The court held that even though the offer had not

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contract or one which was formally governed by the terms of the unsigned document. The court held that even though the offer had not been formally accepted by signature and return of the formal document the fact that the parties had conducted themselves as if it had been was sufficient to establish a binding contract between them — on the terms of the written document. As one of the judges (McHugh JA) said at 535: The ultimate issue is whether a reasonable bystander would regard the conduct of the offeree ... as signalling to the offeror that his offer has been accepted. Waiving communication It should be clear from the above that the rule that acceptance must be communicated is mainly for the offeror’s benefit. Unless and until acceptance is notified there is no contract and no obligation and the offeror is not bound to perform. In appropriate cases he or she can even revoke the offer if circumstances change or if he or she has a change of heart. Because communication is mainly for his or her benefit the offeror can waive his or her right to have acceptance communicated. Most commonly, such waiver occurs where the offeror is not interested so much in formal acceptance as in obtaining a particular performance. In Carlill’s case, for instance, Mrs Carlill did not expressly notify the company that she was starting a course of treatment using their smokeball (thereby formally accepting their offer of a potential reward); she merely did what the company had asked her to do — she bought and used their smokeball. In the circumstances, the court held that the company had waived its right to insist on a formal communication of acceptance — so Mrs Carlill’s performance was a good acceptance of the offer. The postal rule Another exception to the rule that acceptance must be communicated can be found in the postal rule . In short, the postal rule states that where the parties expect that the offer might be accepted by mail , any mailed acceptance will be complete as soon as the letter is properly posted. The reason for this is that posting a letter, as an irrevocable act, is a clear indication of the acceptor’s intention to accept . The rule was established in Adams v Lindsell (1818) 106 ER 250. The defendants in that case had written to the plaintiffs offering to sell them a quantity of wool and requiring an answer ‘in the course of post’. The plaintiffs posted their acceptance immediately they received the offer but, before their acceptance arrived, the defendants sold the wool to another buyer. The plaintiffs sued. The court held that because both parties had expected that acceptance would be by post, the acceptance was complete and final when the letter was posted. As this had happened before the offer was revoked (by the subsequent sale) a contract had arisen and the defendants, who were in breach because of their failure to deliver the wool, were liable in damages.
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