Revocation/Termination of Offer Flashcards
ROUTLEDGE v GRANT (1828) 4 BING 653
An offer can generally be revoked any time before acceptance.
An offer can generally be revoked at any time before acceptance, even if the offeror has said he will leave it open for a specified period of time.
An exception to this is if the offeree has given (or promised) something.
Routledge v Grant (1828) 4 Bing 653 is authority for the principle that such promises are not binding if they are gratuitous promises (in the sense that the offeree has not given, or promised anything in return for the promise to keep the offer open). So, generally, a promise to keep an offer open is not binding. The offeror can revoke the offer within the specified time as long as it has not been accepted.
However, there is an exception to this rule. In Mountford v Scott [1975] 1 All ER 198, the claimant paid £1 for the option to buy V’s house for £10,000. The option was exercisable within six months. V purported to revoke the offer. The claimant subsequently sought to exercise the option. The court held that the offer was irrevocable as the claimant had paid for the option (albeit a nominal amount). In paying £1, the claimant had given consideration for the offeror’s promise to leave the offer open for six months.
Byrne & Co v Van Tienhoven & Co (1880) 5 CPD 344,
Notice of withdrawal (Revocation) of the offer must be given and must be communicated to the offeree to be effective.
This was implicit in the decision in Byrne & Co v Van Tienhoven & Co (1880) 5 CPD 344, in which withdrawal of an offer by telegram was held to take effect only on receipt.
According to Professor Treitel, however, there are some exceptions to this general rule that revocation must be communicated. For example, notice of withdrawal sent to the offeree’s last known address would be effective if he has moved without notifying the offeror. Similarly, a withdrawal which reaches the offeree may be effective if the offeree simply chooses not to read it (Treitel, The Law of Contract, 13th edn, p 43).
Shuey v United States (1875) 92 US 73
An offer made to the public at large may be revoked through the same channel as it was made, provided the revocation is given the same prominence
HYDE v WRENCH (1840) 3 BEAV 334
A counter offer may impliedly destroy the original offer .
An acceptance must match exactly the terms of an offer, otherwise there can be no contract. Consequently, where the response to an offer suggests something different it will not be an acceptance, but a ‘counter offer’ and as such an implied rejection of the original offer.
In Hyde v Wrench (1840) 3 Beav 334, the defendant offered to sell his farm for £1,000. The claimant at first made a counter offer of £950, but two days later agreed to pay £1,000 and tried to accept the original offer. The defendant refused to complete the sale and the claimant sued. It was held that there was no contract, since the offer to buy for £950 was an implied rejection of the original offer and as such had destroyed it. Consequently it was no longer available to be accepted.
THE BRIMNES [1975] QB 929
There is a reasonable expectation that a notice of revocation sent to a business during normal business hours it is likely to be effective on receipt.
The offeree cannot complain that he did not know of the notice if failure to read it was due to his oversight or oversight on the part of his staff. This case was not concerned with revocation of an offer but may be applied by the court by analogy. In The Brimnes, a telex arrived between 5.30pm and 6pm but was not read until the next day. The Court of Appeal decided that it was communicated on arrival.
Therefore, if a notice of revocation is sent to a business and arrives during normal office hours, it is likely to be effective at that point, even if not read until the next day. However, it all depends on what is reasonable, bearing in mind the particular context and the situation as a whole.
It would appear from the case of The Brimnes [1975] QB 929 that in this situation the notice will be effective on receipt where it is reasonable to expect a member of staff to be available to read a notice of revocation.
If a notice of revocation is received (eg a fax) but not read until the following day, the court will have to decide when communication takes place, and this will depend on the reasonable expectation of the sender
Errington v Errington and Woods [1952] 1 KB 290, CA
In the case of offers of a unilateral contract, it is likely that the offeror cannot revoke once the offeree has started to perform the act of acceptance.
A father had bought a house in his own name, and allowed his son and daughter-in-law to live in it. He promised them that if they paid the mortgage instalments he would transfer the house to them. It was an offer of a unilateral contract as the couple did not promise to repay the mortgage, they simply did so (ie they performed the required act in reliance on the father’s promise). When the father died his widow sought possession of the house. It was held that the father’s promise was irrevocable so long as the couple continued to pay the instalments.
DICKINSON v DODDS (1876) 2 CH D 463, CA
Revocation of an offer can be communicated by a reliable third party.
Note that he need not have been authorised by the offeror to communicate notice of revocation, but he must be objectively perceived as being reliable. In his judgment in Dickinson v Dodds James LJ said: ‘In this case, beyond all question, the plaintiff knew that Dodds was no longer minded to sell the property to him as plainly and clearly as if Dodds had told him in so many words.’ The informant was known to Dickinson. Dickinson knew he could rely on what he had been told.
STEVENSON JACQUES AND CO V MCLEAN 1880) 5 QBD 346.
A request for information does not destroy the original offer, which can still be accepted.
Simply querying the method of payment, a prospective buyer is not saying ‘I do not want to buy at the stated price’; in other words he is not impliedly rejecting the offer. He is simply making an inquiry, the reply to which may determine his decision whether or not to accept. It is for this reason that a simple request for information does not affect the offer. It still stands and can be accepted.
