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Offer and Acceptance

Omission to Act
Last updated: 06-Oct-2014

Per Lord Steyn in Vitol S.A. v Norelf Ltd. (The Santa Clara), [1996] Vol. 2 Lloyd’s Rep. 225 at p.230:

Sometimes in the practical world of businessmen an omission to act may be as pregnant with meaning as a positive declaration. While the analogy of offer and acceptance is imperfect it is not without significance that while the general principle is that there can be no acceptance of an offer by silence, our law does in exceptional cases recognize acceptance of an offer by silence. Thus in Rust v Abbey Life Assurance Co. Ltd., [1979] 2 Lloyd’s Rep. 334 the Court of Appeal held that a failure by a proposed insured to reject a proffered insurance policy for seven months justified on its own an inference of acceptance. See also Treitel, The Law of Contract, 9th ed. (1995), pp. 30-32. Similarly, in the different field of repudiation, a failure to perform may sometimes be given a colour by special circumstances and may only be explicable to a reasonable person in the position of the repudiating party as an election to accept the repudiation.

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