Acceptance by electronic means
And the third is that some emphasis is attached to the fact that in the case of a telex, it is more likely that the offeree will be able to tell that his attempt to communicate has failed than that the offeror will be able to tell that there has been an unsuccessful attempt to communicate with him.
Communication of acceptance
In contracts formed by email it is unclear whether acceptance takes place at the time the acceptance is sent by the offeree, or when it is received by the offeror. Indeed, the sending of such an email is a legal requirement in a wide range of internet transactions, by virtue of the Electronic Commerce EC Directive Regulations This rule is also consistent with the reasoning in the second case, The Pamela58, where the telex arrived outside business hours, at shortly before midnight on a Friday evening. UCITA aside, the question of when a contract is formed via email rests entirely in the hands of the common law, with the possibility that the antiquated postal acceptance rule may be applied to this communication method. The Common Law position is that both the Offeror and Offeree become irrevocably bound when the acceptance letter is posted in due course. For there to be a valid contract, the offer has to be proved and it must be satisfied that the offeree has accepted the offer. When one party sends a communication via post, there is a time delay between dispatch and receipt. Where acceptance is communicated by letter it is regarded as received at the place of posting rather than at the place of actual receipt. See also Henthorn v Fraser n 13 Lord Herschell. Therefore, it is necessary to understand the concept, especially in regard to electronic communications.
Therefore, if a case occurs that acceptance is attempted by telephone but the line is very poor and the acceptance is not heard, it will be concluded that acceptance was not effectively communicated. Some support for this option is provided by two cases concerning the moment at which a telexed notice of withdrawal of a ship by the owners is deemed to have been received by the charterers.
There is therefore a contract.
The same would be true where the parties were speaking on the telephone and the line went dead before the offeror heard the words of acceptance. Furthermore, if it is deemed that the provisions in relation to place of receipt subsequently determine the place of formation, does this necessarily mean that that is also time of formation?
However, although these decisions appear to be consistent with option three, it is submitted that they are of limited significance when it comes to choosing between options two and three in the contractual acceptance context.
However, it is not clear that this rules will be accepted in Australia, where the time and place of formation of email contracts remains uncertain. However, the authors point out that while the recipient of an email relating to a commercial transaction is expected to be aware of the declaration of intent on arrival of the email during normal business hours, in the case of a private transaction, this will depend on the particular circumstances.
Acceptance by electronic means
As has been briefly mentioned, e-mail and telefax, being means of instantaneous communication, could be compared to telex in this regard. Email contracts —When is the contract formed? Again, the importance of ascertaining the precise moment of contractual formation is demonstrated. The purchaser sends his email offering to buy shares, and the seller emails her acceptance of the offer. In face- to-face negotiations this rule provides few problems. The first principle is that if the offeree knows or should know that the email has not been received, he must send it again and if he does not, there is no contract. All in all, to form a binding contract, acceptance must be given unequivocally i. It has to date only been passed in two states, Virginia and Maryland, and has met with considerable criticism. The second limit on the scope of the chapter is that it deals only with the offer and acceptance requirement, and does not extend to other issues relating to contract formation and computer technology, such as the validity of electronic signatures and the satisfaction of requirements of form5. For an agreement to be legally binding, several ingredients have to be there. The dispute arose and plaintiffs sued for breach of contract. In such cases, the retailer can make it clear that the email it sends out is merely an acknowledgment of receipt of the order, and that the contractual acceptance will follow later on. It is not important if the addressee has actually read it, or maybe even could not read it due to technical problems, as it is within the addressee's "sphere of influence" to provide for adequate means to ensure that his internal communication functions satisfactorily.
Similarly, the second US Restatement of Contracts states that: A written revocation, rejection, or acceptance is received when the writing comes into the possession of the person addressed, or of some person authorized by him to receive it for him, or when it is deposited in some  place which he has authorized as the place for this or similar communications to be deposited for him What happens if between the sending of an acceptance and the actual receipt by the offeror the price of the shares in question changes dramatically?
A mere acknowledgment that an offer has been received will not satisfy this test — a fortiori if the sending of the acknowledgment was a legal requirement — but an email confirming that the order has been successfully processed may well be interpreted as a clear expression of agreement, subject of course to the precise contents of the message.
based on 87 review