LAWS2111 L2 (v 2.0), 2011


  • An invitation to submit a tender is NOT an offer – cannot establish a contract
  • The actual tender submitted in response to the invitation IS an offer – accepting it DOES establish the contract.
  • The specifications and details provided in the request to tender CAN effectively create a contractual guarantee setting out the terms under which the tender will be processed (Blackpool & Fylde Aero Club v Blackpool BC)

Blackpool & Fylde Aero Club v Blackpool Borough Council [1990] EWCA Civ 13

  • Council requested tenders be submitted by a midday on a particular date, specified how the envelopes were to be set out, established a blind tender process where all tenders would be opened simultaneously to prevent information leakage.
  • Post not checked on that particular day – Fylde Aero Club’s tender was in on time, but didn’t make it to the BBC in time for the tendering process.
  • Council accepted tender from another company instead – contract formed
  • Aero Club sued, claiming they had an implied collateral contract that all bids submitted on time would be considered
  • Held they WERE entitled to have their bid opened and considered as they had submitted it on time, but were not guaranteed that it would be accepted
  • Relevant Factors to the decision:
    • Number of parties invited to tender was small (6)
    • Club had held concession for 8 years, had interest and relationship with council
    • Council had laid out specific standing process rules for the tender process
    • Specified the deadline, that late tenders not be accepted – led to a commercial assumption that the process would be abided by.

Ticket Cases

  • Purchasing the ticket does NOT conclude the contract
  • As a General Rule, being issued the ticket is an OFFER, and KEEPING it after a reasonable amount of time to consider whether or not to return it amounts to ACCEPTANCE (MacRobertson Miller v Commissioner of Taxation)
  • Automatic ticket machines as used at carparks that don’t give you time to consider the conditions of the ticket are probably an exception to this rule – contract there is probably concluded when the ticket is taken from the machine, and any terms on the ticket itself aren’t part of that contract (Thornton v Shoe Lane)


  • Uses an objective test – would the reasonable person think that the offer had been accepted, based on the words or conduct of the offeree?
  • Signature generally indicates acceptance, regardless of whether or not the offeree actually read the terms (First Fitness v Chong)
  • Words affecting acceptance (be they by letter, email, telephone, or spoken) also constitute acceptance

Rejection and Clarification

  • Rejecting an offer or making a counter-offer destroys the original offer (Hyde v Wrench)
  • An inquiry for information (eg. is there a line of credit available for this purchase?) is NOT a counter offer (Stevenson v Maclean)
  • An unclear attempt to communicate acceptance may not constitute acceptance, but still leaves the original offer open (Rest Sea v APT)


  • Contract is formed on exchange of consideration – both parties consideration can exist purely of future promises (I will provide this server, you will pay for it) and still be valid.

Acceptance by Conduct

  • Conduct CAN indicate acceptance – but identifying the exact point at which it does can be very difficult
  • Important for things like construction projects – building work generally starts well before the actual contracts are signed
  • Cannot accept in ignorance of the offer (eg. A offers $50, B offers to sell for $50, before either offer arrives) but if 2 offers overlap, and parties appear to accept them, it amounts to acceptance by conduct
  • Reward cases require at least the acknowledgement of the reward at the time of action as a motivation. Cannot return a lost item, then notice the reward poster, and try to retroactively claim the reward.
  • Reward must be a MOTIVE for the action – cannot be done entirely for unrelated reasons (R v Clarke) but it can be merely one of many motivations (eg. Carlill still wanted to avoid influenza)

Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd (1988) 14 NSWLR 523

  • Initially an oral contract, with the intention to finalise written terms later
  • Machon Paull eventually sent around standard form Master Builders contract, partially filled in – but Empirnall CEO adamant that he ‘never signs contracts’
  • Later Machon Paull letters referred to those conditions
  • Empirnall went bankrupt, Machon Paull needed to establish the contract existed in order take precedence over other debts (using the property they had worked on as security)
  • Held their terms/contract HAD been accepted by conduct – taking the benefit of the offer with full knowledge of the terms was sufficient
  • Refusing to sign the contract did not prevent a contract from being established, it merely prevented it from being established via that METHOD

Acceptance of Tenders

  • A one-off tender accepted as per a normal contract
  • A standing offer (eg. all the coal you need for the next year at a specific rate) is accepted for specific quantities at each time the order is placed. Each order is a separate contractual acceptance of the ongoing offer (Great Northern Railway)

Fixed Bidding Process

  • Promises to accept the highest bid does NOT apply to referential bids ($1 more than the highest) for confident bids – but could potentially do so if the terms/process was set up specifically to support them (Harvela v Royal Trust Co. of Canada)

Silence as Acceptance

  • General Principle: A contract CANNOT indicate silence as a means of acceptance (Felthouse v Bindley)
  • Need to be able to objectively find a positive form of acceptance (Latec v Knight)
  • Not notifying the offeror of the acceptance prevents a contract from being established (Latec v Knight)

Waiver of Acceptance Notification Requirement

  • A contract can waive the requirement that acceptance be notified either explicitly or by necessary implication (Latec, Carlill) but it needs to be clear.

Learning Guide Cases

Fitness First v Chong
Relevant To: Acceptance
Issue: Was merely signing a contract, despite not having read any of the conditions, sufficient to constitute unconditional acceptance?
Held: Yes, a signature on a contract, without some kind of fraud or misrepresentation, is sufficient to objectively constitute unconditional acceptance.

Hyde v Wrench E
Relevant To: Offer, Acceptance
Issue: Does a counter offer destroy the original offer, or can it still be accepted if the counter offer is rejected?
Held: The original offer is destroyed the moment the counter offer is sent.

Stevenson v McLean E
Relevant To: Acceptance
Issue: Does a request for information (asking if credit was available) destroy an offer if the answer could result in different terms?
Held: No, merely asking if credit was available was not sufficient to destroy the offer – only specifying that it would be purchased on credit/over 2 months would have done that.

*Empirnall Holdings v Machon Paull
Relevant To: Acceptance
Issue: Can a contract be accepted by conduct, even though one party ‘refuses to sign contracts’?
Held: Yes – his refusal was to a form of acceptance, not to the contract itself. Further, the facts were such that it was made objectively clear the work would take place only on the conditions contained within the contract.

Felthouse v Bindley E
Relevant To: Acceptance
Issue: Is silence a valid method of acceptance (If I don’t hear from you, I’ll assume you accepted the offer)?
Held: No, it is not – acceptance must be a positive action (even if by conduct) before a contract is formed.

Competition and Consumer Act (CCA) 2010, “Australian Consumer Law” ss. 39-43
States that: It is an offence to supply and attempt to charge for unsolicited goods. These goods must be collected by the sender within a month of notification, or 3 months if no notification is made, else they become the property of the recipient free of charge.

R v Clarke
Relevant To: Acceptance
Issue: Is some degree of intention required to accept an offer, or merely the fulfilment of the terms? (Evidence in a murder investigation offered for exoneration, not reward)
Held: Yes, the acts cannot have been made for a reason that does not correspond in any way to accepting the offer.

Harvela Investments v Royal Trust Co E
Relevant To: Acceptance
Issue: Is a referential bid a valid offer (2.1 million or 101k more than anyone else)?
Held: Not unless the process specifically allows for referential bids – this process only allowed for a single bid from each, so referential bid invalid.

Great Northern Railway v Witham E
Relevant To: Offer, Acceptance
Issue: Was accepting a tender enough to force the tendering party to supply iron at that price in future contracts?
Held: Yes – it acted as a standing offer that could be accepted at any time. But the standard rules of withdrawing apply, allowing them to withdraw the offer and refuse future requests after that point.

*Latec Finance Ltd. v Knight
Relevant To: Acceptance
Issue: Was some form of notification of acceptance required by the deadline for a contract for consumer credit?
Held: Yes, it was. Failure to expressly notify, or at least clearly accept by conduct meant that no contract had been formed.

Brinkibon v Stahag Stahl E
Relevant To: Acceptance
Issue: What time/location was an international contract formed over telex completed?
Held: Must factor in the intention of the parties, sound business practices, and where the risk ought to lie. No universal rule can cover all cases.

Adams v Lindsell E
Relevant To: Acceptance, Postal Rule
Issue: Is posted acceptance valid at time of posting or receipt?
Held: A special ‘postal rule’ applies for posted acceptance, making it valid at the time of receipt. Note: Not good law in Australia now (see Tallerman)

Household Accident Insurance Co. v Grant E
Relevant To: Acceptance, Postal Rule
Issue: Does the postal rule apply even if the recipient NEVER gets the letter?
Held: Yes, it does – the rule applies regardless, unless the parties specifically opt out of it. Note: Not good law in Australia now (see Tallerman)

Tallerman & Co. v Nathan’s Merchandise
Relevant To: Acceptance, Postal Rule
Issue: Did the postal rule apply to a contract for the sale of bullets entered into via post?
Held: No, it did not – the postal rule was an anachronism, and should only apply if the offeror intended for it to apply.

Nunin Holdings v Tullamarine Estates
Relevant To: Acceptance, Postal Rule
Issue: Does the postal rule apply if the contract expressly specifies ‘receipt’ of a signed copy as a condition of acceptance?
Held: No, it does not. It can be negated by the express intention of the parties.

UN Convention on Contracts for the International Sale of Goods (the Vienna Convention) enacted in the Sale of Goods (Vienna Convention) Act 1986 (Qld)
States That: Postal rule is not applied in international sales. International sellers can contract out of these.

Electronic Transactions Act 2001 (Qld) ss 23-24
States that: If an information system (email address) is specified, the message is received as soon as it reaches that system – otherwise only when it’s actually read. But probably less relevant than Brinkibon for contract formation.