Monday, 1 July 2013

[Contract] Acceptance in Australian Law of Contract

Definition of Acceptance

An acceptance is an unqualified assent to the terms of an offer.

Subjective v Objective Approach 

Subjective approach- No creation of contract unless "meeting of the minds"

Objective approach- Only looks to external manifestations of consent without the need "meeting of the minds".

Application of objective approach in Fitness First v Chong

She was unaware that it stipulated a $200 cancellation fee
Tribunal Member
Held that the parties did not have “the requisite consensus ad idem” required for a valid contract
Appeal (with Harrison AsJ)
By signing the form, Ms Chong had manifested her assent to the printed terms and it was irrelevant that there was no true consensus ad idem between the parties.

Rejection and counter offers 

In Hyde v Wrench [3], the court held that the original offer was destroyed when a counter offer was made. This decision was followed by Harris v Jenkins [4]

Communication of acceptance 

a) General rule

General rule is that acceptance only comes to effect when it is communicated to the offeror.

Bowen LH in Carlill v Carbolic Smoke Ball - notification of acceptance required because this establishes that the minds of the two parties have come together and formed consensus. This means that contract formed when acceptance received by the offeror.

However, unilateral contracts are always accepted by the doing of an act (see Carbolic Smoke Balls).

Latec Finance Pty Ltd v Knight

Hirer (Knight)
Unsatisfactory about the television set and returned it to the dealer before any installments were paid.
Hire-purchase company (Latec)
The company argued that contract has been formed when acceptance of offer was noted on the document but was not communicated.
NSW Court of Appeal
Stated that there are two ways of expressly or impliedly dispensing the need for actual communication.
1) may agree to treat the doing of an act as an effective acceptance (bilateral contracts can also be formed in this way)
2) may treat the dispatch of an acceptance by a particular method as effective, whether or not the acceptance is received by the offeror
No contract – clear language would be required to support such a construction of the document because, if signing without notification were enough, it would give the company power to “keep the form in their office unsigned, and then play fast and loose as they pleased”.

1 comment:

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