2.9 Methods of acceptance

We now turn to look in more detail at the issues of acceptance. The adoption of an approach to identifying agreement based on a reasonable interpretation of behaviour means that there is clearly potential for types of behaviour being considered adequate to indicate acceptance.

2.9.1. Acceptance by conduct

In unilateral contracts, the acceptance will always be by conduct - using the smoke ball, digging the garden, etc - though there are some problems as to just what conduct amounts to acceptance. Can the same apply in bilateral contracts, so that they too can be accepted by conduct? In some everyday situations, this would seem to be the case. In a shop transaction, for example, there may be no exchange of words between the customer and cashier. The customer may simply present the goods selected together with payment, constituting an offer to buy, which will be accepted by the cashier taking the money and, generally, giving a receipt.

Can there be acceptance by conduct in more complicated, commercial transactions? This issue was considered in Brogden v Metropolitan Railway. The plaintiffs sent the defendants a draft agreement for the supply of a certain quantity of coal per week from 1 January 1872, at £1 per ton. The defendants completed the draft by adding the name of an arbitrator, signed it and returned it to the plaintiffs. This constituted an offer. The plaintiffs’ manager, however, simply put the signed agreement into a drawer. There was no communication of acceptance by the plaintiffs. Coal was ordered and delivered on the terms specified in the contract for a period of time, until there was a dispute between the parties. The defendants then argued that there was no contract, because the plaintiffs had never accepted their offer, as contained in the signed agreement. The House of Lords confirmed that it was not enough that the plaintiffs should have decided to accept: there had to be some external manifestation of acceptance. In this case, however, that was supplied by the fact that the plaintiffs had placed orders on the basis of the agreement.

The defendants should therefore be taken to be bound by its terms.

This decision confirms that a bilateral contract may be accepted by conduct, and there is no need for a verbal or written indication of acceptance. In Brogden, the ‘external manifestation’ of acceptance (that is, the placing of orders) was also a ‘communication’ to the other party. What is the position if there is conduct by one party which objectively indicates an intention to accept, but the other party is unaware of it? It is to that issue that we now turn.

2.9.2. Acceptance by silence

In Brogden v Metropolitan Railway, as we have just seen, it was held that you cannot accept a contract simply by deciding that you are going to do so. There must be some external evidence which would lead a reasonable person to believe that your intention was to accept. Does that external evidence have to come to the attention of the other potential party to the contract, or is it enough that there was agreement, even if one side was in ignorance of it?

In some cases, the issue will be determined by the form of the offer. In unilateral contracts the offeror may waive the need for communication of acceptance. The court thought that it clearly could not have been intended that everyone who bought something in reliance on the company’s advertisement should be expected to tell the company of this. It would be perfectly possible, of course, for an offeror to require such notice, but where an offer is made to the world or where a reward is offered for the return of property or the provision of information, the intention to waive such a requirement will easily be found.