Key Takeaways

  • Acceptance by conduct occurs when actions—not words or a signature—indicate agreement to a contract's terms.
  • This form of acceptance is legally valid if it aligns with the offer's conditions and both parties are aware of the agreement.
  • Conduct can include payment, performance of services, or behavior consistent with contract terms.
  • Silence does not usually constitute acceptance, except under specific legal or relational contexts.
  • Courts examine objective behavior, communication, and context when determining whether acceptance by conduct has occurred.
  • Acceptance must be communicated clearly and effectively, though in some cases, performance alone may suffice.
  • If you're unsure whether a contract has been accepted by conduct, a qualified attorney can help clarify your legal standing.

Acceptance by conduct contract law means that a party can be found by the court to be in agreement with a contract based on his or her actions, even if the contract has not been signed.

What Is a Contract?

When at least two parties voluntarily enter an agreement with one another, this constitutes a contract. This document is legally binding when:

  • One party makes an offer accepted by other parties (agreement).
  • At least one of the parties has been given consideration (something of value) from one of the other parties.
  • All parties intend it to be legally binding.
  • All parties have legal ability to consent to the contract.
  • The terms and conditions are followed.

A contract may be legally void if its terms are ambiguous and thus cannot be enforced, refer to future agreements that have not yet occurred, or are incomplete.

What Is an Offer?

In contract law, an offer is a promise to provide something specific if the other party agrees to do something specific in return. This is different from an invitation to deal, in which one party requests an offer from another party.

Statements of possible contract terms and requests for information are also not considered offers. Providing information in response to a request is not the same as entering a contract.

Offers that are not accepted by a stated deadline, revoked, for which requirements are not met, rejected, or responded to with a counter-offer are considered expired. In the case of a counter-offer, the offer must be accepted for a contract to exist.

What Is Acceptance?

Either words or conduct constitutes acceptance of an offer if it occurs in accordance with and in response to the specific terms of the offer. If the parties begin doing business together that reflects the terms and conditions established, a contract exists even if the offer was not accepted in writing. This is the case only if both parties are aware of the offer, however.

Types of acceptance include:

  • Conditional acceptance, also called qualified acceptance, is when an individual who received an offer agrees on the condition that a specific event occurs or changes in the terms are made. Conditional acceptance is considered a counter-offer and must be accepted by the party that made the first offer before a contract exists.
  • Express acceptance is when clear, explicit agreement is made in response to an offer.
  • Implied acceptance occurs when the parties act in a way that indicates their agreement with the contract terms. It also occurs when a product or service is purchased; payment for the item in question is considered implied acceptance.

Conduct That May Constitute Acceptance

Courts typically look at objective behavior to determine acceptance. Common forms of conduct that may demonstrate acceptance include:

  • Starting work or providing services under the terms offered.
  • Delivering or accepting goods according to an agreement.
  • Making or receiving payments that correspond with contractual obligations.
  • Failing to reject goods or services after a reasonable opportunity.

Importantly, silence alone does not usually amount to acceptance—unless prior dealings or a contractual clause indicate otherwise.

Legal Effect of Acceptance by Conduct

Acceptance by conduct is a legally binding form of agreement. Even without a signature or verbal consent, courts may recognize a contract if one party performs according to the offer’s terms and the other party knowingly benefits from that performance.

The enforceability hinges on several core elements:

  • Clear conduct that reflects the terms of the offer.
  • Knowledge of the offer by the party performing the conduct.
  • Mutual intent to enter a legal relationship.

For example, if a vendor delivers goods per an unsigned contract and the recipient uses the goods without objection, this may constitute acceptance by conduct. The key is that the conduct aligns with the offer and is not merely coincidental.

Case Example

In the 2015 case of Reveille Independent LLC vs. Anotech International, the television company sued the UK cookware company for breach of contract. Reveille claimed that it had licensed intellectual property (IP) rights to Anotech and agreed to promote their products on their TV show Master Chef, in exchange for an agreed-upon sum.

The case hinged upon a signed deal memo that was marked with "brand conflict with Gordon Ramsay to be concluded and other minor amendments." This document was not signed by both parties and stated within that it would thus not be legally binding.

Negotiations between the party broke down, so this memo was never replaced with an officially signed agreement. Reveille then notified the defendant that the memo constituted a contract and sued for breach of contract for failure to pay.

In response, the defendant claimed that because the deal memo was not signed, no legally binding contract was in effect. They noted that the contract was subject to a condition precedent as indicated on the original deal memo.

The court determined that the memo constituted a binding contract for the reason of contract acceptance by conduct. In effect, the condition precedent was waived by the defendant's actions. The court further noted that the defendant had completed the services in concert with the written contract terms. The defendant also paid submitted invoices from the plaintiff, which was another factor establishing acceptance by conduct. The court found that the condition precedent was not valid because both parties knew it could not be met.

Key Judicial Precedents Involving Acceptance by Conduct

Several cases have helped shape the doctrine of acceptance by conduct:

  • Brogden v. Metropolitan Railway Co. (1877): Even without formal execution of a contract, the court found a binding agreement due to the parties' ongoing business under the proposed terms.
  • Reveille Independent LLC v. Anotech International (UK) Ltd (2015): As previously discussed, the court ruled that performance consistent with a draft agreement indicated acceptance by conduct—even without formal signatures.
  • Empirnall Holdings Pty Ltd v. Machon Paull Partners Pty Ltd (1988): The court upheld a contract based on conduct where one party carried out services while the other benefited from them.

These cases demonstrate how courts emphasize intent and mutual benefit over rigid formalities.

Communication of Acceptance by Conduct

While conduct can serve as acceptance, communication may still play a role. The conduct must occur in a context where the other party understands it as acceptance. If performance begins without notifying the offeror, a dispute could arise over whether a contract was actually formed.

For example:

  • In business dealings, sending a confirmation email after performing the first step of a contract may help establish the agreement.
  • A party must not act in a way that misleads the offeror into thinking the offer was rejected.

The law prioritizes mutual understanding, not just isolated actions.

Silence and Inaction in Acceptance by Conduct

In general, silence or inaction does not constitute acceptance. However, there are limited circumstances where it might:

  • Past dealings: If two parties have a history of accepting terms without verbal or written confirmation, silence may be interpreted as assent.
  • Custom or usage in trade: In some industries, certain behaviors are accepted as signifying agreements.
  • Unilateral contracts: If an offer is made for a reward or performance, the offeree may accept by completing the act, with no further communication required.

Still, courts are cautious about finding acceptance in silence, especially when consumer protection or fairness is at stake.

Frequently Asked Questions

1. Can a contract be formed without a signature? Yes. A contract can be formed through conduct that clearly indicates acceptance of the terms, even without a written signature.

2. Is acceptance by conduct enforceable in court? Absolutely. If the conduct clearly aligns with the terms of an offer and demonstrates intent to be bound, it is legally enforceable.

3. Does silence count as acceptance? Generally, no. Silence is not acceptance unless there’s a pre-existing relationship or trade custom suggesting otherwise.

4. How do courts evaluate acceptance by conduct? Courts assess the intent of the parties, the clarity of the offer, the alignment of conduct with the offer, and any surrounding circumstances.

5. What if I didn’t mean to accept the contract? If your conduct reasonably signaled acceptance to the other party, the contract may still be binding. An attorney can help determine your legal position.

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