Revocation of Offer CASES
In English law, revocation of offer refers to the withdrawal of an offer by the offeror before it has been accepted, preventing contract formation.
Definition and Principles
An offer can generally be revoked at any time before acceptance, but this revocation must be clearly communicated to the offeree. Revocation only takes effect once the offeree actually receives and understands it. Merely posting a withdrawal is insufficient; the offer remains open until properly communicated.
Requirements for Valid Revocation
- Communication: Revocation must be directly or indirectly communicated and effectively understood by the offeree.
- Timing: Must occur before acceptance has taken place.
- Reliability: The offeree must reasonably understand that the offer has been withdrawn.
Case Example: Byrne & Co v Leon Van Tienhoven & Co (1880)
Van Tienhoven sent an offer by post from Cardiff to New York. Before Byrne received it, he posted an acceptance. Meanwhile, Van Tienhoven had posted a withdrawal. The withdrawal arrived after Byrne’s acceptance. The court held that a contract formed upon Byrne’s acceptance because the revocation was not effectively communicated beforehand.
Exceptions
- Firm Offers: Offers made irrevocable for a specified time.
- Option Contracts: Offers kept open through separate consideration.
Practical Importance
Clear rules on revocation provide commercial certainty and fairness, enabling parties to manage contractual risks effectively. Always use clear, direct, and prompt communication for revocations to avoid uncertainty.
Practical Takeaways
- Ensure revocations are clearly communicated and effectively received—preferably through instantaneous or direct methods.
- Avoid assuming an offer has been withdrawn merely because a revocation was posted.
- Consider specifying methods of communication or timing clearly in contracts to prevent confusion.
Home » Revocation of Offer
A seller offered iron for sale. The potential buyer replied with an inquiry about payment terms. The seller sold to a third party, but the original buyer then accepted the offer. The court held the inquiry was a request for information, not a counter-offer, so a binding contract existed. Facts The defendant, McLean, offered to sell warrants for iron to the plaintiffs, Stevenson, Jaques & Co., for ’40s. per ton, net cash,’ specifying the offer was open ’till Monday.’ On Monday morning, the plaintiffs sent a telegram to the defendant asking: ‘Please wire whether you would accept forty for delivery
An offer to sell property was made in person. The buyer, who lived in another town, accepted by post. Before the acceptance arrived, the seller posted a revocation. The court held a binding contract was formed when the acceptance was posted. Facts On 7 July 1891, the defendants gave the claimant, Mr Henthorn, a note offering him the option to purchase certain houses for £750, with the offer to remain open for fourteen days. The claimant resided in Birkenhead, while the offer was made at the defendants’ office in Liverpool. The next day, 8 July, the defendants posted a letter
A customer signed a hire-purchase offer for a car, but returned it to the dealer before the finance company accepted. The car was then stolen and damaged. The court held no contract existed as the offer was revoked or, alternatively, was subject to an implied condition that the car remain in the same state. Facts On 16th March 1961, the defendant, Mr Stimson, wished to acquire a car on hire-purchase terms. He saw the car at the premises of a dealer, Stanmore Motor Co. He signed a hire-purchase agreement form provided by the dealer. This form, which was an agreement
A father promised his son and daughter-in-law a house if they paid the mortgage. After his death, his personal representatives sought to evict her. The court found a unilateral contract, holding the father's promise was irrevocable as long as performance continued. Facts In 1936, a father bought a house in Newcastle-upon-Tyne for his son and daughter-in-law to live in. The house was put in the father’s name. He paid £250 of the £750 purchase price in cash and borrowed the remaining £500 from a building society, secured by a mortgage on the property. The father told his daughter-in-law that the
Dodds offered to sell property to Dickinson, with the offer open until Friday. Before accepting, Dickinson learned from a third party that Dodds had sold to another. The court held this indirect communication was a valid revocation of the original offer. Facts On Wednesday, 10th June 1874, the Defendant, John Dodds, signed and delivered to the Plaintiff, George Dickinson, a memorandum offering to sell a property for £800. The offer included a postscript stating: “This offer to be left over until Friday, 9 o’clock, a.m. J.D. (the 12th of June).” On Thursday afternoon, the Plaintiff was informed by a third
A property seller offered to exchange contracts if the buyer attended with a signed contract and deposit cheque. The buyer complied, but the seller refused to proceed. The court held a binding unilateral contract existed, which the seller breached by revoking their offer. Facts The plaintiffs, Dahlia Ltd, negotiated to purchase properties from the first defendants, Four Millbank Nominees Ltd. The essential terms were agreed. The defendants’ solicitors wrote to the plaintiffs’ solicitors stating they were instructed to proceed. Crucially, the defendants’ representative orally informed the plaintiffs that if they attended the defendants’ office with a counterpart contract signed by
Defendants offered to sell goods by post, then posted a letter revoking the offer. Before receiving the revocation, the claimants accepted by telegram. The court held the revocation was only effective upon receipt, by which time a binding contract had formed. Facts The defendants, Leon Van Tienhoven & Co., were based in Cardiff. On 1 October, they posted a letter to the plaintiffs, Byrne & Co. in New York, offering to sell 1000 boxes of tinplates. On 8 October, the defendants posted a second letter revoking their offer. On 11 October, the plaintiffs received the initial offer letter and immediately
