TERMINATION OF OFFER

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					TERMINATION OF OFFER

Only unconditional acceptance will result in a contract.
Termination can occur in the following ways:
a) Acceptance
b) Refusal
c) Counter Offer
d) Lapse of time
e) Death
f) Revocation
g) Failure of a precondition

a) Acceptance
This will normally mean the offer is no longer available
to anyone else as the stock may be exhausted e.g. if
there is a bike for sale

b) Refusal
An offeree may refuse the offer and therefore cannot
accept later HYDE v WRENCH (1840)

c) Counter offer
If the offeree replies changing the terms or negotiating,
this is not an acceptance, but a counter offer which
destroys the original offer and creates a new one which
the original offeror has the right to accept or reject.
E.g. If Jack offers to sell his bike to Jill for £70 and Jill
says she will buy it for £68, Jack can refuse and Jill has
no right to insist that Jack reverts back to his earlier
offer.
HYDE v WRENCH (1840)
This contrasts with the case of BROGDEN v
METROPOLITAN RAIL CO (1877) where both parties
acted as though a valid contract existed and behaved
accordingly.

The following more recent case shows an interesting
variation of a typical counter-offer situation
PICKFORDS v CELESTICA (2003)

Battle of the Forms-This is an extension of the counter
offer scenario and occurs when both parties have their
own “standard form” stationery and it has to be
established on whose terms the final contract operates
BUTLER MACHINE TOOL CO v EX CELL O CORP LTD
(1979)

Request for further information-This needs to be
distinguished from a counter offer because it does not
terminate the original offer and it leaves the original
offer open until withdrawn by the offeror
STEVENSON v McLEAN (1880)

A counter offer must be definite enough to accept (as
an original offer is) and it must incorporate a change of
terms.

d) Lapse of time
An offer may lapse due to the passage of time. This can
occur when
i.   It is stated in the offer that it is open for a specific
     time e.g. “You have until Friday to let me know
     your decision”. If acceptance, refusal or
      revocation do not take place before Friday then the
      offer will lapse on that day.
ii.   If there is no specific time given “reasonable time”
      will be assessed by the courts. This will depend on
      the individual circumstances and the type of goods
      concerned
      RAMSGATE VICTORIA HOTEL v MONTEFIORE
      (1866)

e) Death
If the contract is a personal service or artistic
performance with a particular individual involved, it
comes to an end if that person dies.

If it is not an offer of a personal nature it may continue
BRADBURY v MORGAN (1862)

f) Revocation
An offer can be revoked/withdrawn at any time before
acceptance. The offeror must tell the offeree as soon
as the withdrawal has taken place.
BYRNE v VAN TIENHOVEN (1880)

CONFETTI RECORDS v WARNER MUSIC UK (2003)

Revocation via a third party
Revocation does not have to come from the offeror
himself
DICKINSON v DODDS (1876)

It has been suggested that this principle only applies if
it is a reliable third party. Also a time limit can be
overridden if revocation is communicated to the
offeree.

Revocation in unilateral contracts – Revocation to an
offer made “to the world” can occur if it is made in the
same way as the offer
SHUEY v US (1875)
The offer in CARLILL could have been withdrawn in the
same way.

Revocation of an ongoing act of acceptance – Problems
occur when withdrawal occurs when someone is in the
process of accepting
ERRINGTON v ERRINGTON (1952)

g) Failure of a pre condition
If a main term of an offer is unfulfilled or substantially
altered, then the offer is no longer capable of
acceptance
FINANCINGS LTD v STIMSON (1962)
TERMINATION – CASES

HYDE v WRENCH (1840)
An offer was made to sell at £1000, the buyer refused
but offered £950. The seller rejected this. The buyer
then offered the original £1000 and the seller rejected.
IT was held that the buyer could not insist on buying at
the original £1000 as the offer had been destroyed by
his counter offer.

PICKFORDS v CELESTICA (2003)
An offer was made to carry out work using lorries, the
price quoted being £890 per lorry used. Then a second
offer was made as a total price of £98,760 for the whole
work, regardless of the number of lorries. The second
offer was seen by the court as canceling the first one,
in a similar way to counter offer, and eventually the
carrying out of the work was held to amount to
acceptance.

BUTLER MACHINE TOOL CO v EX CELL O CORP LTD
(1979)
The buyer and seller had quite different standard terms.
Lord Denning said that the court should look at the
“whole picture” and exactly what terms have been
agreed in order to establish the actual contractual
terms.

RAMSGATE VICTORIA HOTEL v MONTEFIORE (1866)
An offer to buy shares was made in June and an
attempt to accept was made in November.
It was held that after five months the offer had lapsed.
It depends on the commodity as to the time span
allowed e.g. perishable goods will be treated differently
than non-perishable goods.

BYRNE v VAN TIENHOVEN (1880)
The def (Cardiff) wrote to the pl (NY) offering goods for
sale. When the pl received the offer, he telegraphed
acceptance but three days later the def sent a letter
withdrawing the offer. This did not arrive until AFTER
the acceptance form the pl was confirmed by post.
It was held that there was a binding contract on
acceptance. Revocation was communicated after
acceptance.

CONFETTI RECORDS v WARNER MUSIC UK (2003)
The recording company, Warner, produced an album
from music sent to them by Confetti. It was held too
late for Confetti to revoke their offer.

DICKINSON v DODDS (1876)
Dodds offered to sell a house to Dickinson. He had until
Friday to decide. On Thursday, Dickinson heard from a
third party that Dodds had agreed to sell to someone
else and so decided to deliver a letter of acceptance
from himself.
It was held, Dickinson knew as if it were first hand that
Dodds intended to sell to someone else and therefore
could not accept the offer.
SHUEY v US (1875)
The pl apprehended a “wanted” criminal and went to
claim the reward (which had since been revoked in the
same manner in which the offer had been made).
It was held that the individual was not entitled as the
same notoriety had been given to the revocation as the
original offer.

ERRINGTON v ERRINGTON (1952)
A father bought a house on mortgage and promised that
if his son and daughter-in-law paid all the mortgage
installments, the house would be theirs. The couple
paid all the installments but when the father died, his
widow tried to claim the house.
The court held that once the couple had completed
paying the installments, the house was theirs and in
this case acceptance was an ongoing act.

FINANCINGS LTD v STIMSON (1962)
Between the defs offer to buy a car and the pls
acceptance, the car was stolen and badly damaged.
The pl did not know and signed an agreement.
It was held that this was not an acceptance since the
precondition that the car was in a certain state had
failed, therefore there was no valid contract.

				
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