LAW5002 · Principles of Contract Law A
Acceptance
This chapter covers acceptance — the second element of agreement in LAW5002 Principles of Contract Law A at Monash University (Juris Doctor). Acceptance is a final and unqualified assent to an offer, made in response to it and communicated to the offeror; this chapter shows how the courts test correspondence with the offer, when acceptance takes effect under the general receipt rule, the narrow postal-acceptance exception and the electronic-communications rules, and how silence, conduct and the battle of the forms are handled. It is examinable as a formation problem question in the 60% final exam.
What this chapter covers
- 01What counts as acceptance — final and unqualified assent that corresponds with the offer (the mirror-image rule)
- 02Counter-offer vs mere inquiry — a new term kills the offer (Stevenson, Jaques & Co v McLean); an inquiry does not
- 03Acceptance must be made in response to, and in reliance on, the offer (The Crown v Clarke)
- 04The general communication rule — acceptance is effective on receipt (Latec Finance v Knight)
- 05The narrow postal-acceptance exception — complete on posting where post is contemplated (Adams v Lindsell)
- 06Electronic acceptances — effective when capable of retrieval at the designated address (Electronic Transactions (Victoria) Act 2000 (Vic) ss 13, 13A, 13B)
- 07Silence cannot be imposed as acceptance (Felthouse v Bindley), but acceptance may be inferred from conduct (Empirnall Holdings v Machon Paull Partners)
- 08Battle of the forms and the last shot (Butler Machine Tool v Ex-Cell-O); a contract inferred from conduct as a whole (Brambles v Bathurst)
- 09Putting acceptance, revocation, rejection and lapse on one timeline to decide when (and whether) a contract formed
Was a binding contract formed? Counter-offer vs acceptance, and email timing
- +1Issue. (a) Is Theo's first reply an acceptance or a counter-offer? (b) When did his second reply take effect, and was it in time? (c) Can Maya's later email revoke the offer?
- +3Rule. Acceptance must be final and unqualified and correspond with the offer; a new term is a counter-offer that kills the offer, but a mere inquiry does not (Stevenson, Jaques & Co v McLean). Acceptance is generally effective on receipt; electronic messages take effect when capable of being retrieved at the addressee's designated address (Latec Finance v Knight; Electronic Transactions (Victoria) Act 2000 (Vic) s 13A) - the postal 'on posting' rule (Adams v Lindsell) does not apply to email. A revocation is effective only when communicated (Goldsbrough Mort v Quinn).
- +4Application. (a) 'I'll take it if you re-line the boiler first' adds a new term, so it is arguably a counter-offer that destroys Maya's offer; counter-argument - if read as a mere inquiry the offer survives (Stevenson v McLean). (b) After Maya says 'sold as-is', Theo's 6:02pm email 'Agreed - $14,500, as-is' is an unqualified acceptance; under s 13A / Latec Finance it is effective on receipt at 6:03pm (capable of retrieval), even though Maya reads it next morning. (c) Maya's 6:10pm revocation is communicated after acceptance was already effective, so it is too late (Goldsbrough Mort v Quinn).
- +2Conclusion. State a clear tentative view and note the further facts you would want (e.g. whether the inbox was Maya's designated address).
Key terms
- Acceptance
- A final and unqualified assent to the terms of an offer, made in response to (and in reliance on) the offer and communicated to the offeror; it completes the agreement.
- Mirror-image rule (correspondence)
- The acceptance must correspond exactly with the offer. A reply that adds or varies a term does not accept - it is a counter-offer.
- Counter-offer vs inquiry
- A counter-offer proposes different terms and kills the original offer, so it can no longer be accepted (Stevenson, Jaques & Co v McLean). A mere request for information (an inquiry) leaves the offer alive.
- General communication rule
- Acceptance is effective only when received by the offeror; instantaneous communications are received when they reach the offeror (Latec Finance v Knight).
- Postal-acceptance rule
- A narrow exception: where post is contemplated, acceptance is complete when the letter is posted, even if delayed or lost (Adams v Lindsell). It is excludable by the offer's terms and does not apply to instantaneous or electronic communications.
- Electronic communication timing
- Under the Electronic Transactions (Victoria) Act 2000 (Vic) ss 13, 13A, 13B, an electronic acceptance is received when it is capable of being retrieved at the addressee's designated electronic address - a receipt-style rule, not the postal rule.
- Acceptance by silence vs conduct
- An offeror cannot stipulate that silence will amount to acceptance and bind a passive offeree (Felthouse v Bindley); but acceptance may be inferred from conduct where the offeree takes the benefit of the performance while doing nothing to reject the terms (Empirnall Holdings v Machon Paull Partners).
- Battle of the forms / last shot
- Where parties trade conflicting standard terms, the last set of terms sent and not objected to before performance usually prevails (Butler Machine Tool v Ex-Cell-O). Where no neat offer and acceptance can be found, a contract may still be inferred from conduct as a whole (Brambles v Bathurst).
Acceptance FAQ
Does the postal-acceptance rule apply to email in LAW5002?
No. The postal rule (acceptance complete on posting - Adams v Lindsell) is a narrow exception confined to genuine postal acceptance and is excludable by the offer. Email and other electronic messages follow a receipt-style rule: under the Electronic Transactions (Victoria) Act 2000 (Vic) s 13A an acceptance is received when it is capable of being retrieved at the addressee's designated address, consistent with the general receipt rule in Latec Finance v Knight. Applying 'on posting' to an email is a common and costly mistake.
What is the difference between a counter-offer and a mere inquiry?
A counter-offer proposes new or varied terms and kills the original offer, so the offer can no longer be accepted (Stevenson, Jaques & Co v McLean). A mere inquiry - for example simply asking whether earlier delivery is possible - only seeks information and leaves the offer alive. Because a reply is often arguable either way, name the rule and argue both characterisations before concluding.
Can AI help me with acceptance in LAW5002?
Yes, as a study aid - not as an exam shortcut. Sia can explain the acceptance rules step by step (correspondence, the receipt rule, the postal exception and the electronic-communications provisions), walk you through worked IRAC problems, and quiz you on which case or section supplies each rule so you can name your authority in the exam. It cannot and must not write your assessment for you or guarantee a mark: the final exam is a supervised electronic eExam in which generative AI is not permitted, so use Sia to build understanding beforehand and always confirm scope and format on Moodle.
Studying with AI? Sia — free AI law tutor works through LAW5002 step by step.
Exam move
Learn acceptance as a short, fixed ladder and run it on every reply in a problem: first ask whether the reply corresponds with the offer or is a counter-offer or a mere inquiry; then check it was made in response to the offer; then classify the mode of communication to fix exactly when it took effect - receipt for instantaneous and electronic messages, posting only for genuine postal acceptance, and retrieval at the designated address for email under the Electronic Transactions (Victoria) Act 2000 (Vic). Drill the timing by drawing a single vertical timeline and placing offer, acceptance, revocation, rejection and lapse in order, because the moment of acceptance usually decides the case. Keep one card per rule pairing the case or section with a one-line holding - Stevenson v McLean, Latec Finance, Adams v Lindsell, s 13A, Felthouse, Empirnall, Butler Machine Tool, Brambles v Bathurst - and practise arguing each contestable step both ways in full IRAC. The most recent past paper allowed 2.5 hours for 60 marks (about 2 minutes per mark), so rehearse timed answers before the trimester exam period and confirm the current format on Moodle.
