Legal Definitions - acceptance by silence

Acceptance by Silence refers to a situation in contract law where, under specific circumstances, a party's failure to respond or speak up is interpreted as agreement to an offer.

Generally, silence alone cannot constitute acceptance of an offer. However, there are limited exceptions where silence can legally signify acceptance. These exceptions typically arise when:

• The parties have an established course of dealing where silence has previously indicated acceptance.
• The offeree (the party receiving the offer) takes the benefit of the offered goods or services, knowing that they were offered with the expectation of payment.
• The offeror (the party making the offer) explicitly states that silence will constitute acceptance, and the offeree intends to accept by remaining silent.
• Trade customs or industry practices dictate that silence implies acceptance in certain contexts.

Here are some examples:

• Subscription Renewal: Imagine a software company sends an email to a long-term client stating, "Your annual premium subscription will automatically renew on [Date] for another year at the current rate of $299, unless you notify us of your intent to cancel within 30 days." The client has a history of renewing this subscription annually and has previously agreed to terms that include automatic renewal clauses. If the client does not respond or cancel within the 30-day period, their silence is considered acceptance of the renewal terms.

  This illustrates acceptance by silence because the established business relationship and prior agreements create a reasonable expectation that inaction signifies consent to the renewal, especially when the offer clearly states the consequence of silence.

• Goods Received and Used: A small bookstore regularly orders books from a particular distributor. One month, the distributor sends an additional box of newly released novels that the bookstore owner had previously expressed interest in, along with the regular order. The invoice for this extra box states, "If not returned within 10 days, this shipment is considered accepted for purchase." The bookstore owner receives the box, places the new novels on the shelves for sale, and does not contact the distributor to return them within the specified timeframe.

  Here, the bookstore's silence (failure to return the books) combined with its actions (displaying them for sale) and the prior expression of interest, can be interpreted as acceptance of the offer to purchase the additional novels. The bookstore took the benefit of the goods and did not object within the stated period.

• Professional Service Continuation: A freelance graphic designer has been working on a branding project for a client for several months. Nearing the project's completion, the designer sends a proposal for an additional phase of work, outlining new deliverables and a revised fee, stating, "Unless I hear otherwise by Friday, I will proceed with Phase 2 of the project starting next Monday." The client has a strong, trusting relationship with the designer and has previously allowed the designer to proceed with work based on similar informal agreements and proposals without explicit written confirmation.

  In this scenario, given the ongoing professional relationship and the client's past behavior of implicitly agreeing to work by not objecting, the client's silence by Friday could be considered acceptance of the proposal for Phase 2. The client's inaction, in the context of their established dealings, signals consent.