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

📌 Facts

Mr Felthouse discussed buying a horse from his nephew. Following a misunderstanding about the price, Felthouse wrote to his nephew offering to purchase the horse for £30 15s and stated:

“If I hear no more about him, I consider the horse mine at £30 15s.”

The nephew did not reply but intended to accept the offer. He instructed Mr Bindley, an auctioneer, not to sell the horse at an upcoming auction. However, Bindley mistakenly sold it. Felthouse brought an action against Bindley for conversion, claiming that the horse already belonged to him under a contract with his nephew.

📌 Issue

The issue was whether the nephew’s silence amounted to acceptance of Felthouse’s offer. The court therefore had to determine whether a binding contract had been formed before the horse was sold.

📌 Decision

The Court held that no contract existed between Felthouse and his nephew because the nephew had not communicated his acceptance before the auction. Although the nephew privately intended to sell the horse and had instructed the auctioneer not to sell it, this intention had not been communicated to Felthouse.

Willes J stated:

“It is clear that the uncle had no right to impose upon the nephew a sale of his horse for £30 15s unless he chose to comply with the condition of writing to repudiate the offer.”

The offeror could not declare that the offeree’s silence would automatically amount to acceptance. The nephew’s failure to respond therefore did not create a binding contract.

The nephew later wrote to Felthouse confirming that he had intended to sell him the horse. However, this communication occurred after the auction and could not retrospectively create a contract that existed before the horse was sold.

📌 Analysis

The case is a leading authority for the principle that silence will not ordinarily amount to acceptance.

It established that:

• acceptance must normally be communicated to the offeror;

• an offeror cannot impose a contract by stating that silence will be treated as acceptance;

• the offeree’s private intention to accept is not sufficient; and

• acceptance must be demonstrated through words or conduct that objectively communicates agreement.

The decision protects an offeree from being forced to respond to every offer they receive. Without this rule, a person could send unsolicited offers stating that a failure to reject them would create a binding contract.

Objective Agreement

A key feature of the judgment is the distinction between a person’s private intention and an objectively communicated acceptance.

The nephew appeared to intend to sell the horse to Felthouse. His instruction to the auctioneer not to sell it supported that intention. However, this conduct was not communicated to Felthouse before the auction.

Contract formation is judged objectively. What matters is not merely what the offeree privately intended, but whether their words or conduct communicated acceptance to the offeror. 

You can read more about whether silence can amount to an acceptance here.

Acceptance by Conduct

This case does not mean that acceptance must always be communicated verbally or in writing. Acceptance may sometimes be inferred from conduct.

For example, where an offeree begins performing the agreement in circumstances that objectively demonstrate acceptance, a contract may be formed. However, the conduct must amount to a clear indication of agreement and must ordinarily be known to the offeror.

Further Reading

• Offer and Acceptance Revision Sheet

• Can Silence Amount to Acceptance?