Respondent : Paul Felthouse
Appellant : Bindley
Decided on : 8 July 1862.
Judges : Willes, Byles, and Keating JJ
Citation : 11 CB (NS) 869, 142 ER 1037, (1862)
The case Felthouse v. Bindley is one of the landmark judgements in the field of contract law. The case states that, “silence cannot amount to acceptance”. The case was however, reconsidered because the facts indicated that the acceptance was being communicated by the conduct.
Facts of the case :
The respondent Paul Felthouse lived in London and he was a builder. Felthouse wanted to buy a horse from John Felthouse who was his nephew. Uncle proposed to buy a horse from nephew by stating in a written statement that, “if I hear no more about him, I consider the horse mine at 30 pounds 15 s.” But John was not able to reply to him as he was busy at his farm which was in Tamworth though he asked William Bindley who was his auctioneer to not sell the horse. But the horse was sold by mistake by the auctioneer and raised more money than what the uncle offered. Auctioneer soon understood the mistake committed by him and thus, apologized to the uncle in writing for the mistake he committed. The auctioneer also stated in his writing that, “Instructions were given me to reserve the horse…”. Later the nephew also wrote to his uncle that he was too frustrated and angry by the negligence exhibited by the auctioneer as he told him earlier only not to sell the horse. He even stated that he will try to retrieve the horse from the buyer. The auctioneer was sued for “the tort of conversion that is to use someone else’s property inconsistently with their rights.” But to prove that the horse belonged to Mr. Paul Felthouse he had to prove that there was a valid contract. But Bindley argued that the acceptance was never communicated by the nephew regarding the offer which was made by his uncle for buying the horse.
Issue in the case :
The issue raised in the above case was whether a valid contract existed between the Plaintiff, Paul Felthouse, and the Defendant William Bindley. Also, this case raised the question whether silence or failure to reject an offer results in acceptance or not.
“Acceptance must be communicated and it cannot be imposed due to silence of one of the parties.”
Analysis and judgement of the case :
It was held that one cannot enforce any kind of obligation on any person to reject one’s offer by the court. Therefore, it is clear that the nephew in his own mind meant that his uncle could have the horse at a price which the uncle quoted 30 pounds 15 s, but he did not communicate his intent to his uncle or did not done anything to bind himself.
“The court therefore observed that nothing had be 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.” Thus, without any kind of acceptance or even implied acceptance through any kind of actions, the owner of the property will remain the nephew only at the time of the auction, and the uncle cannot file any case against the auctioneer for selling anything which was not owned by the nephew.
If the nephew intended to enter into any kind of contract, he must give a clear hint of his acceptance, in which he was unsuccessful. The general rule of acceptance is that “acceptance is not at effective until it is communicated to the offeror.”
It was argued that it is not consistent with the view of a contract as a freely understood obligation to allow one party to “force” any contract upon a party in which the party is not willing to contract at that time.
On the part of the defendant, it was presented that the letter of 27 February 1861, was not acceptable as an evidence. However, the objection was overruled by the judge. It was then submitted that the horse was not conferred in the plaintiff at the time of sale by the defendant. Dowdeswell, in Michaelmas Term last, accordingly got a rule nisi, on the basis that “sufficient possession of the horse, to maintain the action, was not vested in the plaintiff at the time of the wrong, that the letter of John Felthouse on 27 February 1861, was not admissible in evidence against the defendant, that, if it was admissible, being after the sale of the horse by the defendant, it did not confer title on the plaintiff, and that there was at that time of the wrong no sufficient memorandum in writing, or possession of the horse, or even the payment, to satisfy the statue of frauds.”
Willes J delivered the leading judgement, he stated that,
“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 pounds, the nephew said that he had sold it for 30 guineas, but there was clearly no complete bargain at that time.”
Justice Byles and Justice Keating both agreed with Justice Willes. Justice Keating further mentioned that,
“As between the uncle and the auctioneer, the only question we have to consider is whether the horse was the property of the plaintiff at the time of the sale on 25 February. It seems to me that nothing had been done at that time to pass the property out of the nephew and vest it in the plaintiff. A proposal had been made, but there had before that day been no acceptance binding the nephew.”
“The decision was supported on three grounds which are as follows:
- Silence is uncertain and it is difficult to infer from it the intention to accept.
- Acceptance needs to be communicated so that we may get to know that when a contact binds both the parties.
- Prevents an offeror from exploiting the offeree’s inertia by making him contractually liable unless he takes the trouble to reject the offer expressly.”
The decision has been criticized because the nephew was not an unwilling offeree, needing to be protected by the rule that mere silence is not consent. Moreover, he had indicated that he accepted the plaintiff’s offer by telling the defendant not to sell the hors. Though, the case has not been overruled.
It was held in the above case that there was no contract for the horse between the appellant and respondent. There was not any acceptance of the offer, silence does not result in acceptance and an obligation cannot be imposed by another. Any kind of acceptance to an offer needs to be communicated clearly.
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