Law of Contract

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Felthouse v Bindley
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Felthouse v Bindley

CourtCourt of Common Pleas
Citation(s)(1862) 11 Cb (NS) 869; [1862] EWHC CP J35; 142 ER 1037 Transcript(s)Full text of judgment
Judge(s) sittingWilles J, Byles J and Keating J
Felthouse v Bindley (1862) EWHC CP J 35, is the leading English contract law case on the rule that one cannot impose an obligation on another to reject one's offer. This is sometimes misleadingly expressed as a rule that "silence cannot amount to acceptance". Later the case has been rethought, because it appeared that on the facts, acceptance was communicated by conduct (see, Brogden v Metropolitan Railway). Furthermore in Rust v Abbey Life Assurance Co Ltd[1] the Court of Appeal held that a failure by a proposed insured to reject a proffered insurance policy for seven months justified on its own an inference of acceptance.[2] Contents [hide]

1 Facts
2 Judgment
3 See also
4 Notes
5 References
[edit]Facts

Uncle Paul Felthouse was a builder who lived in London. He wanted to buy the horse Sizing Europe off his nephew, John Felthouse. After a letter from the nephew about a previous discussion in buying the horse, the uncle replied saying, "If I hear no more about him, I consider the horse mine at £30 and 15s." The nephew did not reply. He was busy at auctions on his farm in Tamworth. He told the man running the auctions, William Bindley, not to sell the horse. But by accident, Bindley did. Uncle Felthouse then sued Bindley in the tort of conversion - using someone else's property inconsistently with their rights. But for the Uncle to show the horse was his property, he had to show there was a valid contract. Bindley argued there was not, since the nephew had never communicated his acceptance of the uncle's offer. [edit]Judgment

The court ruled that Felthouse did not have ownership of the horse as there was no acceptance of the contract. Acceptance must be communicated clearly and cannot be imposed due to silence of one of the parties. The uncle had no right to impose a sale through silence whereby the contract would only fail by repudiation. Though the nephew expressed interest in completing the sale there was no communication of that intention. Willes J delivered the lead judgment.

I am of opinion that the rule to enter a nonsuit should be made absolute. The horse in question had belonged to the plaintiff's nephew, John Felthouse. In December, 1860, a conversation took place between the plaintiff and his nephew relative to the purchase of the horse by the former. The uncle seems to have thought that he had on that occasion bought the horse for £30., the nephew that he had sold it for 30 guineas: but there was clearly no complete bargain at that time. On the 1st of January, 1861, the nephew writes, "I saw my father on Saturday. He told me that you considered you had bought the horse for £30. If so, you are labouring under a mistake, for 30 guineas was the price I put upon him, and you never heard me say less. When you said you would have him, I considered you were aware of the price." To this the uncle replies on the following day,

"Your price, I admit, was 30 guineas. I offered £30.; never offered more: and you said the horse was mine. However, as there may be a mistake about him, I will split the difference. If I hear no more about him, I consider the horse mine at £30 and 15s." It is clear that there was no complete bargain on the 2nd of January: and it is also clear that the uncle had no right to impose upon the nephew a sale of his horse for £30 and 15s. unless he chose to comply with the condition of writing to repudiate the offer. The nephew might, no doubt, have bound his uncle to the bargain by writing to him: the uncle might also have retracted his offer at any time before acceptance. It stood an open offer: and so things remained until the 25th of February, when the nephew was about to sell his farming stock by auction. The horse in...
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