The Foisted Unilateral Agreement

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According to OPCA theory, a notarized document, sworn affidavit, notice of understanding intent and claim of right or other paperwork that is served by the offeror, becomes a valid contract or agreement of the parties after the expiry of an allotted time period. It is claimed that the terms are accepted by acquiescence, due to the offeree’s silence, non-response or inability to rebut the contents of the document within the given time. It appears to have originated in a misunderstanding of several maxims in Blacks Law Dictionary, which merely apply to procedures in a court.

SILENCE IS CONSENT

Applying this to an out-of-court process through an unrebutted affidavit strategy is known as a foisted unilateral contract, or “paper terrorism”, and it has no legal effect. This deceitful process is not even recognised at law, in fact it is easily established in various sources around the world that silence does not imply agreement. The common law’s concern with the protection of freedom is opposed to the notion that a person must take action to reject an uninvited offer or be bound by contractual obligations. It does not permit the imposition of a positive obligation to reject an offer to avoid a contract coming into effect.

In Millington v Police [2015] SASC 52 the appellant had served a number of documents, attempting a foisted contract, such as a “Notice of understanding and intent, claim of right” and then later a “Notice of Default” when it was “unrebutted” within the stated period. Parker J said (at 18):

“The purported legal effect of this series of documents is most unclear. The best I can understand is that D3 purports to relate to a unilateral contract formed on the basis of the earlier correspondence between Mr Millington and the police. It certainly has no relevance to a prosecution for an offence under the Road Traffic Act and I very much doubt that it would have any legal effect in any context. Be that as it may, it clearly does not operate to preclude a summary prosecution. Regrettably Mr Millington may have been misled by documents that are from time to time published on the internet.”

Similarly in Australia and New Zealand Banking Group Ltd v Evans; Evans v Esanda Finance Corporation Ltd [2016] NSWSC 1742 to which Garling J responded (at 53 and 154):

“Silence or inaction on the part of a party cannot, where no consideration passes, transform a unilateral demand into a contract. Even less can it constitute a breach of some self-invented contract by Mr Evans. .. The entirety of the Statement of Claim in the Evans proceedings is based on an irrational and legally untenable premise. The irrational premise is that a person or party can unilaterally impose a contract upon one or more other parties by producing a five page written document, full of gibberish and legal nonsense, sending it to the other party or parties and then asserting that when the recipients ignore the document, they fall to be bound by its terms.”

The strategy is also used to foister a contract on parties, followed by a lien, caveat or other encumbrance on their property for penalties that result from the breach of the alleged contract. As seen in Living Word Outreach Inc v Deputy Sheriff of Victoria [2014] VSC 454 where McMillan J noted (at 29):

“Mr Field asserted in addition that there existed a commercial lien between the appellant and the VGSO. Mr Field submitted that the appellant had ‘issued’ commercial liens against the VGSO containing claims that the VGSO failed to rebut and so must be held to have accepted.”

And Glenevan Pty Ltd [2015] NSWSC 201, where Brereton J stated (from 20):

“The repeated proposition that the affidavit, being unrefuted, “stood as law and fact” is nonsense. Unrebutted affidavits do not necessarily conclusively establish the facts deposed to in them. They are evidence of facts. They do not establish them conclusively. Even less do they establish law. The idea that somehow by serving the so-called commercial lien on the Deputy Commissioner or anyone else those parties become bound by it is equally nonsense. Mere receipt or notice of a document does not mean that the recipient acknowledges, accepts or becomes bound by it. In the course of legal proceedings, parties are served with statements of claim and affidavits on a regular basis. The receipt of those documents does not of itself mean that the party is bound by or party to it, any more than receipt of a letter by an addressee means the party accepts its truth or becomes bound by it. The “affidavit/commercial lien” demonstrates no defence whatsoever to the winding-up proceedings.”

Similarly in McKenzie v New South Wales [2017] NSWSC 661, where the plaintiffs sought declarations that their “unrebutted affidavit” strategy was legally valid, and the failure of the Department to respond constituted acceptance by acquiescence. Parker J responded:

Felthouse v Bindley (1862) 142 ER 1037 is a universally accepted cornerstone of the common law of contract that silence, in itself, cannot constitute acceptance.

Paul Felthouse offered to buy a particular horse from his nephew and stated (in a written offer) that “…if I hear no more about him, I consider the horse mine at £30 15s”. His nephew did not reply but instructed the auctioneer, Bindley, not to sell the horse. Bindley mistakenly sold the horse. Felthouse sued the auctioneer for conversion. To succeed in an action for conversion Felthouse needed to demonstrate that he owned the horse at the time of the sale; to do this he needed to prove that there was a contract between himself and his nephew for the sale of the horse. Felthouse could not impose a sale of the horse on his nephew by requiring him to notify Felthouse if he did not wish to sell on those terms. There was no communication of acceptance before the sale; consequently the nephew was not bound to sell Felthouse the horse on the day of the auction. Upon appeal before Justice Willes, Justice Byles and Justice Keating, it was ruled that:

“There was no complete bargain at the time of the conversation between uncle and nephew, nor was there a complete bargain when the uncle wrote to the nephew stating, in part, “If I hear no more about him, I consider the horse mine at 30l. 15s.” The uncle had “no right to impose upon the nephew a sale of his horse for 30l. 15s. unless he chose to comply with the condition of writing to repudiate the offer. … As between the uncle and the auctioneer, the only question we have to consider is whether the horse was the property of the plaintiff at the time of the sale on the 25th of February. It seems to me that nothing had been done at that time to pass the property out of the nephew and vest it in the plaintiff. A proposal had been made, but there had before that day been no acceptance binding the nephew.”

See also Carter’s Guide to Australian Contract Law (3rd Editon) at page 123: 

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The concept of a foisted unilateral contract is discussed in Meads v Meads [2012] ABQB 571 (from 447). I like how Rooke ACJ explained it (at 463):

“Many OPCA foisted unilateral agreements feature language that demands its recipient respond or rebut an obligation by a certain deadline. If not, then the agreement proclaims the recipient is bound by its terms. A moments consideration shows it is absurd that the law would respect that requirement. What if a document was received, but not read within the deadline? What if the document was received by an illiterate person, or one who did not understand the documents meaning? Could they have a “meeting of the minds”? Of course not, no more than handing a document to a sheep and saying “By not repudiating this agreement, I may eat you” establishes a mutual and common intent.”

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Noting the sense of endorsement that can result in an OPCA adherent from a Justice of the Peace witnessing affidavits that are intended for pseudo legal purposes, in Adelaide City Council v Lepse [2016] SASC 66 (from 64) Peek J sounded a warning to Notaries and Justices of the Peace that it is irresponsible to witness such documents, and to be vigilant in taking “reasonable care” that they are not being used for nefarious purposes:

The silence of an offeree in conjunction with the other circumstances of the case may indicate that he has accepted the offer, as found in Rust v Abbey Life Assurance Co Ltd [1979] 2 Lloyd’s Rep 334 (at 340), but merely a failure to reject an offer made is generally insufficient to create any contract.

Kirby P in Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd (1988) 14 NSWLR 523 (at 528 and 531) explained that in some circumstances an acceptance can be inferred, despite the absence of specific assent to an offer, from an objective consideration of all the relevant facts and circumstances and described this process as one of “implied acceptance”. Those circumstances include those where the offeree has exercised a choice and taken the benefit of an offer, knowing the terms of the offer and the offeror’s intentions to contract, so that the offeree will be bound despite the offeree’s silence. Referring to the formulation cited with approval in Laurel Race Course Inc v Regal Construction Company Inc 333 A 2d 319 (1975) (at 329 per Judge Levine, a decision of the Court of Appeal of Maryland.) McHugh JA said (at 535): 

“This formulation states acceptance in terms of a rule of law. However, the question is one of fact. A more accurate statement is that where an offeree with a reasonable opportunity to reject the offer of goods or services takes the benefit of them under circumstances which indicate that they were to be paid for in accordance with the offer, it is open to the tribunal of fact to hold that the offer was accepted according to its terms. … The ultimate issue is whether a reasonable bystander would regard the conduct of the offeree, including his silence, as signaling to the offeror that his offer has been accepted.”

In P’Auer AG & Anor v Polybuild Technologies International Pty Ltd & Anor [2015] VSCA 42, Whelan JA, with whom Ferguson JA agreed, set out the principles to be applied where what is alleged is a contract in the absence of clear offer and acceptance (from 8):

“The relevant starting point in a case of this kind is the principle that a contractual obligation cannot be imposed by an offeror upon an offeree merely by reason of a failure to reject an offer made.  Silence, in itself, cannot constitute acceptance. Nevertheless, leaving to one side cases of estoppel, cases where there is an historic relevant course of dealing, and cases where the events are so obscure or so far in the past that direct evidence is not available, there are circumstances where acceptance of an offer can be inferred in the absence of express consent. This will be the case if an objective bystander would conclude from the offeree’s conduct, including his silence, that the offeree has accepted the offer and has signaled that acceptance to the offeror.

Further, and more generally, it is now accepted that the existence of a contract can be established or inferred where a manifestation of mutual assent must be implied from the circumstances. It is important to emphasise that the circumstances in which a contract will be inferred, otherwise than by the traditional analysis of offer and acceptance, will be rare.  It seems to me that the position was well summarised by Sundberg J in Adnunat Pty Ltd v ITW Construction Systems Australia Pty Ltd [2009] FCA 499 when he said:

“A contract may in certain circumstances be inferred from conduct, even where no offer and acceptance can be identified … However the existence or otherwise of an enforceable agreement depends ultimately on the manifest intention of the parties, objectively ascertained … Where mutual promises are sought to be inferred, the conduct relied upon must, on an objective assessment, evince a tacit agreement with sufficiently clear terms. It is not enough that the conduct is consistent with what are alleged to be the terms of a binding agreement.  The evidence must positively indicate that both parties considered themselves bound by that agreement.”

In determining if an agreement has been made in this way regard must be had to the entirety of the relevant conduct. The precise point in time at which the agreement comes into existence may not be clear, and the relationship between the parties themselves may be dynamic in such a way that the terms of the agreement might be added to or superseded over time. In this context the absence of non-essential terms, or a lack of agreement on non-essential terms, will not invalidate the existence or effective operation of a binding contract.”

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