Felthouse v Bindley

Case Name: Felthouse v Bindley (1862)¹

Citation: [1862] EWHC CP J35

Court: Court of Common Pleas

Judgment given by: Willes J, Keatings J, Byles J

Date of judgment: 8 July 1862

Parties: Claimant- Paul Felthouse- Uncle of John Felthouse, intending to buy his nephew’s horse.

 Defendant- Mr Bindley – An auctioneer who had accidentally sold the horse that Paul Felthouse wished to buy.

Facts of the case

Paul Felthouse wished to buy a horse from his nephew, John Felthouse. In a letter to John, the claimant wrote that he would buy the horse for a set price of 30 pounds, 15s, and that if he hears no more from him, he will consider the horse as his. To this, John Felthouse gave no reply.

Later, at an auction for the rest of John’s stock, Mr Bindely, the auctioneer, had been told not to sell the horse as it was promised to the claimant. Mr Bindley accidentally sold the horse at the auction for a price of 33 pounds.

The claimant sued Mr Bindely, arguing that the horse already belonged to him and had been wrongfully sold by the defendant.

Legal Issue

The main issue in the scenario was whether or not silence constituted acceptance of an offer, and whether the auctioneer was to be held liable if the ownership of the horse was not yet formalised.

Arguments of the parties

Claimant-  

• The claimant argued that he had offered to buy the horse from his nephew. In his letter, he has stated that if John gives no reply to his letter regarding the same, he will assume that John has accepted his offer, and from then on, the horse will be owned by him.
• John had not objected to selling the horse to the claimant and had told the defendant not to sell the horse, showcasing that he had accepted the claimant’s offer without verbalising it.
• The claimant referred to Smith v. Neale²to argue that the nephew didn’t need to show in writing that he had agreed to the claimant’s offer and that his actions were an indication of his acceptance.
• The counsel for the claimant also referred to the case of Bill v Bament,³ arguing that the memorandum, which satisfies the statute of frauds,⁴is allowed to be made at any moment before action is brought.

Defendant-

• The defendant argued that there was never a formation of a valid argument between the parties.
• It was also argued that the horse was not under the ownership of the Plaintiff during the sale made by the defendant.
• The counsel for the defendant referred to the case Carter v Toussaint ⁵ and argued that since there was no sufficient memorandum made in the form of writing or payment that could satisfy the statute of frauds.
• The defendant argued that he could not be held liable as the horse was still under the ownership of the nephew, and the claimant had no ownership of the horse due to the absence of a formal acceptance by the nephew.

Judgement

Willes J gave the lead judgement in this case, which was unanimously accepted by the other judges, Keatings J and Byles J. The court in the case decided in favour of the defendant. The absence of a formal acceptance from the nephew resulted in there being no formation of a contract, meaning that the horse was not under the ownership of the plaintiff when it was sold at the auction.

The court also considered the argument of plaintiff, stating the presence of a sufficient memorandum to satisfy the requirement of the statute of frauds, but this claim was weakened due to the absence of a written acceptance from John Felthouse. ⁶

Ratio Decidendi

The reasoning of the court in the case was that silence can not be imposed as acceptance during contract formation.

The court also based its decision on the key components of contract formation. A legally binding contract requires an offer to be made and a formal acceptance of the said offer. In this case, no contract formation had occurred since there was no formal acceptance made. Acceptance needs to be communicated in order to have a legally binding contract. The court in the case also reasoned that an intention to accept an offer can not lead to the formation of a legally binding contract if there is no external communication of the acceptance of that offer.

Conclusion

Felthouse v Bindley is a landmark case in contract law. It established the principle that silence can not be imposed as acceptance during contract formation. The case has directly shaped the way courts look at acceptance in contract law. The decision in the case was made to ensure that no parties enter into a contract without their explicit agreement to do so.

The significance of this case can still be seen in the modern world with ever-changing means of communication and the formation of contracts in everyday lives.

Reference(S):

¹Felthouse v Bindley [1862] EWHC CP J35.

² Smith v Neale 140 E.R. 337.

³ Bill v Bament 151 E.R. 1060.

⁴ Statute of Frauds 1677, 29 Cha 2 c 3.

⁵ Carter v Toussaint 106 E.R. 1404.

⁶‘Felthouse v Bindley (1862) (Pleaders, August 20 2024) , https://blog.ipleaders.in/felthouse-vs-bindley-1862/ accessed 27th july 2025.