Offer and Acceptance Termination of Offer

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OFFER AND ACCEPTANCE: TERMINATION OF OFFER

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Wednesday, 03 December 2008 01:52 -

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3 . OFFER AND ACCEPTANCE: TERMINATION OF OFFER

An offer may terminate or be terminated in the following ways; (i) Revocation; (ii) Lapse of

Time; (iii) Failu

re of a condition subject to which offer made;

(iv)

Death

(Also counter-offer and rejection).

(i) Revocation. It is possible for the offeror to revoke the offer at any time up until

acceptance.

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Note that it makes no difference that the offeror has promised to keep the offer open by an

'option'. This will be revoked along with the original offer unless there is a binding contract to

keep it open;

ROUTLEDGE v GRANT (1828)

The defendant offered to buy the claimant's house, saying that he would give him six weeks tothink the offer over. Well before the time was up, the defendant withdrew his offer, which

shortly afterwards the claimant purported to accept.

Held:

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Revocation is ineffective unless it has been communicated to the offeree and it is effective, if bypost, when it arrives;

BYRNE v VAN TIENHOVEN(1880)

The defendants, who carried on business in Cardiff, wrote to the claimants, whose office was in

New York, offering to sell certain goods at a fixed price. On the day on which they received the

offer the claimants telegraphed their acceptance, but three days previously the defendants had

sent a letter withdrawing the offer, this did not arrive until after the acceptance had been

confirmed by post. The claimants

sought damages for breach of contract.

Held:

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The offeror need not himself inform the offeree of the revocation; this can be done by some

reliable third party;

DICKINSON v DODDS (1876)

Dodds offered in writing to sell some property to Dickinson, the offer 'to be left over until Friday'.

Dickinson decided to buy the property, but before he could accept he heard on the Thursday

from a third party that Dodds had sold the property to someone else.

Dickinson immediately accepted the original offer, and later sought an order to enforce the sale

on the ground that Dodds had not expressly revoked the offer made to him, thus leaving it open

to him to accept.

Held:

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A subsequent offer may have the effect of revoking a previous offer; the issue may arise in the

context of the battle of the forms:

PICKFORDS v CELESTICA (2003)

On 13 September P offered to carry out a removal of Cs workshop and office equipment to a

new location., specifying their charges and stating that the cost would not exceed 100,000. On

27 September P sent a further communication providing more details and offering to carry out

the work at a fixed price of 98,760. On 15 October C purported to accept the offer made on 13

September. Had the second offer revoked the first one?

Held:

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Unilateral contracts and revocation. Unilateral contracts cause some problems in relation to

revocation; is it possible for the offeror to revoke the offer

once the offeree has begun to accept; i.e.

commenced to fulfil the condition stipulated in the offer?

Suppose that X offers 100 to the first person to swim across the River Trent on New Years

Day.Y, having seen the offer, dives in and starts to swim across .When Y is just a few metres

from the other bank of the river, X shouts to Y, Sorry pal, the offer is withdrawn!.

If the general rule as to acceptance was applied, acceptance would not be complete until the

act was fully performed, leaving the offeror free to revoke at any time.

Possible solution: the 'two contract' theory; i.e. offer accompanied by another implied offernot to revoke providing the offeree begins the task within a reasonable time.

English cases turn on the intentions of the parties and the circumstances of the

case, e.g.:

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ERRINGTON v ERRINGTON(1952)

A father invited his daughter and son-in-law to live in a house, which he had bought for 750, of

which 500 had been borrowed from a building society. The house was in his name. He said

that if the couple paid off all the remaining mortgage repayments, the house would be theirs (a

unilateral offer).

Although they did not bind themselves to do so, they in fact did pay instalments as they became

due.

The father died before the whole debt had been paid off, and his personal representatives then

tried to withdraw his offer

. Held:

The same approach was adopted by the Court of Appeal, obiter, in DAULIA v FOUR MILLBAN

K NOMINEES

(1978)

it was said that it was too late for the offeror to withdraw his offer once the offeree had

embarked on performance.

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Another problem of revocation in relation to unilateral offers is that of communication. Where an

offer has been made to the public at large by an advertisement, it would seem that it can be

revoked by a similarly publicised advertisement, even though the second advertisement would

not be read by all the potential offerees, i.e. reasonable steps should be taken to communicate

revocation: SHUEY v USA (1875).

( i ) Lapse of Time. An offer may lapse either after the lapse of a fixed period for

which it was left open or after a reasonable length of time has elapsed;

RAMSGATE

VICTORIA HOTEL

v MONTEFIORE

(1866)

The defendant applied for shares in the claimant company in early June 1864. The shares were

allotted to him in late November 1864. The defendant refused to p[ay for the shares.

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Held:

(iii) Failure of condition subject to which offer made. An offer may be conditional and if

the condition in the offer is not satisfied, the offer will not be capable of acceptance;

FINANCINGS

v STIMSON

(1962)

CA held that an offer to sell a car on HP was subject to an implied condition that the car

remained undamaged until the moment of acceptance. As this condition had been broken, there

was no contract.

(ii) Finally, Death. It is clear that the offeree cannot accept after he has had notice of the

offeror's death. However, if the offeree is ignorant of the offeror's

death, it seems he may only validly accept if it is the kind of contract that is capable of

performance after death i.e. not a contract for personal

services; BRADBUR

Y v MORGAN

(1862)

Where it is the offeree who dies, it is thought that the offer terminates automatically.

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Offer and Acceptance Termination of Offer