 Hello, this is Waylon Chow. Welcome to this series on forming contracts. This video is part C, looking at the requirement of an agreement, and specifically the acceptance part of forming an agreement. Remember that an agreement is formed by an offer and an acceptance. Thus far, we've looked at the rules regarding offers. Let's now look at acceptances. Sonya again is trying to sell her laptop to Ahmed. Do you want to buy my Apple laptop for 700 dollars? This time Ahmed says yes, I'll take it, only if you'll throw in your AirPods. Is there an agreement between Sonya and Ahmed? An acceptance is where the Offeree agrees to enter into the contract proposed by the offer or an acceptance has to be communicated by the Offeree to the offer or an acceptance must also be full and unconditional acceptance of all the terms of the offer. If it's not a full and unconditional acceptance of all the terms, it is considered to be a counter offer. Ahmed has added a condition of including Sonya's AirPods to his acceptance of the offer, or specifically he's saying that he will, he does want to buy her laptop for 700 dollars, but only if it includes her AirPods. Therefore, there is no actual acceptance that has occurred here. In other words, there was no full and unconditional acceptance of all of the terms of Sonya's offer. What we have is a counter offer by Ahmed. Sonya can now reject or accept that counter offer. Most commonly an offer is accepted by the Offeree making a promise. So most contracts are considered to be bilateral contracts where the parties are exchanging promises. The simple example that we've been working with is where Sonya has made an offer to sell her laptop for 700 dollars. And when Ahmed accepts that offer, Ahmed is promising to pay 700 dollars to Sonya in exchange for Sonya's promise to give him the laptop. And acceptance can also be done by performance instead of by making a promise. So this is where the terms of the offer are being done. They're being performed by the Offeree as a way of accepting the offer. This is called a unilateral contract where one party makes a promise in an offer while the other party, the Offeree, performs the requested act that's set out in the offer. A typical example is where someone has posted a poster. The poster could say, I'll pay 1000 dollars to anyone who finds my lost cat. So that is an offer. So the contract is created once the requested act is performed. So if you go out and find that cat and return that cat to the owner, you are accepting that offer by performance. The classic case of acceptance by performance is Carlil vs. Karbala Spokeball, which is covered in the textbook. So please have a look at that case. To be effective, an acceptance needs to be communicated by the Offeree to the Offeree. Now that communication can be done by words, conduct, and sometimes silence. So words are the most direct way of doing it. It can be in writing. It can be in writing on paper. It can be in writing online and electronically or it can be done verbally. Conduct can be as simple as a nod of a head or a handshake or any other action that can be reasonably interpreted to be an acceptance. Now silence sometimes could be considered acceptance. I say sometimes because silence generally cannot be considered to be an acceptance, but if there is some kind of prior agreement between the parties where it is clearly stated that a lack of response or silence could be considered to be an acceptance, then in that kind of situation, the silence or failure to respond could be considered to be an acceptance. So an example could be if we talk in advance and say that if I don't hear from you, I will assume that you do want to buy my car if I don't hear from you by noon tomorrow. So if I don't hear from you, if there's only silence, if I don't hear a response to them, I will assume that you do want to buy my car and that you have accepted the offer. So only in those kinds of situations where there is that prior agreement can silence be interpreted as being acceptance, but usually silence is not considered to be acceptance. When a deadline is involved, it is important to determine when does an offer or an acceptance occur. So it depends on the type of communication that's being used to communicate that offer or acceptance. If an instantaneous form of communication is being used, then the acceptance or offer is effective when and where it is received. So examples of instantaneous communication are a face-to-face meeting, a telephone or voice call fax or a video conference calls such as Zoom. If we're using what's considered to be non-instantaneous communication, such as regular mail or what we call snail mail, then there's something called the postal rule that's been developed by the courts. The postal rule says an offer or acceptance is effective where and when it is sent, which means that at the time at which the letter is dropped into the mailbox. When we're dealing with electronic contracts, it could be via email or it could be using a specific app that's designed for the electronic signing of legal documents. One such app that's used quite commonly is called DocuSign. Then we need to look at some specific rules that are in the Electronic Commerce Act. We're back with Sonya and Ahmed. Sonya again is making her offer to sell her laptop for 700 and Ahmed is asking to let him think about it. He doesn't like the laptop. This time Sonya says, sure, that's fine, think about it, but let me know by noon tomorrow by either text or email. So at 11.45 am the next day, which is before the deadline, Ahmed sent an email to Sonya. The email said, hi Sonya, about that laptop with yours, I'll take it for 700 dollars. But Sonya replies by email, sorry Ahmed, I didn't check the email on my phone until after class, it was done at 3pm. I sold it to someone else already. So is there an agreement between Sonya and Ahmed? Let's now have a close look at the Ontario Electronic Commerce Act. Every province in Canada has similar legislation based on the Uniform Electronic Commerce Act. So the sections that we'll talk about in the Ontario Electronic Commerce Act, there would be similar provisions in the legislation of every other province in Canada. So in section 19, subsection 19 one, the ECA confirms that an offer and acceptance can be communicated electronically. So for example, if you're providing an offer or acceptance by communication via email, or it could be through an e-commerce site where someone is clicking, I agree, any one of those ways and those electronic means can be used to validly make an offer and validly accept that offer. The ECA in subsection 19-3 confirms that electronic contracts can be valid, or it's actually saying the corollary of that, it's saying a contract is not invalid or unenforceable by reason only of being in electronic form. The ECA contains specific rules determining when an electronic message is considered to be sent and received, which is helpful in determining when an offer or acceptance has been done. With regard to the sending of messages, a message is considered to be sent once it enters an information system beyond the sender's control. So if you're using email and when you send an email, when you press the send button on your smartphone or on your computer, that message gets sent off out of your device into the internet. And so what we call the internet could be called an information system beyond your control. So at the time that you send, press the send button, that message gets sent off, that's the time your message is considered to be sent. With regard to the receiving of electronic messages. If there are two different rules, first rule is if the recipient designates or uses a particular information system for forming contracts, the message is received when it enters the system and becomes capable of being retrieved by the recipient. So let's try to translate that into something that most people can understand. So if I'm making an offer to you and I specifically say, provide me with your reply by email. So what I am doing is I am designating a particular information system to form a contract here. I'm saying send me your reply via internet email. That's the particular information system and saying you should use in your reply. So then that rule applies. So when you send your reply, let's say you want to accept my offer, you send me an email saying that you accept my offer. So your email gets sent out of your device into the internet. And at some point in time, that message is capable of being retrieved by one of my devices, like let's say my smartphone. So when that message becomes capable of being retrieved, then that's the time the message is considered to be received. So it's not when I actually receive it. It's not when I actually read the message. It's when the message is capable of being retrieved from the internet. The second rule to determine the time of receipt is where the recipient has not designated or does not use a particular system for forming contracts. Then the message is received when the recipient becomes aware that it has entered one of its systems and is capable of being retrieved by the recipient. So if I did not tell you how you should reply to my offer, I did not specify you should be responding by email. But let's say you make that choice on your own. Because I didn't designate any particular information system that should be used, then your message is considered to be received when I become aware that your message is available to be retrieved. So that's usually when that message, when I receive some kind of ping or vibration on my phone indicating that a message has arrived in my inbox. Since Sonya directed Ahmed to respond her offer by text or email, she can be said to have designated an information system for the purpose of receiving an acceptance to her offer. Therefore, she is considered to have received Ahmed's email acceptance when that email was available to be downloaded on Sonya's phone, which is very likely to be before noon since he sent it at 11.45 a.m. It is likely that an agreement was formed between Sonya and Ahmed.