Felthouse v Bindley (1862) 11 CB (NS) 869

Facts

• The case concerned a dispute over the attempted sale of a horse between Mr. Paul Felthouse (uncle) and his nephew, Mr. John Felthouse.
• Mr. Felthouse wrote to his nephew: "If I hear no more about him, I consider the horse mine at £30 15s," seeking to bind the nephew's silence as acceptance.
• The nephew did not reply to the uncle's letter.
• The nephew intended to sell the horse to his uncle and instructed an auctioneer, Mr. Bindley, to exclude it from an auction.
• The auctioneer accidentally sold the horse at auction to a third party.
• The uncle sued the auctioneer for conversion, claiming he had legal title to the horse, asserting there had been a contract of sale.
• The central issue was whether the nephew’s silence in response to the uncle’s letter created a binding contract.

Issues

1. Whether an offeree's silence can constitute valid acceptance of a contractual offer.
2. Whether a contract of sale existed between the uncle and nephew such that the uncle held legal title to the horse.
3. Whether the unilateral imposition that silence would amount to acceptance is effective in contract formation.

Decision

• The Court of Common Pleas ruled against the plaintiff (uncle), finding that no contract had been formed.
• The court held that acceptance of an offer must be explicitly communicated to the offeror; silence does not amount to acceptance.
• The uncle's attempt to stipulate that silence would be treated as acceptance was deemed legally invalid.
• The nephew’s internal intention to sell the horse was not communicated to the uncle and did not satisfy the requirements of acceptance.
• No legal title passed to the uncle, so he could not succeed in the action for conversion.

Legal Principles

• Silence cannot constitute acceptance; a valid contract requires clear expression or communication of assent by the offeree.
• An offeror cannot unilaterally impose contractual liability on an offeree by stipulating that silence will amount to acceptance.
• Contract formation is grounded in mutual assent, which must be demonstrably communicated between parties.
• Although mere silence is insufficient, unequivocal conduct may amount to acceptance in other circumstances, but no such conduct was present here.
• The judgment reinforced the necessity of clear and certain communication in contract formation to prevent unfairness and ambiguity.

Conclusion

Felthouse v Bindley definitively established in English contract law that silence cannot be deemed acceptance of an offer, requiring express communication or unmistakable conduct evidencing agreement for a binding contract to arise.