proposed acceptor's silence will amount to acceptance. This is invalid and cannot have the effect of forcing a person to a contract without the requisite of positive acceptance, delivered to the offeror, either in words or conduct.
Another game potential contractors play with one another is called the "battle of the forms". This happens when, for example, I send you an offer and you amend it slightly and then send it back signed but amended! This action destroys the original offer and is not acceptance. It is a new offer entirely, called a counter-offer. Only if the person who submitted the original offer accepts the counter-offer, would you have yourself a contract.
One interesting problem that has surfaced in contract law is the use of modern technology in the communication of an acceptance. It has led to an exception to the general rule that acceptance must be personally delivered to the offeror. In the absence of specific instruction to the contrary by the offeror, a person may mail an acceptance to the offeror and the contract is said to be perfected when the acceptor places this acceptance in the mail box for return mail even if, in fact, it never reaches the offeror. This is known as the "postal rule." If the post office loses or delays the acceptance letter, there is still a binding contract. The rule was summarized in a 1892 case Henthorn v. Fraser as follows: "Where the circumstances are such that it must have been within the contemplation of the parties that, according to the ordinary usages of mankind, the post might be used as a means of communicating the acceptance of an offer, the acceptance is complete as soon as it is posted."
If the acceptor decides to use another means of delivery than that requested by the offeror, then the acceptor assumes any risk associated with that means of communications; if nondelivery occurs for technical reasons, there is no contract.
The implications of the above used to be important in determining not only where the contract was made but then, under which law will the contract be subject? The general rule is the law of the state where acceptance was brought to the offeror's attention, except for situations where the "postal rule" applies. Then, since the contract is perfected wherever the acceptance is posted, it would be that law which would apply. However, courts no longer solely rely on those strict rules for deciding which law to apply to a contract. A fairer, more general rule now applies wherein the laws of the state with which the contract has the "closest and most real connection" will apply. As this is an area of the law that is uncertain, many contracts specifically state which laws will apply to resolve any dispute about the contract.
A contract requires a meeting of the minds, which Roman law called a consensus ad idem. If one or both parties have been mistaken about an element of the contract, then there is no consensus ad idem. But that does not necessarily mean that the contract is void. Such a rule could breed abuse. So the common law has tried to develop a fairly sophisticated set of rules for dealing with mistake. Unfortunately, as with so much of contract law, the final determination of what those rules are is still up in the air, moving with the changing currents of the courts.
The postal rule does not apply if (1) the express terms of the offer specify that the acceptance must reach the offeror and (2) if, having regard to all the circumstances, including the nature of the subject-matter under consideration, the negotiating parties cannot have intended that there should be a binding agreement until the party accepting an offer ... had in fact communicated the acceptance or exercise to the other." See also the Saskatchewan River Bungalows case in the Page 3 From the Case Books section where wording such as "the acceptance must be received at the head office of X" would preclude the postal rule unless there had been representations that communication by mail was acceptable or encouraged.
8