Traditionally contractual agreements come into being when one party, the offeror, makes an

offer and another party, the offeree, accepts the offer. The acceptance by the offeree must be
communicated back to the offeror. Circumstances however exist where contracts are come
into existence without the formal acceptance. Such instances include acceptance by silence,
postal acceptance, in unilateral contracts, in auctions and tenders. Advances in information
technology have enabled people to trade electronically through the internet and intranets.
This provides for formation of electronic contracts. Electronic contracts are another example
in which contracts are formed without traditional acceptance.
The Postal Acceptance Rule provides an exception to the general rule on acceptance in
contract formation. Under this rule a contract comes into being as soon as the letter of
acceptance is posted. This is despite the delay, loss or non delivery of the letter in the postal
system. This was held in the case of Henthorn v Fraser (1892) where it was stated that
acceptance is complete as soon as the letter is posted and any subsequent withdrawal
thereafter is ineffective. There are however stipulation for the rule to operate. Use of post
must be an acceptable method of communication between the two contracting parties. It also
applies when it was expressly stipulated in the offer that the post is an acceptable method of
communication. The letter must be correctly addressed and sufficiently stamped
Unilateral contracts also provide an example where the traditional acceptance rule in
formation of contracts does not apply. Unilateral contracts basically are contracts in which
only one party makes an express promise, without first securing a reciprocal agreement from
the other party. Such contracts arise when one party offers to pay another party in return for
performances. Reward offers are a typical example of unilateral contracts. The offeree
signifies assent by performing the said act. Thus acceptance is shown by conduct. An
example is the case of Carlill v Carbolic Smokeball (1893). In this case it was held that an
offer to the world can become a contract with those who fulfil the offered conditions.
Generally a contract cannot be accepted by silence. However there are circumstances where
silence is regarded as acceptance of a contract. For silence to be accepted as assent there
usually must have been some prior dealings between the contracting parties. A classic case is
that of Vogt v. Madden (1985). In this case it was held that silence can mean acceptance
where the offeror had given the offeree reason to understand that assent may be manifested
by silence e or in action. Thus in such cases when the offeree remain silent it signifies accent.
Another way that silence may be considered acceptance is where both parties have agreed