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Contract: Essential Requirements and Formation

The rules of acceptance

  • 3 things to know
  • Components 2 and 3

Overview

Acceptance in contract law, mirror image rule and effect of a counter-offer.

What you need to know

Answer each one before you reveal it.

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Key term

What must an acceptance do for a contract to arise, and what happens if the terms are varied?

Key term

Define acceptance in contract law.

Key term

What is the mirror image rule?

Questions from this subtopic

Each one with the model answer underneath.

  1. 1

    Define acceptance in contract law.

    Model answer

    Acceptance is a final and unqualified agreement to all the terms of the offer. Acceptance must correspond exactly with the offer for a contract to arise.

  2. 2

    What is the mirror image rule?

    Model answer

    The mirror image rule requires the acceptance to match the offer exactly. Any variation of the terms is a counter-offer rather than an acceptance.

  3. 3

    What is the effect of a counter-offer?

    Model answer

    Hyde v Wrench (1840) held that a counter-offer destroys the original offer. The offeree who counter-offers cannot afterwards accept the terms first proposed.

  4. 4

    How does a request for information differ from a counter-offer?

    Model answer

    Stevenson, Jaques & Co v McLean (1880) held that a query about delivery terms was only a request for information. The original offer therefore remained open for acceptance.

  5. 5

    How do the courts resolve a battle of the forms?

    Model answer

    Butler Machine Tool Co v Ex-Cell-O Corp [1979] applied the last shot principle to conflicting standard terms. The contract was made on the terms of the final document that the other side acted upon.

  6. 6

    Can silence amount to acceptance?

    Model answer

    Felthouse v Bindley (1862) held that silence cannot be treated as acceptance. An offeror cannot impose a contract by saying that no reply will be taken as agreement.

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