Can tender conditions become binding where they are neither expressly accepted nor rejected before work proceeds?
Silence alone does not accept an offer. Conduct may do so where, viewed objectively, the recipient proceeds on the basis of the tender and its conditions.
An instruction to commence work may accept the tender and its conditions by conduct, although silence alone is insufficient
The court examines the parties' words and conduct as a whole. If a tender is capable of acceptance and the recipient instructs the tenderer to perform without proposing different terms, that instruction and the ensuing performance may establish a contract on the tendered terms. The result is not automatic where negotiations remain incomplete, essential terms are unsettled or the parties objectively proceed on another basis.
| Issue | Position |
|---|---|
| Silence only | Does not ordinarily amount to acceptance |
| Instruction to commence | May objectively accept the tender |
| Performance and payment | May confirm a contract by conduct |
| Continuing negotiations | May show that essential agreement is absent |
| Tender conditions | Apply only if incorporated into the objectively concluded bargain |
Silence and acceptance
An offeror cannot ordinarily impose a contract by stating that silence will count as consent. The offeree must communicate acceptance or engage in conduct which, assessed objectively, demonstrates assent. The distinction protects a recipient from being forced to reject every unsolicited or unwanted offer.
Felthouse: silence did not transfer the horse
An uncle offered to buy his nephew's horse and stated that he would treat silence as acceptance. The nephew did not reply. The court held that no contract arose. The offeror could not prescribe silence as the method of acceptance.
Brogden: a contract arose through performance
A draft coal-supply agreement was returned marked approved but with amendments. The railway company did not expressly accept those amendments, yet accepted deliveries under the arrangement for an extended period. The parties' performance established a contract on the amended basis.
Construction tender followed by commencement
Where a main contractor receives an unambiguous subcontract quotation with stated conditions, gives no express response and then instructs the subcontractor to commence the priced work, that instruction may objectively accept the quotation. The analysis must still address any later purchase order, reservation, counter-offer or outstanding essential term.
The tenderer should seek express written acceptance identifying the scope, price, conditions, programme and order of precedence before mobilising.
Jean Shaw: silence considered with the surrounding conduct
Formal contract documents were circulated during an existing building relationship, with a request that objections be raised by a stated date. The contractor did not respond and continued working. On the facts, the court treated the documents as expanding the parties' existing agreement and inferred acceptance from the surrounding negotiations and continued performance, not from silence alone.
Supreme Court objective test
The Supreme Court confirmed that contract formation and contractual terms depend on what the parties communicated by words and conduct, assessed objectively. Their subjective thoughts are not decisive. The case also shows that substantial performance can establish a contract even though an anticipated formal agreement was never signed.
Formation checklist
| Question | Evidence required |
|---|---|
| Definite offer | Is the tender sufficiently clear as to scope, price and essential terms? |
| Incorporation | Were the conditions supplied or clearly identified before acceptance? |
| Response | Was there an acceptance, rejection, reservation or counter-offer? |
| Commencement | Who instructed work, and what offer was outstanding then? |
| Performance | Did both parties perform consistently with the alleged terms? |
| Later documents | Did any purchase order or signed agreement replace the tender basis? |
Practical controls
Require written acceptance before work begins.
Attach or identify the complete conditions relied upon.
Reject conflicting purchase-order conditions promptly.
Record the instruction to commence and the contractual basis stated with it.
Do not treat payment alone as proof that every tender condition was incorporated.
Preserve the full negotiation and performance record.
Authorities
| Authority | Citation | What it decides |
|---|---|---|
| Felthouse v Bindley | (1862) 11 CB (NS) 869 | Silence alone did not constitute acceptance. |
| Brogden v Metropolitan Railway Co | [1877] 2 App Cas 666 | A contract arose through performance of the amended arrangement. |
| Jean Shaw v James Scott Builders & Co | [2010] CSOH 68 | Surrounding negotiations and continued work supported acceptance by conduct. |
| RTS Flexible Systems Ltd v Molkerei Alois Müller GmbH & Co KG | [2010] UKSC 14 | Words and conduct are assessed objectively to determine formation and terms. |