Stipulation of acceptance of a contract

what_username

Hi I was wondering if somebody could explain this issue to me as I couldn't find an answer anywhere online.

I understand that if an offeror stipulates a form of acceptance, the offeree has to abide by this in order to accept. But what if an agent of the offeror does not stipulate a method when informing the offeree of the offer, and the offeree only communicates with the agent and not with the offeror directly?
Does the initial stipulation still stand? or has it changed because the offeree could not have possibly been aware of its existence?

Mr. Incognito

Depends on the type of contract.

A disclosed Agent that has authority to bind the principal can bind the principal. If the principal has communicated a mechanism of acceptance to the offeree this will not apply for an agent.

If you think about it.

A(gent) can bind B

B will accept C's offer in a particular form

You are asking why does C's offer to A have to be in the format set by relations between B and C. It doesn't. They are entirely separate transactions.

The only caveat to this is Insurance contracts. A ridiculous House of Lords decision held that representations by an Insurer's properly authorised agent will not bind the principle. This was set out of concern for the precedent it might set in Insurance contracts. A joke of a decision imo.

234

what_username wrote: »

Hi I was wondering if somebody could explain this issue to me as I couldn't find an answer anywhere online.

I understand that if an offeror stipulates a form of acceptance, the offeree has to abide by this in order to accept. But what if an agent of the offeror does not stipulate a method when informing the offeree of the offer, and the offeree only communicates with the agent and not with the offeror directly?
Does the initial stipulation still stand? or has it changed because the offeree could not have possibly been aware of its existence?

Because you are dealing with an agent then this comes down to a question of ostensible authority i.e. to what extent did the principal place the agent in a position such that third parties would reasonably expect that he had authority to contract.

If, in the situation you set out, the principal had communicated the stipulation only to the agent, and not the offeree also, then there would be a contract. Unless there was some strong countervailing fact- such as the offeror notoriously never making an offer on anything but the stipulated terms - then there would be ostensible authority.

The principal's remedy is then against the agent for breach of contract and negligence, but it might be difficult to show an actual loss. But the offeree still has his contract with the principal.

234

Mr. Incognito wrote: »

Depends on the type of contract.

A disclosed Agent that has authority to bind the principal can bind the principal. If the principal has communicated a mechanism of acceptance to the offeree this will not apply for an agent.

If you think about it.

A(gent) can bind B

B will accept C's offer in a particular form

You are asking why does C's offer to A have to be in the format set by relations between B and C. It doesn't. They are entirely separate transactions.

The only caveat to this is Insurance contracts. A ridiculous House of Lords decision held that representations by an Insurer's properly authorised agent will not bind the principle. This was set out of concern for the precedent it might set in Insurance contracts. A joke of a decision imo.

It that the Ocean Frost? Because the issue was a bit different there.

what_username

234 wrote: »

Because you are dealing with an agent then this comes down to a question of ostensible authority i.e. to what extent did the principal place the agent in a position such that third parties would reasonably expect that he had authority to contract.

If, in the situation you set out, the principal had communicated the stipulation only to the agent, and not the offeree also, then there would be a contract. Unless there was some strong countervailing fact- such as the offeror notoriously never making an offer on anything but the stipulated terms - then there would be ostensible authority.

The principal's remedy is then against the agent for breach of contract and negligence, but it might be difficult to show an actual loss. But the offeree still has his contract with the principal.

Thanks for the reply.

So, if the offeror had communicated the stipulation to the offeree but it was not received, does this mean that the accepted stipulation was the one conveyed by the agent and not the offeror? as it was the only one received by the offeree. Or does the fact the offeror communicated the stipulation mean that the offeree had to abide by the set method, regardless of whether he knew of it at all?

If the offer was then retracted before the offeree accepted under the stipulated terms mean that the offeror is not liable for breach of contract? or is the agent not liable either? or can the offeree sue both or either for breach of contract?

Mr. Incognito

I have no idea of the case- it's been many years since I was an undergrad doing Insurance law but I remember at the time that they really got screwed. I believe it was around the 1960s and Lord Diplock gave the judgment

234

what_username wrote: »

Thanks for the reply.

So, if the offeror had communicated the stipulation to the offeree but it was not received, does this mean that the accepted stipulation was the one conveyed by the agent and not the offeror? as it was the only one received by the offeree. Or does the fact the offeror communicated the stipulation mean that the offeree had to abide by the set method, regardless of whether he knew of it at all?

If the offer was then retracted before the offeree accepted under the stipulated terms mean that the offeror is not liable for breach of contract? or is the agent not liable either? or can the offeree sue both or either for breach of contract?

As to the first large paragraph, providing that the issues of ostensible authority which I mentioned in my last post are satisfied, so that the agent is authorised to make the alternative offer, then the offeree can accept this as it is q separate offer to the one with stipulations attached.

As to the second paragraph, I'm not entirely clear on what you are talking about, but if an offer is withdrawn before it is accepted then there is simply no contract.

what_username

234 wrote: »

As to the first large paragraph, providing that the issues of ostensible authority which I mentioned in my last post are satisfied, so that the agent is authorised to make the alternative offer, then the offeree can accept this as it is q separate offer to the one with stipulations attached.

As to the second paragraph, I'm not entirely clear on what you are talking about, but if an offer is withdrawn before it is accepted then there is simply no contract.

So they are 2 different contracts, with the agent being the offeror of one and the original offeror of the other?

I understand that, but if the offeree were to claim that they accepted the offer before it was withdrawn, would they be likely to win if they sued the offeror for a breach? or would the agent be liable instead? as he communicated different stipulation on behalf of the offeror

234

what_username wrote: »

So they are 2 different contracts, with the agent being the offeror of one and the original offeror of the other?

I understand that, but if the offeree were to claim that they accepted the offer before it was withdrawn, would they be likely to win if they sued the offeror for a breach? or would the agent be liable instead? as he communicated different stipulation on behalf of the offeror

OK, I can't give you anything approaching a definitive answer to these questions as it will depend on the evidence and facts which go to offer and acceptance.

However, there would be very unlikely to be two contracts as there has only been one acceptance.

If you accept an offer before it is withdrawn then you obviously have a contract and you can sue on it. However, this would all be subject to evidence setting out when and how the offer was withdrawn and when and how acceptance was completed.

In any event, from the point of view of the offeree, the relationship is always between the offeree and the principal. The agent will never be in a relationship with the offeree unless it is entirely clear that he has decided to contract personally.

what_username

234 wrote: »

OK, I can't give you anything approaching a definitive answer to these questions as it will depend on the evidence and facts which go to offer and acceptance.

However, there would be very unlikely to be two contracts as there has only been one acceptance.

If you accept an offer before it is withdrawn then you obviously have a contract and you can sue on it. However, this would all be subject to evidence setting out when and how the offer was withdrawn and when and how acceptance was completed.

In any event, from the point of view of the offeree, the relationship is always between the offeree and the principal. The agent will never be in a relationship with the offeree unless it is entirely clear that he has decided to contract personally.

Fair enough, thanks for your help.

234

Mr. Incognito wrote: »

I have no idea of the case- it's been many years since I was an undergrad doing Insurance law but I remember at the time that they really got screwed. I believe it was around the 1960s and Lord Diplock gave the judgment

Hm I think you might be mixing up cases. Back in the 1960s he was still Diplock LJ and he was delivering judgment in Freeman Lockyear v Buckhurst Park Properties; which the seminal modern statement of ostensible authority.

There is no decision of the House of Lords to the rather blunt effect you set out earlier. There are decisions stating that an agent who falsely represents that he has spoken to his principal and obtained the enhanced authority necessary for the transaction, where it would be reasonable for the third party to assume that he could do this, that the principal was nevertheless not bound. It's usually summed up by saying that an agent cannot pull themselves up by his own bootstraps.