Acceptance in contract law (UK): counter-offers, conduct, silence and the postal rule

What is the legal definition of acceptance, when is an acceptance actually a counter-offer, and is silence acceptance? In short: acceptance is judged by a reasonableness test, changing the terms is a counter-offer, and silence usually does not count. This page is part two of my series on what makes a contract legally binding. Part one covered the offer; this part covers what has to happen to that offer for a contract to exist.

What is acceptance? The reasonableness test

The law does not define the exact words that must be used for an acceptance to be legally binding. There is no formula. Instead we look at the reasonableness test: does a reasonable person believe that the person who received the offer has accepted it?

That means acceptance must be analysed on a case-by-case basis. The same words or actions might be an acceptance in one setting and not in another, depending on what a reasonable person would make of them in context. If you are trying to work out whether someone has accepted your offer, that is the question to ask: would a reasonable observer, looking at what they said and did, conclude that they had agreed?

Counter-offer vs acceptance

One thing is certain, though. If you believe you are accepting an offer but you are actually varying the terms of the offer that was made to you, you are not accepting. You are making a counter-offer.

This catches people out all the time. Someone receives a quote, replies "agreed, but can we make payment 60 days instead of 30", and assumes a contract is in place. It is not. By changing a term, they have rejected the original offer and put a new one on the table. The original offeror is now the one who has to accept or reject. In my experience this is one of the most common reasons parties end up disagreeing about whether they ever had a contract at all.

Acceptance by conduct and emojis

Offers can be accepted by conduct. If someone makes you an offer and you do not say anything, but you start acting as if you had accepted it, for example by starting to fulfil some of your obligations under the contract, then you may be recognised as having accepted the offer in a legal sense. You do not need to have said "yes" if your actions say it for you.

It follows that the form of acceptance is flexible. A thumbs-up emoji, or any emoji that could reasonably be read as an acceptance, does qualify and is recognised as acceptance of an offer. If a supplier sends you terms on a messaging app and you reply with a thumbs-up, do not assume that is non-committal.

Silence and the postal rule

Silence is typically not recognised as acceptance. If you make someone an offer and they say nothing and do nothing, you generally cannot treat their silence as agreement. There is an exception: if the two parties have a history of accepting offers by silence, a court may treat silence as acceptance in line with that past practice.

Another thing worth knowing about acceptance is the postal rule. If you accept an offer by sending a letter through the post, the moment you post that acceptance is the moment you accepted the offer. That is the case regardless of whether the letter actually reaches the offeror. So the contract can come into existence while the letter is still in the postbox, and even if it is lost in the post.

Does acceptance need to be in writing?

Acceptance, as we have seen, can be by conduct and even, in certain circumstances, by silence. It does not need to be in writing.

Contracts overall typically do not need to be in writing either. Verbal contracts between parties are formed all the time, and they are generally just as binding as written ones. The practical problem with a verbal contract is proving what was agreed, not whether it exists. There are specific exceptions where writing is required, and I cover those in the page on what makes a contract not enforceable.

Offer and acceptance are not enough

With an offer and an acceptance you might think you have a legally binding contract. You would be wrong. The law also needs real consideration to be offered as part of the deal, and after that intention to create legal relations and certainty of terms. The next part of the series covers consideration in contract law.

Next steps

When you want to lock in a deal, accept the offer clearly and on its exact terms. If you need to change anything, understand that you are making a counter-offer and that the other side has to accept it. Keep a record of how and when acceptance happened, whether that was an email, a message, an emoji or you starting work. If a dispute is brewing over whether a contract was ever formed, speak to a commercial solicitor early.