Felthouse v. Bindley
Acceptance must be communicated to the offeror; the offeror cannot impose silence as acceptance, so no contract arises from the offeree's mere inaction.
Facts
Felthouse offered by letter to buy his nephew John's horse, writing 'If I hear no more about him, I consider the horse mine at £30 15s.' John did not reply but intended to sell the horse to his uncle and told the auctioneer Bindley to withdraw it from a sale. The auctioneer mistakenly sold the horse; Felthouse sued the auctioneer in conversion, claiming the horse was already his.
Issues
- Can an offeror stipulate that silence will amount to acceptance?
- Was a binding contract of sale of the horse formed before the auction?
Arguments
Felthouse argued that the nephew's silence and his instruction to withdraw the horse showed acceptance, vesting ownership in him. Bindley argued that the nephew never communicated acceptance to Felthouse, so no contract was concluded and the horse remained the nephew's property when sold.
Held
The court held there was no completed contract because acceptance had not been communicated to the offeror. An offeror cannot unilaterally treat the offeree's silence as acceptance; the nephew's uncommunicated intention to sell, however clear in his own mind, could not bind him to Felthouse. Since title had not passed, Felthouse could not maintain conversion against the auctioneer.
Ratio decidendi
An acceptance is ineffective unless and until it is communicated to the offeror, and the offeror cannot dictate that the offeree's silence shall constitute acceptance.
Significance
The classic authority that silence cannot be imposed as acceptance and that acceptance must be communicated; foundational under S2(b), S3 and S7 ICA and uniformly followed in India.
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