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November 16, 2010

Formation of contract – The acceptance

Writing about web page receipt, silence

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In my opinion, the role of acceptance, concerning the enforcement of contracts, is not to be underestimated, as rights and obligations generally arise at that time when the offer has been validly accepted.
Great importance should be attached to the time concerning the receipt of an acceptance, as well as the form, particularly the silence of the offeree relating to the offer.

In principle, an intention directed to another person, including acceptance, must be received by the person to whom it is addressed, whereupon the time, in which a statement of purpose takes effect, diverges.

According to the Cour de cassation, the dispatch of an acceptance concludes the contract, whereas in German law, under § 130 BGB, an acceptance becomes effective upon receipt, whereat a declaration of intention, coming into the sphere of the intended recipient’s control, would usually suffice.The English legal system requires a communication of acceptance before being valid, although an acceptance by letter becomes effective in the moment the letter is posted.This postal rule only applies when it is reasonable to use the post as a mean of communicating acceptance, though in combination with the receipt rule for the revocation of offers, a limitation of the offeror’s power to revoke is accomplishable.

Since acceptance must be communicated by any means, in all three legal systems, silence, from which explanatory value may be scarcely infer, cannot in principle amount to acceptance.
In my judgement, the very fact of being forced by an offer to take trouble and incur expense in order to avoid a binding effect, represents a decisive argument against any legal effect due to silence.Nevertheless, numerous exceptional cases, in which inactivity suffice to be bound by the alleged obligation, e.g. the commercial letters of confirmation in German law, based on customary right, complicate a consistent application of the basic principle.

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