In English law, the formation of a contract fundamentally requires an offer and acceptance. Together, these elements demonstrate mutual agreement between parties, creating a legally enforceable contract.
An offer is a clear, definite proposal presented by one party (offeror), setting out terms upon which they agree to be bound. Acceptance occurs when the other party (offeree) unequivocally agrees to these exact terms, completing the contractual agreement.
Acceptance can be communicated verbally, in writing, or by clear conduct indicating consent to the offer’s terms. Silence generally does not constitute acceptance unless specifically agreed otherwise.
Offers can be terminated by revocation, rejection, counter-offer, lapse of time, or the death or incapacity of the offeror or offeree. Until acceptance, no binding obligations exist.
The principles of offer and acceptance provide commercial clarity and legal predictability, facilitating smooth transactions and contractual stability.
You may find our more detailed guide to offer and acceptance useful.
The defendants misdirected an offer to sell wool, delaying its receipt. The plaintiffs posted acceptance immediately on receiving it, but the defendants sold the wool elsewhere before it arrived. The court held the contract was formed when acceptance was posted, establishing the postal rule.
Brinkibon, a London company, sent acceptance of a contract by telex to Stahag in Vienna. The House of Lords held that for instantaneous communications like telex, a contract is formed where acceptance is received, thus the contract was formed in Austria, not England.
Brogden supplied coal to the Metropolitan Railway Company for years. When they attempted to formalise the arrangement, Brogden added terms to a draft contract and returned it marked 'approved', but no formal agreement was executed. Both parties acted on the terms. The House of Lords held a contract arose by conduct.
A 'battle of forms' dispute arose when sellers quoted a price with a price variation clause, but buyers placed an order on their own terms without such a clause. The sellers signed and returned the buyers' acknowledgement slip. The Court of Appeal held the contract was formed on the buyers' terms, establishing important principles for resolving conflicting standard form contracts.
Van Tienhoven posted an offer to sell tinplates from Cardiff to Byrne in New York. Byrne accepted by telegram upon receipt, but Van Tienhoven had already posted a revocation letter. The court held that revocation is only effective upon actual communication to the offeree, not upon posting.
The Carbolic Smoke Ball Co. advertised that anyone using their smoke ball correctly and contracting influenza would receive £100. Mrs Carlill followed instructions, contracted influenza, and successfully sued for her reward. The court held the company's advertisement was a legally binding unilateral offer accepted by Mrs Carlill's conduct.
Entores made an offer via Telex from London, which was accepted by Telex from Amsterdam. The Court of Appeal held that for instantaneous communications like Telex or telephone, a contract is complete when acceptance is received by the offeror, not when sent. The contract was therefore made in London where acceptance was received.
Paul Felthouse attempted to buy his nephew's horse, stating 'If I hear no more about him, I consider the horse mine.' The nephew did not reply but instructed an auctioneer to exclude the horse from sale. The auctioneer sold it anyway. The court held silence cannot constitute acceptance of an offer.
Mr Stimson signed a hire purchase offer for a car but returned it dissatisfied before the finance company accepted. The car was subsequently stolen and damaged. The Court of Appeal held no contract existed as the offer was revoked through the dealer (as agent) and was conditional on the car remaining in substantially the same condition until acceptance.
Mr Gibson sought to purchase his council house under a scheme later abandoned by Manchester City Council following a change in political control. The House of Lords held that the council's letter stating they 'may be prepared to sell' did not constitute a legally binding offer capable of acceptance, being merely an invitation to apply.
An auctioneer advertised office furniture for sale at auction. The plaintiff travelled to attend but the goods were withdrawn. The court held that an advertisement of an auction is merely a declaration of intent, not an offer, so the auctioneer was not liable for the plaintiff's wasted expenses.
Appellants sent a telegram asking if Facey would sell property and his lowest price. Facey replied with only the lowest price (£900). Appellants purported to accept. The Privy Council held no contract existed as stating a lowest price was not an offer to sell.
Mr Grant applied for shares in an insurance company. The company posted a letter of allotment which was lost in the post and never received. The Court of Appeal held that a valid contract existed because acceptance is effective upon posting, even if the letter never arrives. This case affirmed the postal rule.
Wrench offered to sell his farm to Hyde for £1000. Hyde counter-offered £950, which Wrench rejected. Hyde then purported to accept the original £1000 offer. The court held no contract existed as the counter-offer had destroyed the original offer, establishing the counter-offer rule in contract law.
Mr Partridge advertised wild birds for sale in a magazine. He was charged with offering for sale a bramblefinch contrary to the Protection of Birds Act 1954. The court held the advertisement was merely an invitation to treat, not an offer for sale, establishing that advertisements are generally invitations to treat.
Boots introduced a self-service system where customers selected items from shelves and paid at a cashier supervised by a pharmacist. The Pharmaceutical Society alleged this breached the requirement for poison sales to be supervised by a pharmacist. The Court held the sale occurred at the cashier, not when items were picked up.
Reveille produced MasterChef US and negotiated with Anotech to integrate cookware products into episodes and license the MasterChef brand. A Deal Memo stated it was not binding until signed by Reveille, but Reveille never signed. The Court held a binding contract was formed through Reveille's conduct in performing the agreement's terms.
Rose and Frank Company, American paper dealers, had arrangements with English paper manufacturers Crompton and Brittains. A 1913 memorandum contained an 'honourable pledge' clause stating it was not a legal agreement. The House of Lords held this clause effectively negated contractual intention, but individual orders placed and accepted remained enforceable contracts.
RTS agreed to supply automated equipment to Müller under a Letter of Intent while negotiating detailed contract terms. Work proceeded without a formal contract being signed. The Supreme Court held that by their conduct, particularly a variation agreement on 25 August 2005, the parties waived the 'subject to contract' requirement and were bound by the negotiated MF/1 terms.
A horse trainer bought oats matching a sample shown to him, but mistakenly believed they were old oats when they were new (green) oats. The court held that the seller was not obliged to correct the buyer's unilateral mistake. This case established the objective test for contract formation.
Tekdata and Amphenol disputed whose standard terms governed contracts for connectors used in Rolls-Royce aero engines. The Court of Appeal held that the traditional offer and acceptance analysis applies in 'battle of forms' cases, meaning the seller's terms on the acknowledgement prevailed unless conduct showed contrary common intention.
In a 'battle of the forms' dispute, TRW purchased goods from Panasonic. The Court of Appeal held that TRW's conduct in accepting delivery of the goods constituted acceptance of Panasonic's counter-offer, thereby incorporating Panasonic's standard terms, including a German jurisdiction clause.
Carlill v Carbolic Smoke Ball established the legal principle of unilateral contracts, confirming that advertisements may constitute binding offers accepted by performing specific acts.
September 3, 2026
National Case Law Archive
September 3, 2026
National Case Law Archive
September 3, 2026
National Case Law Archive