Title of the Case: Felthouse v Bindley, 1862
Citation: (1862) 11Cb (NS) 869, EWHC CP J35;142 ER 1037
Court: Court of Common Pleas.
Parties Involved:
• Appellant: Bindley
• Respondent: Paul Felthhouse
Bench: Willes J, Byles J and Keating J.
BACKGROUND
Paul Felthouse bargained with his nephew to acquire a certain horse, stating, “If I hear nothing more about him, I consider the horse mine at £30 15s.” His nephew did not respond, but he did tell Bindley, the auctioneer, not to sell the horse. Bindley sold the horse by accident. The auctioneer was sued by Felthouse for conversion.
To win a conversion action, Felthouse had to show that the property (horse) was in his possession at the time of the sale, as well as that he and his nephew had entered into a contract for the sale of the horse.
Because there was no notification of approval prior to the auction, the nephew was not obligated to sell the horse to Felthouse on the auction day. This was a seminal case in contract law, establishing that one cannot obligate another to reject one’s offer, or that “silence cannot be construed as acceptance.” The evidence revealed that the acceptance was communicated by the behaviour, therefore the matter was later reviewed.
FACTS
Mr. Bindley was sued by Paul Felthouse, a London builder. He was looking to purchase a horse from his nephew, John Felthouse. Uncle offered to buy a horse from nephew, but there was a price discrepancy, as uncle offered less than nephew wished; as a result, uncle stated in his written declaration, “if I hear nothing more about him, I consider the horse mine at £30 15s.” John, his nephew, did not respond to him and was busy at his Tamworth farm, but he did urge his auctioneer, William Bindley, to reserve the horse, meaning not to sell it. The horse, however, was sold by the auctioneer by omission and fetched more money than the uncle had given. The auctioneer quickly discovered his error and wrote to the uncle, apologising for the omission.
In his letter, he also said, “Instructions were provided to me to reserve the horse,” but this was all done by mistake. Later, nephew wrote to his uncle, expressing his displeasure with the auctioneer’s indifference, despite the fact that he had previously been informed that the horse had been sold. He went on to say that he would try to get the horse back from the buyer. When uncle Felthouse learned that the horse had been sold, he sued the auctioneer, Bindley, for torts of conversion, which is defined as using someone else’s property in a way that is not in accordance with their rights. It was necessary to prove that the horse was his property in order to prove that the contract was valid.
Mr. Bindley claimed that because the nephew had not conveyed his acceptance of the complainant’s offer, there was no legal contract for the horse.
DATES OF THE JUDGEMENT
★ Decision passed on 8th July 1862.
JUDGES
The Bench comprised Willes J, Byles J and Keating J.
ISSUE FACED:-
This case raises the question of whether or not there was a legal contract between Plaintiff, Paul Felthouse, and defendant, William Bindley, because he was sued for conversion, which requires plaintiff to show his ownership of the horse. This case also raises the question of whether silence or a refusal to reject an offer constitutes acceptance.
MAJOR ARGUMENTS PRESENTED BY THE COUNCIL
✓ Plaintiff’s Argument:
The plaintiff claimed that the contract was legally binding. Because the nephew intended to sell the horse and did not respond to his uncle’s letter, it is safe to assume he would accept the offer (as mentioned in the letter). From Nephew’s perspective, there was an implied acceptance. Later, Felthouse claimed that the horse had become his property as a result of the arrangement. As a result, Bindley was held responsible for the conversion of the property in his name.
✓ Defendant’s Argument:
Because John Felthouse did not express his approval to his uncle Paul Felthouse, the defendant claimed there was no existing contract. As a result, because the horse did not belong to Plaintiff, Paul Felthouse, he cannot suit him under the Tort of Conversion.
RATIO PER JUDGE
1. Silence is unclear and difficult to deduce the desire to accept; explicit communication is required.
2. The acceptor must convey his acceptance to us so that we can determine when a contract binds both parties. There will be no contract if acceptance is conveyed by a third party; it must be accepted or offered by the acceptor.
3. Prevents an offeror from taking advantage of an offeree’s lethargy by making him contractually accountable until he specifically rejects the offer. You can’t force someone to do something they don’t want to do.
OBSERVATION:-
There was no contract between the uncle and his nephew for the horse, it was discovered. Because the contract requires two things: first, the offeree’s acceptance must be conveyed to the offeror, and second, the offeror cannot place the burden of refuse on the offeree. Because silence does not imply acceptance, the offer is not accepted. Acceptance of an offer should be expressed in a clear and concise manner. Despite the fact that the nephew intended to sell his horse, he forgot to inform his uncle of his willingness.
DECISION
In this case, it was determined that the Felthouse and his nephew did not have a contract for the horse. There had been no acceptance of the offer; silence did not imply acceptance, and no one can impose an obligation on another. Any acceptance of an offer must be expressed in a clear and concise manner. Despite the fact that the nephew planned to sell the horse to the complaint and expressed interest in doing so, no contract of sale existed. As a result, the nephew’s refusal to react to the complainant did not imply that he had accepted the complainant’s offer.
“I am of the opinion that the rule to enter a nonsuit should be made absolute,” Willes J said in his lead judgement. John Felthouse, the plaintiff’s nephew, owned the horse in question. The plaintiff and his nephew related had a chat in December 1860 about the former’s acquisition of the horse. The uncle claimed to have purchased the horse for £30, while the nephew claimed to have sold it for 30 guineas, but there was definitely no complete bargain at the time.” The nephew writes on the 1st of January, 1861.
Thus, it is apparent that the nephew meant for his uncle to have the horse at the price that he (the uncle) had specified, £30 and 15s, but he had not conveyed this desire to his uncle or done anything to commit himself. It appears to me that, regardless of the following letters, there was no agreement to transfer the property, namely the horse, to the plaintiff, and that he thus had no right to object to the sale. So, what impact does the ensuing correspondence have? The auctioneer’s note is completely useless. The correspondence that follows has no legal ramifications.
Both Justices Byles and Keating concurred with Justice Willes. “As between the uncle and the auctioneer, the only matter we have to examine is whether the horse was the plaintiff’s property at the time of the sale on the 25th of February,” Justice Keating said. Nothing, it appears to me, had been done at the time to transfer the property from the nephew to the plaintiff. A proposition had been made, but there had been no binding acceptance until that day.”
ANALYSIS:-
The court reasoned that the nephew’s actions in attempting to keep the horse out of the sale did not necessarily imply that he intended to accept his uncle’s offer – even though the nephew later wrote to apologise for the error – and that his silence in response to the offer did not necessarily imply acceptance. This can be critiqued since it’s difficult to see how there could have been stronger indication that the nephew intended to sell, but on the other hand, there are numerous circumstances when silence would be unwelcome and perplexing. There would have been a contract in Felthouse if the nephew had said that if his uncle didn’t hear anything further, he might regard the offer as accepted.
CONCLUSION:-
The Hon’ble Court determined that the plaintiff and his nephew did not have a contract for the horse. There had been no acceptance of the offer; silence did not imply acceptance, and no one can impose an obligation on another. Any acceptance of an offer must be expressed in a clear and concise manner.
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FELTHOUSE V BINDLEY FELTHOUSE V BINDLEY FELTHOUSE V BINDLEY FELTHOUSE V BINDLEY FELTHOUSE V BINDLEY
