1) i) ii) iii)

Contracts I Introduction Essentials of a valid contract Offer and acceptance

WHAT IS A CONTRACT? Def: An agreement enforceable by law, between two or more persons, to do or abstain from doing some acts. (CIPS) An agreement between 2 or more parties, w ic generates rig ts and obligations and is intended to a!e legally enforceable conse"#ences. ($n%nown) A legally binding agreement between two or more parties, by w ic rig ts are ac"#ired by one or more to acts or forbearances on t e part of t e ot er or ot ers (Sir &illiam Anson). For a simple contract to exist there must be an intention by parties to form a legally binding agreement and some consideration must have passed from one party to another. At the heart of every contract lies an agreement. Def: Agreement means a 'meeting of minds( or t e 'consens#s ad idem(. (CIPS) In ot er words, t e parties are agreed abo#t t e same t ing A)D t ey intend t e agreement s o#ld be legally enforceable. CLASIFICATION Contracts can be classified according to their enforceability 1. Void contracts A void contract is one !here the !hole transaction is regarded as a nullity. It means that at no time has there been a contract bet!een the parties. Any goods or money obtained under the agreement must be returned. "here items have been resold to a third party# they may be recovered by the original o!ner. $. Voidable contracts A contract !hich is voidable operates in every respect as a valid contract unless and until one of the parties ta%es steps to avoid it. Anything obtained under the contract must be returned# insofar as this is possible. If goods have been resold before the contract !as avoided# the original o!ner !ill not be able to reclaim them. &. nen!orceable contracts An unenforceable contract is a valid contract but it cannot be enforced in the courts if one of the parties refuses to carry out its terms. Items received under the contract cannot generally be reclaimed. "SS"NTIALS OF A VALI# CONTRACT 'here are se$en essential elements of a legally enforceable contract. 1. Agreement ( i.e. offer and acceptance $. Intention to create legal relations 1

&. ). *. ,.

Consideration Form +egality i.e. the contract must not be illegal. 'rue consent ( i.e. there must be no vitiating factors.

a) A%R""&"NT 'he first re-uisite of any contract is an agreement .consisting of an offer and acceptance). At least t!o parties are re-uired/ one of them# the offeror# ma%es an offer !hich the other# the offeree# accepts. For there to be a contract# a valid offer must thus be validly accepted. i) OFF"R 0efinition1 An expression of !illingness to enter into a contract on definite terms# as soon as these terms are accepted. .2aalemi) A statement of !illingness to be bound by the terms of the offer .un%no!n source) An expression of !illingness to contract on certain terms# made !ith the intention that it shall become binding as soon as it is accepted by the person to !hom it is addressed .un%no!n source) An offer is an expression of !illingness to contract made !ith the intention that it shall become binding on the offeror as soon as it is accepted by the offeree. .3n%no!n source) 0uring an offer# the offeror .the person ma%ing the offer) !ill give details of the offer to the offeree .the person receiving the offer) so that it can be considered. 4o!ever# in some situations# you might thin% an offer has been made !hereas there is no offer at all but a mere invitation to treat. An offer may be made to a particular person or to a group of people or even the !orld at large follo!ing the decision in Carlill v. Carbolic Smoke Ball Co. (1893). If the offer is restricted then only the people to !hom it is addressed may accept it/ but if the offer is made to the public at large# it can be accepted by anyone .as evidenced by Carlill. 5elo!) 'R"(R") ISIT"S OF A VALI# OFF"R 'here are !i$e pre6re-uisites of a valid offer. 'o be valid# an 7offer7 m*st be1 1+ Clear, definite and unequivocal: 'he 7offer7 must represent a definite and une-uivocal statement of !illingness to be bound in contract i.e. it must not be fla!ed by vitiating factors such as duress or undue influence. 8oreover it cannot be vague or uncertain in its interpretation. An 7offer7 to sell someone a particular car for 9*#::: !ill be an 7offer7. 5ut a statement that a person may sell one of his cars for about 9*#:::7 !ill not constitute an 7offer7 for it is uncertain and vague. It is for the parties to ma%e their intentions clear. Conse-uently# the courts !ill not enforce ;ague agreements or Incomplete agreements1 In this case the courts refused to enforce an 7agreement to negotiate in good faith7# 7an agreement to ma%e an agreement7 !ill al!ays be void. $

,+ One that the offeror intend to be bound b!" 'here must be a clear intention of !illingness at the time the contract is made to be bound by the 7offer7. All the offeree has to do is accept the terms as laid do!n by the offeror and the contract !ill be complete. 'he offeror must not be merely negotiating. -+ #ade to a $er on, a %rou$ of $er on or the &hole &orld at lar%e" An example of an offer being made to the !hole !orld is provided by the leading contract case of Carlill !. Carbolic Smo%e *all Co. (+,-.). .+ Communicated b! the offeror, o that the offeree ma! either acce$t or re'ect it" i.e. a person cannot accept an offer of !hich he has no %no!ledge. In order to be valid the offer must actually reach the person to !hom it !as made to be capable of acceptance i.e. the offeree must %no! of its existence as evidenced by the case of1 / !. Clar%e (+-20). In this case the <overnment of "estern Australia offered a free pardon to the accomplices of certain murderers if they gave evidence that !ould lead to their arrest and convictions. Clar%e provided the information but admitted that he !as not a!are of the re!ard at the time he gave the information to the authorities. 'he court held that he could not claim the re!ard of a free pardon because he !as not a!are of the 7offer7 at the time he gave the information. /+ O$en &hen it i acce$ted i.e. till in force" 'hat is it must still be in force at the time !hen the offeree accepts it. It is important to note that !hen an offer has terminated it is no longer capable of acceptance by the offeree. 3ntil such time as all of the above conditions are present the 7offer7 !ill not be valid and as such is incapable of acceptance by the offeree. #ISTINCTION OF OFF"R FRO& INVITATION TO TR"AT An offer must be distinguished from an invitation to treat. 'he latter is merely an invitation to ma%e an offer and no contract can result from it alone. O!!er In$itation to treat =rovides details of the offer =rovides information Offeror indicates !illingness to enter into Invites negotiation but does not express an agreement !illingness +egally binding >ot legally binding

'hus# invitation to treat are merely ?offers to negotiate@ and occur in the stages prior to offering being made. Examples (eque t) u$$l! of information An example of a re-uest for information occurred in1 1ar!ey !. 2acey (+,-.). = sent a telegram to 0# saying1 &ill yo# sell #s *#mper 1all Pen3 4elegrap lowest cas price . 0 replied by !ire1 5owest cas price *#mper 1all Pen for 6-77 . = promptly sent another telegraph1 &e agree to b#y *#mper 1all Pen for 6-77 . 'he sale never !ent ahead# and = sued.

&

4E+01 'he first telegram !as a mere re-uest for information. 'he second !as information supplied as re-uested. 'he third !as the only one !ith any contractual meaning# as it constituted an offer to buy for 9A::. 'his offer !as never accepted# so no contract came into being. *nvitation to tender 'hese are not normally held to amount to an offer to contract !ith the highest bidder .2pencer v 4arding 1BC:). 2pecial !ords may ho!ever ma%e an apparent invitation to treat an offer e.g. competitive tendering 1ar!ela In!estments 5td ! /oyal 4r#st Co. of Canada Doyal 'rust invited offers by sealed tender for shares in a company and undertoo% to accept the highest offer. 4arvela bid E$#1C*#::: and 2ir +eonard Outerbridge bid E$#1::#::: or EC*#::: in excess of any other offer. Doyal 'rust accepted 2ir +eonard7s offer. 'he trial Fudge gave Fudgment for 4arvela. 'he commitment to a!ard the tender to the highest bidder made the invitation an offer. +uction 'echnically under contract la!# auctioneer@s re-uest for bids is an I'' and each bid is an offer. A sale is only complete .leading to contract formation) !hen the auctioneer announces its completion by the fall of the hammer# or in any other customary manner. 3ntil such announcement is made# any bidder may retract his bidG. 'his came out in *ritis Car A#ctions 5td. 8 &rig t In sale of un6road!orthy second6hand cars# the courts held the auctioneer does not offer goods for sale but it@s an I''. 'he highest bidder !as allo!ed to !ithdra! his bid. Further# an advertisement that an auction !ill be held# is not an offer# 5ut an advertisement to hold an auction H!ithout reserveG does amount to an offer to sell to the highest bidder# accepted by submission of the highest bid. #ere tatement of $rice Can be difficult to distinguish bet!een negotiations and offers. 2tatement of minimum price at !hich a party !ould sell# doesn@t amount to an offer# but an I''. 1ar!ey ! 2acey+-,. Facts above. 'he defendants telegram !as not an offer but simply an indication of the minimum price the defendants !ould !ant# if they decided to sell. 'he plaintiffs second telegram could not be an acceptance.. ,ood di $la!ed in a ho$ &indo& 2is er ! *ell +-9+# A shop%eeper displayed a flic% %nife !ith a price tag in the !indo!. 'he Destriction of Offensive "eapons Act 1A*A made it an offence to 7offer for sale7 a 7flic% %nife7. 'he shop%eeper !as prosecuted in the magistrates7 court but the Iustices declined to convict on the basis that the %nife had not# in la!# been 7offered for sale7.

+dverti ement 'hese are attempts to induce offers but not offers themselves. "hether advert is on paper or !ebsite# the principle remains. "hen you respond to advert you are then ma%ing an offer. Partridge ! Crittenden (+-9,) It !as an offence to offer for sale certain !ild birds. 'he defendant had advertised in a periodical 7Juality 5ramblefinch coc%s# 5ramblefinch hens# $*s each7. 4is conviction !as -uashed by the 4igh Court. +ord =ar%er CI stated that !hen one is dealing !ith advertisements and circulars# unless they indeed come from manufacturers# there is business sense in their being construed as invitations to treat and not offers for sale. 4o!ever# advertisements may be construed as offers if they are unilateral# i.e.# !hen they are open to the entire !orld to accept .e.g. offers for re!ards)# and re-uire response by action. Carlill ! Carbolic Smo%e *all Co :+,-.; + <* 2=9. An advert !as placed for 7smo%e balls7 to prevent influenKa. 'he advert offered to pay 91:: if anyone contracted influenKa after using the ball. 'he company deposited 91#::: !ith the Alliance 5an% to sho! their sincerity in the matter. 'he plaintiff bought one of the balls but contracted influenKa. It !as held that she !as entitled to recover the 91::. 'he Court of Appeal held that1 .a) 'he deposit of money sho!ed an intention to be bound# therefore the advert !as an offer/ .b) It !as possible to ma%e an offer to the !orld at large# !hich is accepted by anyone !ho buys a smo%eball/ .c) 'he offer of protection !ould cover the period of use/ and .d) 'he buying and using of the smo%eball amounted to acceptance. Catalo%ue and $rice li t In >rainger and son ! >o#g (+,-9) a price list circulated by a !ine merchant !as held to be an invitation to treat# not an offer. +ord 4erschell noted that/ 'he transmission of such a price list does not amount to an offer to supply an unlimited -uantity of the !ine described at the price named# so that as soon as an order is given there is a binding contract to supply that -uantity. If it !ere so# the merchant might find himself involved in any number of contractual obligations to supply !ine of a particular description !hich he !ould be -uite unable to carry out# his stoc% of !ine of that description being necessarily limited. -i $la! of %ood , elf ervice 'he rule on shop !indo! displays extends to self6service goods. In P armace#tical Society of >reat *ritain ! *oots Cas C emist 5td +-=. 'he defendants7 shop !as adapted to the self6service system. 'he -uestion for the Court of Appeal !as !hether the sales of certain drugs !ere effected by or under the supervision of a registered pharmacist. 'he -uestion !as ans!ered in the affirmative. 2omervell +I stated that in the case of an ordinary shop# although goods are displayed and it is intended that customers should go and choose !hat they !ant# the contract is not completed until# the customer having indicated the articles !hich he needs# the shop%eeper# or someone on his behalf# accepts that offer. 'hen the contract is completed. 'he purchaser ma%es the offer !hen goods are ta%en to the chec%outL counter.

T0'"S OF OFF"RS Co*nter O!!ers It@s a reply to an offer !hose effect varies the terms of the original offer. It operates as reFection of the original offer# thus extinguishing it. 1yde ! &renc 0efendant offered to sell farm at 1#::: pounds !ith plaintiff replying that he !as !illing to pay A*:. +ater on purporting to accept 1::: pounds and demanding specific performance# it !as held that he counter6offered and extinguishes original offer. A counter6offer can@t form a contract# but only if its accepted by the original offeror# then there !ill be a contract. Cross(o!!er If A offers to sell 5 property# and 5 !ithout %no!ing also offers to purchase the same property from A# each is a cross offer in relation to the other. 'hey are not mutual acceptances# thus no contract can arise. A must accept 5@s offer or vice6versa# for there to be a contract. Conditional O!!ers 'hese are made subFect to certain conditions. 2uch conditions may be imposed by the offer e.g. time limit for acceptance# or imposed by la!. If condition is not met# the offer fails and cannot be enforced. nilateral o!!ers 'hese can be accepted by anyone i.e. made to the !orld at large. And re-uire response by an action. 2ee Carlill ! Carbolic Smo%e *all Co abo!e. 1ilateral o!!ers Are made to specific individuals or companies. Standing O!!ers If the corporation advertises that it may re-uire specified goods up to a maximum amount# deliveries to be made if and !hen re-uired# the effect of acceptance is -uite different. 'he trader has made a standing offer. 'here is no acceptance by the corporation in the legal sense1 this !ill only ta%e place !hen a re-uisition for a definite -uantity of goods is made. Each re-uisition by the offeree# i.e. the corporation# is a separate act of acceptance !hich creates a separate contract. 2tanding Offer can be revo%ed at any time# although tenderer is bound by orders already made. T"R&INATIN% AN OFF"R T2is can be done b34 Acceptance DeFection Counter offer Devocation before acceptance 5y passage of time 5y failure of a condition precedent 5y death of a party before acceptance "56lanations ,

+cce$tance Once an offer has been accepted# a binding contract is made and the offer ends. (e'ection If the offeree reFects the offer that is the end of it. DeFection can either be outright .express or implied) or in the form of a 7counter6offer1 if acceptance is not a mirror image of the offer then it !ill amount to a counter6offer# and !ill terminate the original offer1 1yde !. &renc (+,?7). In this case the defendant offered to sell a farm for 91#:::. 'he plaintiff said he !ould only give him 9A*: for it. It !as held that this constituted a counter6offer# !hich terminated the original offer# !hich !as therefore no longer open for acceptance. (evocation 'he offeror may revo%e the offer at any time prior to acceptance1 /o#tledge !. >rant (+,2,). <rant offered to buy Doutledge7s house and gave him , !ee%s to accept the offer. 4o!ever# !ithin that period# he !ithdre! the offer. It !as held that <rant !as entitled to !ithdra! the offer at any time before acceptance and upon !ithdra!al# Doutledge could no longer create a contract purporting to accept it. Destrictions 1. 'he first condition is that the revocation must be communicated to the offeree for it to be effective. 'his raises t!o issues. i) =osting of the revocation letter not sufficient. *ryne ! 8an 4ien o!en 'he facts !ere as follo!s/ 1st Oct ( letter of offer posted in Cardiff# offering to sell 1#::: boxes of tinplates. Bth Oct6 letter of revocation of offer posted in Cardiff. 11th Oct6 letter of offer received in >e! Mor% and acceptance by 'elegram sent. 1* th Oct6 letter confirming acceptance sent. $:th Oct6 letter of revocation of offer received in >e! Mor%. 'he courts held the revocation not effective since it !asn@t effective till received and could not revo%e contract made on 11 th Oct. ii) Devocation may be communicated by any third party !ho is sufficiently reliable. Dic%inson ! Dodds An intermediary !ho had arranged for the claimant to get a house communicated that the house had been already sold to a third party before the claimant had accepted an offer made to him. 'hat !as held to be sufficient communication of revocation. $. A unilateral offer cannot be !ithdra!n if the offeree is performing since acceptance and performance are the same thing. &. In addition# revocation may either be by express statement or an act. Counter offer Acceptance must be un-ualified agreement to the terms of an offer. If any -ualification is placed# then it becomes a counter6offer. 2ee above for 1yde ! &renc (+,?7). 4o!ever# a counter6offer may be accepted by the original offeror.

*#tler mac ine tool co ! @ABcellBC Corporation 'he claimant proposed to sell tools to the defendant enclosing their standard terms in the -uotation. 'he defendant ?accepted@ the offer by issuing an order# but also included their o!n standard terms !hich !ere different from claimants@. 'he claimant ac%no!ledged acceptance of the offer by returning a tear off slip from the order form. 'he court held that the defendant@s order !as a counter6offer# but had been accepted by returning of the tear6off slip. .a$ e of time "here an offer is stated to be open for a specific length of time# then the offer automatically terminates !hen that time limit expires. "here there is no express time limit# an offer is normally open only for a reasonable time. In the event of a dispute about the duration of an offer the court !ill determine !hat is reasonable ( !hat is reasonable is a -uestion of fact to be decided in each case on its merits. An offer may lapse and thus be incapable of being accepted because of passage of time1 At the end of a stipulated time .if any) or If no time is stipulated# after a reasonable time1 /amsgate 8ictoria 1otel Co. !.Dontefiore (+,99). In this case an attempt to accept an offer to buy shares after * months failed# as the offer had clearly lapsed. Five months !as not reasonable. /ailure of a condition An offer may be made subFect to conditions. 2uch a condition may be stated expressly by the offeror or implied by the courts from the circumstances. If the condition is not satisfied the offer is not capable of being accepted. -eath An offer !ill terminate on the death of the1 Offeror !here the offer !as of a personal nature# the offeree cannot accept an offer after notice of the offeror7s death. 4o!ever# if the offeree does not %no! of the offeror7s death# and there is no personal element involved# then he may accept the offer. Offeree1 An offer ceases# by operation of la!# on the death of the offeree. 'he better vie! is# probably# that it is terminated only if the offeree is a!are of the fact# unless the personality of the offeror is an essential ingredient of the matter. 7ii) ACC"'TANC" Acceptance is the unconditional assent to all the terms of the offer. "hen a valid acceptance follo!s a valid offer the contract is formed on acceptance .provided the other formalities are also in place). R L"S FOR A VALI# ACC"'TANC" Important to establish that the response to the offer is indeed an acceptance and is properly communicated to the offeror. 'here are rules of a valid acceptance. 1. Acceptance must be made !hile the offer is still in force. One cannot purport to accept an offer !hich has been revo%ed. see /o#tledge !. >rant abo!e B

$. Acceptance must be made by the offeree or his authoriKed agent. 'his is illustrated by1 Powell !. 5ee (+-7,) 'he claimant appointed a headmaster# !hich !as communicated to him by a member of the intervie! panel not authoriKed to do so. +ater# the panel changed their choice. 4e sued for breach. Courts held that the acceptance !as not communicated. &. Acceptance must be clear# absolute and un-ualified i.e. exactly match the terms of the offer1 If any alteration is made or anything added# then this !ill be a counter offer1 1yde !. &renc (+,?7) ). 'he offeror can re-uire any form of acceptance# !hether it be oral# !ritten or inferred from the conduct of the parties e.g. in Carlill !. Carbolic Smo%e *all Co (+,-.) 8rs Carlill !as held to have accepted the company7s offer by using the smo%e ball in the prescribed manner. *. A person cannot accept an offer he doesn@t %no! about. An offeree may perform the act that constitutes acceptance of an offer# !ith %no!ledge of that offer# but for a motive other than accepting the offer. 'he -uestion that then arises is !hether his act amounts to a valid acceptance. 'he position seems to be that1 .a) An acceptance !hich is !holly motivated by factors other than the existence of the offer has no effect. 2ee / ! Clar%e (+-20) ?7 C5/ 220B abo!e .b) "here# ho!ever# the existence of the offer plays some part# ho!ever small# in inducing a person to do the re-uired act# there is a valid acceptance of the offer. ,. Cross offers don@t amount to automatic acceptance. E.g. A !rites to 5 offering to sell certain property at a stated price. 5 !rites to A offering to buy the same property at the same price. 'he letters cross in the post. Is there .a) an offer and acceptance# .b) a contractN Iudges have ruled that cross6offers do not ma%e a binding contract. C. Accepting 'enders1 'enders are usually considered I''. 2uppose a local authority invites tenders for the supply of specified goods to be delivered over a given period. A trader puts in a tender sho!ing that heLshe is prepared to supply at a given price/ this is clearly an offer. 5ut there may be difficulty in deciding !hether subse-uent action by the corporation is an acceptance. 'here are t!o possibilities# depending on the !ording of the corporation7s original invitation. If the corporation states that it re-uires a specified -uantity of the goods during a particular period# then# on acceptance of the tender# the trader is bound to deliver# and there is a contract. If the corporation advertises that it may re-uire specified goods up to a maximum amount# deliveries to be made if and !hen re-uired# the effect of acceptance is -uite different. 'he trader has made a standing offer. 'here is no acceptance by the corporation in the legal sense1 this !ill only ta%e place !hen a re-uisition for a definite -uantity of goods is made. Each re-uisition by the offeree# i.e. the corporation# is a separate act of acceptance !hich creates a

separate contract. 2tanding Offer can be revo%ed at any time# although tenderer is bound by orders already made. B. Acceptance is not effective unless it is communicated to the offeror. 'hat means that silence cannot amount to acceptance. 2elt o#se !. *indley (+,92). In t is case t e plaintiff# =aul Felthouse# !rote to his nephe!# Iohn# on $ February# offering to buy his horse for 9&: 1*s# and added# EIf I ear no more abo#t im, I consider t e orse mine at t at price.E 'he nephe! made no reply to this letter# but intimated to the defendant# an auctioneer# !ho !as going to sell his stoc%# that the horse !as to be %ept out of the sale. 'he defendant inadvertently sold the horse to a &rd party at an auction on $* February and the plaintiff sued him. 'he court held that the plaintiff7s action must fail as there had been no acceptance of his offer to buy the horse before $* February. A. Acceptance is communicated to the offeror in several !ays. 'his raises several issues on communication of acceptance. CO&& NICATION OF ACC"'TANC" In some situations communication of acceptance can be !aived e.g. unilateral contracts or customary conduct bet!een parties. Acceptance of a unilateral offer does not need to be communicated because performance is the same as acceptance Carlill ! Carbolic Smo%e *all Co. Carlill. &et2od? Acceptance must be communicated in the precise !ay stipulated by the offeror unless an e-ually -uic%# efficient or reliable method is chosen e.g. via e6mail instead of facsimile. If the offeror suggests a particular form of acceptance# but does not insist upon this# then another e-ually effective method of acceptance !ill suffice. Conversely# if no particular method of acceptance is prescribed# the form of communication !ill depend on the nature of the offer and the circumstances in !hich it is made. If the offeree re-uires his offer to be accepted in a particular manner# then acceptance must accord !ith these re-uirements 'he main other rules are stated above. a) It must be carried out by the offeror or his authoriKed agent1 b) Acceptance is not effective unless and until it is communicated to the offeror c) An offeror may not state that silence shall amount to acceptance. 2elt o#se ! *indley 'he maFor rule on communication of acceptance is that communication of acceptance by post is subFect to the postal rule

1:

0o tal (ule 'he postal rule states that the communication of acceptance !ill be complete and effective at the point !hen the letter of acceptance is posted or placed into the hands of the relevant postal authorities not !hen it is received. 'he logic underlying the postal rule is that the main ris%s associated !ith its use lie !ith the offeror should the letter of acceptance be delayed or lost in the post. Dule applies !here letter of acceptance is received after notice of revocation of the offer is sent. Adams !. 5indsell (+,+,) On $ 2eptember# 0 sent a letter offering to sell = some !ool# and he re-uested an ans!er by post giving deadline of Cth 2eptember. 'he letter !as misdirected# and it did not reach = until * 2eptember. 4e accepted the same day. 4ad the offer been properly directed# an ans!er should have been received by C 2eptember ( so# on B 2eptember# 0 sold the !ool to someone else. =7s acceptance arrived on A 2eptember. 4E+01 'he contract !as formed on * 2eptember# !hen =7s acceptance !as posted. 0 !as# therefore# in breach of contract. 4o!ever# the so6called postal rule is not absolute and# in circumstances !here a contrary intention is indicated# it !ill be ignored. 4o!ever# the rule !as abused by many persons !ho despite being restricted to other methods of acceptance al!ays chose post due to its advantage. 'he courts have thus developed more rules to determine !hen the postal rule applies. W2en is acce6tance b3 6ost legall3 e!!ecti$e? Acceptance by post !ill only be effective !here acceptance by post is either the chosen# obvious or reasonable method of acceptance. Chosen method of acceptance. 'he post !ill be a chosen method of acceptance !here the offeror has stipulated that posting the acceptance is the only acceptable method. Obvious method of acceptance. 'he post !ill be an obvious method of acceptance in a standard business situation or !here the parties are communicating at a distance and the offeror re-uires a record of the reply. Deasonable method of acceptance. 'he use of the postal service is reasonable in the circumstances# for example# !here an offer has been made be post .i.e. by a letter of offer) and the offeror has indicated the use of the post for the purpose of ma%ing the acceptance .i.e. by a letter of acceptance). It !ill be the reasonable method of acceptance if an ordinary person# loo%ing at all the circumstances !ould assume that to reply by post !as the proper !ay to accept. Clearly# acceptance by post !ill not be reasonable !here there is a postal stri%e. 0espite the advantages of the rule# its notable that the postal rule can be excluded by the terms of the offer. &odern comm*nication met2ods 'elex ( offer and acceptance valid because method so instantaneous that parties are deemed to be dealing face to face# even though in different countries. 4o!ever# timings may cause problems ( e.g. faxes sent out of office hours 11

 E6mail1 a%in to postal since can be a delay bet!een 2end and DeceiveN 'he postage rule does not apply.

1$