The Fraudulent Foisted Contract

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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. This is known as paper terrorism, it is a foisted and fraudulent contract 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.

Felthouse v Bindley (1862) 142 ER 1037 is a universally accepted cornerstone of the common law of contract, but as cited more recently in Glenevan Pty Ltd [2015] NSWSC 201:

“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.”

Extract from Australia and New Zealand Banking Group Ltd v Evans; Evans v Esanda Finance Corporation Ltd [2016] NSWSC 1742 

“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 E vans 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.” 3

Felthouse v Bindley

In Felthouse v Bindley (1862) 142 ER 1037, the defendant Bindley was an auctioneer. The plaintiff’s nephew, John Felthouse, spoke with his uncle about the purchase of a horse and subsequently wrote to him regarding the price for the horse. The plaintiff Paul Felthouse replied that he would not pay the 30 guineas sought by his nephew for the horse, but would pay 30l 15s and stated that “If I hear no more about him, I consider the horse mine at 30l. 15s.” John Felthouse did not reply and the horse was later sold with other stock, fetching more than the uncle had offered. The auctioneer subsequently became aware of his mistake in selling the horse and wrote the the plaintiff apologising for the error and stating, in part, that: “Instructions were given me to reserve the horse …”

John Felthouse also wrote to his uncle, stating that he was annoyed by the sale, as he had advised Bindley that the horse had already been sold, and that he would try to recover the horse from the purchaser. 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.

It was held at trial by Justice Keating, that 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.”

The offer remained open at the date of the sale. On that date the auctioneer was told by the nephew that the horse had already been sold and it was therefore clear that ‘the nephew in his own mind intended his uncle to have the horse at the price which he (the uncle) had named’. But this intention had not been communicated to his uncle and he had done nothing to bind himself. As a result, at this time nothing had been done to “vest the property in the horse in the plaintiff” at the time the horse was sold. The subsequent correspondence has no legal effect.”

“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.” 4

Citing only a few of many possible similar authorities:

An offeror may not arbitrarily impose contractual liability upon an offeree merely by proclaiming that silence shall be deemed consent.” 5

“As a general rule, it is not enough for one to whom an offer is made to assent inwardly; the offeree must communicate acceptance to the offeror. Ordinarily, therefore silence will not operate as an acceptance even though the offeree should prove an intention to accept. This is not a technicality but part of the requirement of a bargain. No reasonable person, on receiving a proposal that looks for a reply, considers the bargain concluded until the manifestation of assent. Nor will a reasonable offeror ordinarily consider that silence on the part of the offeree manifests the latter’s acceptance. It would plainly be an imposition for an offeror to write to a stranger offering to sell an encyclopedia and adding that the latter’s silence will be considered an acceptance.” 6

“Acceptance has no legal effect until it is communicated to the offeror (because it could cause hardship to the offeror to be bound without knowing that his offer had been accepted). The general rule is that a postal acceptance takes effect when the letter of acceptance is posted (even if the letter may be lost, delayed or destroyed) However, the postal rule will not apply if it is excluded by the express terms of the offer. An offer which requires acceptance to be communicated in a specified way can generally be accepted only in that way. If acceptance occurs via an instantaneous medium such as email, it will take effect at the time and place of receipt. Note that an offeror cannot stipulate that the offeree’s silence amounts to acceptance.”

A communication fails to take effect as an acceptance where it attempts to vary the terms of an offer. In such cases it is a counter-offer, which the original offeror can either accept or reject. For example, where the offeror offers to trade on its standard terms and the offeree purports to accept, but on its own standard terms, that represents a counter-offer. Making a counteroffer amounts to a rejection of the original offer which cannot subsequently be restored or accepted (unless the parties agree) It is important to distinguish a counter-offer from a mere request for further information regarding the original offer.” 7

“The requirement that there has to be an acceptance cannot be avoided or waived by the offeror’s saying that the offeree will be assumed to have accepted the offer if no rejection is received by the offeror. This rule is a reflection of the very general principal that people are not to have obligations thrust upon them without their consent and that, in general, people have to indicate their consent by some positive action. The principle is expressed in the statement that “silence cannot be consent”. 8

“The silence of the offeree, his failure to reject an offer, cannot amount to acceptance without more. … Although the offeror can dictate the time, place, and manner of acceptance … it seems clear that this will not cover the situation where the offeror says that silence will be enough … Indeed the Supreme Court of Canada has said that something more than a failure to reject an offer is required to constitute a binding contract.” 9

Many other similar cases are going through the courts at present in quite a few countries. The OPCA concept that “a non-rebuttal of a served document means a judgment” obviously appealed to many, but is actually overruled by a common law precedent from 1862 that is still a cornerstone for most Commonwealth nations.

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. 10

“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.”

Read about Gail Blackman and her Foisted Unilateral Contract Failure here. 11