The High Court has held that the wording of a signature block and other wording in draft supply contracts did not constitute a prescribed mode of acceptance

The High Court has held that the wording of a signature block and other wording in draft supply contracts did not constitute a prescribed mode of acceptance.

The signature block included the words “accepted [buyer]” and a requirement that the buyer return a signed copy. The buyer did not sign the contracts, but did convey numerous instructions to the seller, asking it to set the purchase price of the cotton to be supplied, in accordance with the contract, which the seller did. The buyer argued that there was a method for communicating acceptance specified by the contracts and consequently there was no valid acceptance of the seller’s offers and no contract was formed.

The judge held that having a prescribed mode of acceptance is for the benefit of the offeror and he is therefore entitled to waive those requirements. He also added that if the buyer’s price fixation instructions were ineffective as an acceptance of the contract terms, the seller was entitled to treat them as a counter-offer to contract on those terms, which it accepted by confirming the price fixations.

This is a useful reminder that contract terms can be accepted by conduct, even if the party has not signed the contract.