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from a counter offer because it does not terminate the original offer and it leaves the original offer open until withdrawn by the offeror STEVENSON v McLEAN (1880) A counter offer must be definite enough to accept (as an original offer is) and it must incorporate a change of terms.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.