Felthouse vs Bindley case study, Summaries of Contract Law

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FELTHOUSE V

BINDLEY

Can a person’s silence be considered acceptance?

CASE ANALYSIS

FACTS Paul Felthouse was a builder who lived in London. He wanted to buy a horse from his nephew called John Felthouse. Uncle offered to buy a horse from nephew by stating in his written statement that “if I hear no more about him, I consider the horse mine at £30 15s.” The nephew, John did not reply to him and was busy at his farm in Tamworth however he asked his auctioneer, William Bindley to reserve the horse i.e. not to sell the horse. But by mistake, the horse was sold by auctioneer and fetched more money than the uncle offered. Auctioneer soon realized his mistake and hence wrote to the uncle apologizing for the error committed. He also stated in his writing that “Instructions were given me to reserve the horse ...”. Later nephew also wrote to his uncle stating that he was annoyed by the negligence shown by the auctioneer as he already told him that the horse was sold. He further also stated that he will try to recover the horse from the buyer. Auctioneer was sued for the tort of conversion i.e. to use someone else’s property inconsistently with their rights. But to show that the horse belonged to Mr. Paul Felthouse he had to prove that it was a valid contract. Whereas Bindley argued that the nephew never communicated his acceptance to the offer of buying the horse made by the uncle.

ISSUES

This case calls into question whether or not a valid contract existed between Plaintiff, Paul Felthouse and defendant William Bindley. Additionally this case raises the question of whether silence or a failure to reject an offer amount to acceptance. OBJECTIVE

CONTENTION BY THE DEFENDANT

Mr. William Bindley contended that there was no valid contract for the horse between the nephew and uncle since the acceptance of the offer was not communicated to the plaintiff. Subsequently, the property at the time of the auction was of the nephew and hence he (Mr. Bindley) is not liable for the tort of conversion.

The court observed that nothing had been done at the time of the auction to imply that the property had changed hands to the uncle, and the nephew had given no acceptance. Therefore, with no acceptance or implied acceptance through actions, the property remained that of the nephew at the time of the auction, and the uncle has no case against the auctioneer for selling goods that were not owned by the nephew. If the nephew wanted to enter into the contract he must have given clear indication of his acceptance, which he had failed to do. ANALYSIS

The decision was supported by 3 grounds:

1. Silence is ambiguous and difficult to infer the intention to accept.
2. Acceptance must be communicated so that we may know when a contract binds both parties.
3. Prevents an offeror from exploiting an offeree’s inertia by making him contractually liable unless he takes the trouble to reject the offer expressly. The decision in has been criticized because the nephew was not an unwilling offeree, needing to be protected by the rule that mere silence is not consent. Furthermore, he had indicated that he accepted the plaintiff's offer by telling the defendant not to sell the horse. However, the case has not been overruled.

It was held that there was no contract for the horse between the complainant and his nephew. There had not been an acceptance of the offer; silence did not amount to acceptance and an obligation cannot be imposed by another. Any acceptance of an offer must be communicated clearly. CONCLUSION