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Offer and Acceptance
Sufficient Consideration

Acceptance must be communicated

Acceptance must be communicated to the offeror for having a legal effect.

However, this is subject to the exception under the “postal rule” held by Adam's v Lindsell [1818] 1B & Ald 681. Under the postal rule, if a communication is by letter or telegram, the party trying to prove communication does not usually have to show that the recipient has actually receive it. The postal rule only requires the acceptance to be delivered only. The underlying reason is that business deals will become uncertain as nobody would know whether their acceptance had worked or not to make a contract. In Byrne v Van Tienhoven [1880] 5 CPD 344, the English court held that a contract was under by an effective acceptance when on that day and the plaintiff receive offer and send acceptance by telegram “upon the principle that the written of the offer has expressly or impliedly assented to treat an answer to him by a letter duly posted as a sufficient acceptance and notification to himself”. However, if the acceptance communicated by electronic means other than by post or telegram, the “postal rule” does not apply. Electronic communication can be in the form of telephone, telex or in the Internet environment emails or online form, transmissions. In Brinkibon v Stahag Stahl [1983] 2 AC 34, the House of Lords held that a telexed acceptance is effective when and therefore where it is received unless the parties could be held to have intended otherwise. The proposition equally applies to fax messages even though the acceptance is in the facsimile is received from the machine rather than being a physical document forwarded by the offeree (Susanto-Wing Sun v Yung Chi [1988] No.A8177. The emergence of emails, fax and other forms of electronic communication have rapidly eroded the importance of the postal rule. Online auction is a popular form of e-commerce activity. The leading web-site platform is of course eBay.com. However, it must be noted eBay does not put goods for sale at eBay.com and hence it is not an auctioneer in capacity. eBay only provides a platform to its members to put goods for sale through auction and for members to offer bids.

In law, the putting up of goods for sale by auction is not an offer. The person who bids makes an offer (and hence be the offeror) which the auctioneers can either accept or reject. In a typical online auction, a number of people offer bids which are openly displayed on the web-site. Section 60 of The Sale of Goods Ordinance provides that each higher bid destroys all earlier bids. The legal principle in auction is that the auctioneer's final determination of the successful bid is the only acceptance. However, online auction platform providers have strict requirements on members who put their goods for bid on their web-site. A good placed for auction with conditions fulfilled by bidder ought to be sold and delivered. Auction participants are encouraged to grade their counter-parties in each transaction for subsequent participants to refer. Delinquent participates may cause their membership qualified.