Chapter 1 Offer and Acceptance: Code: CLE 1.1 O (E)

LAW NOTES LIBRARY 1
Code: CLE 1.1 O (E)
Chapter 1 Offer and Acceptance

‘Offers last forever unless expressly revoked.’
Critically evaluate this statement as it relates to the formation of contracts (25 Marks)
Sample Structure:
1. To form a contract, a valid offer and a valid acceptance must be established.

2. A communication is regarded as an offer when it clearly states the terms of the offer
and clearly indicates that the offeror is prepared to be bound by those terms once the
offer is accepted.
3. On the other hand, ac acceptance is an unconditional agreement to all the terms of an
offer.
4. However, if an offer has been revoked or withdrawn before it is accepted then, no
contract will be formed.
5. The case of Payne v Cave establishes the principle that an offer may be withdrawn at
any time up until it is accepted, while the case of Routledge v Grant further reinforces
that principle by stating that the defendant has the right to withdraw his offer any
moment before acceptance, even though the time limit he gave had not expired.
6. However, the withdrawal of an offer must be communicated to the offeree, as
demonstrated in the case of Byrne & Co v Leon van Tienhoven, where the court ruled
that a revocation of an offer by post only takes effect when it is communicated to the
offeree.
7. On the other hand, unilateral offers are governed by different principles. Generally,
unilateral offers cannot be revoked once the offeree commenced performance, as ruled
in the case of Errington v Errington, and in the obiter statement in the case of Daulia v
Four Millbank Nominees. For revocations of unilateral offers made to the world at large,
it is enough for offerors to take reasonable steps to bring their withdrawals to the
attentions of such persons, even though t may not be possible to ensure that they all
know aobut it. In the American case of Shuey v United States, it was held that an offer
made by advertisement in a newspaper could be revoked by a similar advertisement,
even though the second advertisement was not read by all the offerees.
8. However, the withdrawal or revocation of an offer is not the only way an offer can be
terminated.
9. Other circumstances might also bring about the termination of an offer, one of them
being lapse of an offer when a time specified by an offeror is up.
10. However, an offer might alsp lapse after a reasonable length of time, even when the
offeror has not specified how long the offer will remain open, with the length of time,
even when the offeror has not specified how long the offer will remain open, with the
length of time depending on whether the means of communicating the offer is fast or
slow, and depending on the subject matter. In the case of Ramsgate Victoria Hotel v
LAW NOTES LIBRARY 2
Code: CLE 1.1 O (E)
Montefiore, the court ruled that the defendant’s offer to buy shares lapsed before the
plaintiff tried to accept it, and thus there was no contract between them
11. Besides that, the failure of a precondition of an offer may also cause the offer to be
terminated immediately. In the case of Financings Ltd v Stimson, the court ruled that
the agreement was an offer to make a contract with the plaintiff, which is subject to the
implied condition that the car remain in much the same state as it was when the offer
was made and thus, the offer lapses when the car was stolen and found badly damaged.
12. An offer would also lapse when the offeree rejects the offer. The offeree who has
rejected an offer cannot insist on accepting the same offer later.
13. A counter-offer would also terminate the original offer. A counter-offer is an offer made
in response to a previous offer by the other party during negotiations for a final contract.
In the case of Hyde v Wrench, the court ruled that an offer is terminated by a counter-
offer. The offeror can make a new offer on the same terms, but he’s not obliged to do
so. However, a request for information about an offer does not amount to a counter-
offer and thus does not terminate the offer. In the case of Stevenson Jaques v McLean,
the court ruled the plaintiff’s act of asking the defendant if they could buy the goods on
credit does not amount to a counter-offer and thus does not terminate an offer.
14. The death of the offeror would also effect whether or not an offer would still be valid.
From the case of Bradbury v Morgan, it appears that if the offeree knows that the
offeror has died, the offer will lapse, but if the offeree is unaware of the offeror’s death,
it probably will not. However, if the offer requires personal performance by the offeror,
it will usually lapse on the offeror’s death. There is no English case on whether or not
the death of an offeree would affect whether or not an offer would lapse, but it is
probably that the offer would lapse and cannot be accepted after the offeree’s death by
the his representation.
15. In conclusion, offers would be terminated if they are expressly revoked, but other
factors could also bring about the termination of an offer. Thus, the statement that
offers last forever unless expressly revoked isn’t entirely true.

Chapter 1 Offer and Acceptance: Code: CLE 1.1 O (E)

Uploaded by

Copyright:

Available Formats

Chapter 1 Offer and Acceptance: Code: CLE 1.1 O (E)

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Chapter 1 Offer and Acceptance: Code: CLE 1.1 O (E)

Uploaded by

Copyright:

Available Formats

LAW NOTES LIBRARY 1

Code: CLE 1.1 O (E)

Chapter 1 Offer and Acceptance

1. To form a contract, a valid offer and a valid acceptance must be established.

You might also like