One of the most expensive mistakes in international trade starts with an innocent sentence: they did not reply, so they agreed. On the correspondence it looks convincing. In arbitration the decisive question begins where the parties assume the matter is closed.
The wording is almost always the same. An extension was requested and no answer came. An amendment was sent and nobody objected. A nomination departed from the contract but the other side said nothing. A price change was proposed and the silence was read as consent.
In 1862 an uncle wrote to his nephew offering to buy a horse for 30 pounds 15 shillings, adding that if he heard no more he would consider the horse his.
The nephew read the letter, intended to accept and did not reply. The horse was sold to someone else, and the uncle went to court.
The court held that an offeror cannot unilaterally treat another party's silence as acceptance. The case, Felthouse v Bindley, produced a rule that still applies.
Silence does not amount to acceptance.
The rule itself is straightforward, but in arbitration a second and far less comfortable question follows: how did the parties behave after the correspondence.
Silence at a single moment changes little. Silence combined with subsequent conduct can change everything.
A seller asks to extend the delivery period. The buyer says nothing. The seller ships in the new period, and the buyer accepts the documents, takes the goods and pays without objection. A year later the dispute is no longer about the letter but about whether the conduct of the parties evidenced an agreed variation.
A buyer sends a nomination outside the contractual deadline. The seller does not respond but acts on it: fixes the vessel, loads the cargo, issues the documents. Later the seller recalls that the nomination was defective. The tribunal asks the obvious question: if you did not agree, why did you act as though you did.
One party proposes a price change and receives no reply, yet both parties continue performing at the new price month after month. The dispute arises not from the silence but from conduct that looks like acceptance of the new terms.
GAFTA arbitrators do not read the correspondence alone. They look at how the contract was performed, whether the parties' actions matched the new terms, whether objections were raised in time, and what a reasonable merchant would have understood from the whole picture.
Even a polite "Noted" can matter. On its own it means very little, but combined with six months of performance on the new terms it may become significant evidence.
The practical conclusion is simple: do not leave the tribunal to guess. If you disagree, record it clearly and promptly. If you agree, it is equally worth putting in writing, because what you do after the exchange may speak louder than the exchange itself.
Silence alone does not create agreement, but silence followed by performance may. The most expensive letter in a contract is often the one that was never sent.