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Contract Law Basics for Students

The document discusses the difference between an offer and an invitation to treat in contract law. It provides examples of advertisements, auctions, tenders, and displays of goods as invitations to treat rather than offers, as they invite people to make offers rather than binding the offeror. It also examines relevant case law that established precedents distinguishing offers from invitations to treat, such as advertisements not being considered offers.
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0% found this document useful (0 votes)
62 views43 pages

Contract Law Basics for Students

The document discusses the difference between an offer and an invitation to treat in contract law. It provides examples of advertisements, auctions, tenders, and displays of goods as invitations to treat rather than offers, as they invite people to make offers rather than binding the offeror. It also examines relevant case law that established precedents distinguishing offers from invitations to treat, such as advertisements not being considered offers.
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

INTRODUCTION TO CONTRACT AND

TORT LAW
LSC0144

WEEK 2:
FORMATION OF A VALID CONTRACT
OFFER

Department of Legal Studies


Sem 2 (20/21)
CONTENT:

1. What is an offer?
2. Invitation to Treat
3. Communication of offer
4. Termination of an offer
OFFER
For a contract to exist usually
- one party must have made an offer
- the other party must have accepted
it.

Once acceptance takes effect, a contract


will usually be binding on both parties
and the rules of offer and acceptance
are used to decide whether the parties
are obliged to fulfill their promises.
In order to create a contract, it does not
need to be written. Therefore, a contract
can be made between parties either orally
or in writing.

Legally binding contract means that one


party can sue through the courts, the other
party.

We make countless contracts over the


time. For instance, when we buy
something or even when we have our hair
cut.
The person making an offer is called the OFFEROR, and the person to whom the
offer is made is called the OFFEREE.

A communication will be treated as an offer if


- it indicates the terms on which the offeror is prepared to make a contract,
- and gives clear indication that the offeror intends to be bound by those terms if
they are accepted by the offeree.
Offer may be IMPLIED
from conduct
Offer may be EXPRESS
Taking goods to the
Ann tells Ben that she will
check-out counter in a
sell her CD player for
supermarket, which is an
RM200.
implied offer to buy those
goods.
2. The public at
large
(unilateral
1. A specific contract)
person
(bilateral A student may
Types of An offer can be
made to either
contract) offer to sell her
old textbooks to
Offers to:- Aminah offers
to sell her
anyone in the
junior class or
laptop to the owner of a
Ahmad. lost cat may
offer a reward
to anyone who
finds it.
Bowerman v. Association of British
Carlill v. Carbolic Smoke Ball Co.
Travel Agents Ltd
(1893)
(1996)

“...the advertisement did


constitute an offer to the “...that the ABTA notice
world at large, which constituted an offer which
became a contract when it the customer accepted by
was accepted by Mrs. Carlill contracting with an ABTA
using the smokeball and member”.
getting flu”.
INVITATION TO TREAT
If a person makes any offer to somebody, he
is called an offeror.

If a person accepts the offer, binding contract


comes into exist.

However, an invitation to treat has quite


different meaning.
- It is inviting people into making an offer.
- An advertisement or a promotion, display
of goods, tenders and auctions are the
example of invitation to treat.
Gibson v. Manchester City Council [1979] 1 WLR 294

Facts
The defendant City Council had adopted a policy of selling council houses to its tenants. The claimant was a
tenant of such a council house, who had applied for details of the house he was renting and applicable mortgage
terms, using the printed form designated and supplied by the defendant for this purpose. In February 1971, the
city treasurer responded to this application stating that ‘The [council] may be prepared to sell you the house at
the purchase price…’, and providing details of the mortgage. This letter also stated that it did not amount to a
‘firm offer’ of a mortgage, and invited the claimant to make a formal application using an enclosed form. In
March 1971, the claimant returned the completed form to the defendant. Following local elections in May of the
same year, control of the Council passed from the Conservatives to Labour. The new Labour Council policy was
that council houses would not be sold under the previous Conservative policy unless a legally binding contract
was already in place. The defendant refused to sell to the claimant, who brought an action against them in
breach of contract. This action was successful at first instance and the Court of Appeal, upon which the
defendant appealed to the House of Lords.

Issue
The issue on appeal was whether the defendant’s letter of February 1971 was properly construed as an offer or as
an invitation to treat.

Held
The House of Lords held that there was no concluded contract and the defendant was not legally bound to sell
the property, as the council’s letter did not state the price and was not an offer but an invitation to treat.
It is further stated in this case that :-
“a letter giving the purchase price was
merely one step in the negotiations for
a contract and amounted only to an
invitation to treat. Its purpose was
simply to invite the making of a
“formal application”, amounting to an
offer from the tenant”.
Advertisements

Auction Shopping/Display of
goods in a shop.

Types of
invitations to
treat

Timetables and
Tenders tickets for
transport
1. Advertisement Partridge v Crittenden [1968] 2 All ER 421
Advertise specified goods at a certain
price, such as those found at the back of
Facts
newspapers and magazines. Considered
as invitations to treat, on the grounds The defendant advertised for sale a number of Bramblefinch cocks and hens, stating that the price was
that they may lead to further to be 25 shillings for each. Under the Protection of Birds Act 1954, it was unlawful to offer for sale any
bargaining. wild live bird. The Royal Society for the Prevention of Cruelty to Animals (RSPCA) brought a
prosecution against the defendant under the Act. At his trial, the defendant was found guilty of the
offence by the magistrates; he appealed this conviction.

Issue
The issue on appeal was whether the advertisement was properly construed as an offer of sale (in which
case the defendant was guilty) or an invitation to treat (in which case he had committed no offence). A
further issue was whether it was appropriate to adopt a different interpretation of the phrase ‘offer for
sale’ in the context of criminal law than was accepted in the context of contract law.

Held
The court held that the advertisement was not an offer but an invitation to treat, and as such the
defendant was not guilty. The court also rejected the suggestion that the court should adopt a stricter
interpretation of the phrase ‘offer for sale’ in the criminal context compared to the contractual context,
reasoning that to do so would usurp the legislative function. The legislature had chosen the phrase ‘offer
for sale’ based on its existing understanding, and to alter this understanding under the pretext of
‘interpretation’ was not the proper role of the court.
Grainger & Son v Gough [1896] AC 325 HL

Facts
The defendant wine merchant circulated a catalogue which contained a price list for its products. The
claimant ordered several bottles of wine from the catalogue and, when the defendant refused to deliver
these at the stated price, alleged that a contract had been formed.

Issue
The issue was whether the price list constituted an offer to sell wine at a certain price (in which case the
contract was fully formed, and the claimant had a valid claim), or an invitation to treat (in which case no
contract had been formed).

Held
Rejecting the claim, the House of Lords held that the price list must be construed not as an offer, but as an
invitation to treat. In reaching this conclusion, it reasoned that to interpret the list as an offer would mean
that in theory the defendant would be obliged to deliver an unlimited quantity of wine at the stated price,
upon receipt of an order. This would be unreasonable and would not reflect the intentions of the parties as
the merchant’s stock is necessarily limited, and it would not be possible for him to carry out such an order.
Both reasonableness and objective intention are key to distinguishing between an offer and an invitation to
treat. On this basis, the list was interpreted an invitation to customers to offer to buy wine at the stated
price, which the merchant may then accept or reject. In this case, the defendant was not bound to deliver the
wine ordered by the claimant.
2. Shopping/Display of goods in a shop. Pharmaceutical Society of Great Britain v. Boots Cash Chemist (Southern)Ltd [1952] 2 QB 795
An act of displaying goods in shop
window with the price clearly marked
Facts:
may seem to indicate an offer to sell the
goods at those price. However, such act is According to the UK Pharmacy and Poison Act 1933, there shall be no sale of any poison listed under the
not amount to an offer to sell as a mere act unless it was effected under the supervision of a registered pharmacist. The defendant was a retail
display of goods for sale at marked price pharmaceutical company and had adapted one of it shops to self-service shop. The customer can select
is regarded as an invitation to treat any items displayed on the shelves and took them to the counter, where a registered pharmacist was
authorised, if necessary, to stop the customer from buying any particular items/drugs. The defendant
was charged for selling a listed poison without the supervision of a registered pharmacist. It was alleged
by the plaintiff that the act of displaying the items/drugs constituted as an offer by the defendant to
sell. When the customer selected those items, it indicated as an acceptance to the offer. Hence, the
contract of sale arose at a point that was not under an immediate supervision of the pharmacist who
could not see all part of the shop from the counter.

Issue:
Whether the display of the items/drugs on the shelves was an offer to sell or just merely an invitation to
treat for the customer to make an offer to buy?

Held:
The displayed of the items was only an invitation to treat. The customer made an offer to buy when they
picked up the items from the shelf. There was no contract of sale effected until the offer was accepted by
the registered pharmacist at the counter.
Fisher v Bell [1961] QB 394

Facts
The defendant shopkeeper displayed in his shop window a flick knife accompanied by a price ticket displayed just
behind it. He was charged with offering for sale a flick knife, contrary to s. 1 (1) of the Restriction of Offensive
Weapons Act 1959.

Issue
The issue was whether the display of the knife constituted an offer for sale (in which case the defendant was
guilty) or an invitation to treat (in which case he was not).

Held
The court held that in accordance with the general principles of contract law, the display of the knife was not an
offer of sale but merely an invitation to treat, and as such the defendant had not offered the knife for sale within
the meaning of s1(1) of the Act. Although it was acknowledged that in ordinary language a layman might consider
the knife to be offered for sale, in legal terms its position in the window was inviting customers to offer to buy it.
The statute must be construed in accordance with the legal meaning, as “…any statute must be looked at in light
of the general law of the country, for Parliament must be taken to know the general law” (per Lord Parker C.J. at
para. 4). It is well established in contract law that the display of an item in a shop window is an invitation to
potential customers to treat. The defendant was therefore not guilty of the offence with which he had been
charged.
3. Timetables and tickets for transport.

• The legal position is rather unclear. In recent times the


regulations are found in legislation relevant to the field of
public transport.

• Is the bus timetable an offer to run serServices at those time or


just an invitation to treat?

• Does the bus pulling at a stop constitute an offer to carry tou,


which you accept by boarding the bus?

• These points become important when something goes wrong.


For example, the bus crashes and you injured, your ability to
sue for breach of contract will depend on whether the contract
had actually been completed when the accident occurred.

• There is no single reliable rule in this matter as it seems that the


exact point at which the contract is made depends in each case
on the particular facts.
4. Tenders Spencer v Harding (1870) LR 5 CP 561
An announcement or advertisement
calling for tenders is treated as an
The defendants advertised a sale by tender of the stock in trade belonging Eilbeck & co.
invitation to treat. An offer is then The advertisement specified where the goods could be viewed, the time of opening for
created by the person who submit tenders and that the goods must be paid for in cash. No reserve was stated. The claimant
the tenders where each tenders
submitted the highest tender but the defendant refused to sell to him.
constitute as a separate offer to deal
on its own terms.
Held:

However, a tender may not be Unless the advertisement specifies that the highest tender would be accepted there was no
regarded as an invitation to treat obligation to sell to the person submitting the highest tender. The advert amounted to an
if:- invitation to treat, the tender was an offer, the defendant could choose whether to accept
the offer or not.

1. The parties make it clear that


separate contractual obligations
were intended.
2. Person calling the tenders may
undertake to evaluate
competing bids in a particular
way.
5. Auction Payne v. Cave (1789) 3 TR 148
When the auctioneer call for
bid, it is only regarded as an Fact:
invitation to treat for the buyer
to bid and make an offer to The defendant made the highest bid in an auction. However, before the fall of
buy. The auctioneer is either to the hammer by the auctioneer, the bidder withdrew his bid.
accept or reject the bid on
behalf of the principal. Held:
The bid constituted as an offer which the auctioneer was free to accept or reject.
Since the bid was withdrawn by the defendant before the fall of the hammer,
there was no contract between the parties.
COMMUNICATION OF OFFER
An offer cannot be accepted unless the person aware of its The communication of the offer is
existence and terms. Therefore offer can only become considered as complete when it come to
effective once it is communicated. the knowledge of the person to whom it
is made.

Evan Clarke tried to claim the reward of £1000 for giving


information that led to the conviction of a murderer, Treffene, of
two policemen called Walsh and Pitman, under the Crown Suits
Act 1898.
A proclamation stated there would be such a reward, which he had
R v. Clarke (1927) 40 seen in May. However, Clarke gave the information in June while he
CLR 227 was on trial himself as an accessory for murder. He had originally
covered for the murderer, but then had changed his mind and given
information.
The evidence was reported to be that he gave information to clear
himself and not necessarily for the reward. He told the police
"exclusively in order to clear himself". It was uncertain whether he
was thinking about the reward at the time he provided the
information.
TERMINATION OF OFFER
1. Rejection ▪ An offer terminates upon rejection by the offeree. Once it is rejected, the
offeree cannot later reconsider and accept the offer.
▪ If Lim offers to sell his car to Raju on Tuesday, and Raju says no, Raju
cannot come back on Wednesday and insist on accepting the offer.
▪ Rejection of an offer by the offeree need to be communicated to the
offeror before it becomes effective.
▪ Thus, when the rejection has not come to the offerror’s attention, the
offeree who wish to change his mind, may not be able to retrieve the
situation.
A counter offer happens when the
offeree wish to deal on the terms
Counter offer is not an acceptance
slightly different from the original
2. Counter Offer offer put by the offeror, although
because the terms in the original
offer are not all accepted.
still in respect of the same subject
matter.

A counter offer will terminate the


original offer. Therefore, if the It amount to the rejection of the
A counter offer act as a rejection to
counter offer is rejected, the initial original offer and a substitution of a
the original offer.
offeree cannot turn around and new offer for it.
accept the original offer.

However, it should be noted that a For example, Siti offers to sell 100
mere request for information is not copies of books to Soto for RM500.
Simply said, counter offer is the
a counter offer. If the offeree asks Soto asked whether the price
offeree’s adding of terms whereas a
the offeror for more information, includes delivery charge or not. The
mere request for information is a
the original offer still stands as the question put forward by Soto would
question about the original offer.
offeree has yet to accept or reject be classed as a mere request for
the offer. information, not a counter offer.
Thus, if A respond to an offer by putting
forward an alternative proposal. It will
likely be regarded as a counter offer, the
effect of which will be to terminate the
original offer.
The defendant, Mr Wrench, offered to sell the farm he owned
to the complainant, Mr Hyde. He offered to sell the property
for £1,200, but this was declined by Mr Hyde. The defendant
decided to write to the complainant with another offer; this
time to sell the farm to him for £1,000. He made it clear that
Hyde v Wrench (1840) 49 ER 132 this would be his final offer regarding the property. In
response, Mr Hyde offered £950 for the farm in his letter. This
was refused by Mr Wrench and he confirmed this with the
complainant. Mr Hyde then agreed to buy the farm for
£1,000, which was the sum that had previously been
offered. However, Mr Wrench refused to sell his farm.

The court dismissed the claims and held that there was no
The complainant brought an action for specific performance,
binding contract for the farm between Mr Hyde and Mr
claiming that as Mr Wrench refused to sell the farm, this was a
Wrench. It was stated that when a counter offer is made, this
breach of contract. The issue in this case was whether there
supersedes and destroys the original offer. This original offer is
was a valid contract between the parties and if a counter offer
no longer available or on the table. In this case, when Mr Hyde
was made in discussions, whether the original offer would still
offered £950, he cancelled the £1,000 offer and could not back
remain open.
track and accept.
HOWEVER, A "mere inquiry"
not a counter-offer (request
for information)
A request for information
about an offer does not
amount to a counter offer, so
the original offer remains
open.
The court held the complainant was only inquiring
for more information about whether the terms of the
offer could be changed; there was no specific
wording to indicate that it was a counter offer or
rejection. This was in contrast to Hyde v Wrench. This
Stevenson Jaques & Co. v McLean meant that the offer made by the defendant was
(1880) 5 QBD 346 still valid and the second telegram by the complaint
formed a binding contract. While the promise of the
offer remaining open until Monday was not itself
binding and an offeror can revoke this at any time,
there had been no revocation communicated to the
complainant in this case.

The defendant, Mclean, offered to sell iron to the


complainant, Stevenson Jaques & Co. This was for the
price of 40s and the offer would remain open until
Monday. The complainant sent a telegram to the The complainant sued the defendant for non-
defendant, asking whether he would accept a delivery of the iron and that this was a breach of
payment of 40 over a two-month period, or what his contract. The issue in the case was whether there was
longest limit would be for payment. McLean did not binding contract between the parties and whether
respond to this telegram. The defendant sold the the telegram sent by the complainant was an
iron to another party, but did not inform the inquiry for information or a counter offer.
complainant of this action. On Monday morning, the
complaint sent a telegram to accept the offer,
unware it had been sold.
▪ Where an offeror states that an offer may remain open for a
3. Specified specific length of time, it lapses when that time is up.
time/Lapse of time
▪ An offer will not remain open indefinitely. It will come to an end at
the lapse of time specified in the offer or at the end of a reasonable
time if no time is specified.

▪ In deciding what amount to “reasonable length of time”, the court


will consider two important factor namely the nature of the subject
matter in the contract and the means used to communicate the
offer. (the more urgent means used, the more reasonable it would
be to presume that a rapid reply is required).

▪ Thus, what appear to be a reasonable time will differ from one case
to another depending on what court think fair base on the fact
presented before it. What is a reasonable time will depend upon
the nature of the transaction and the circumstances as a whole.
The defendant, Mr Dodds, wrote to the complainant, Mr
Dickinson, with an offer to sell his house to him for £800.
He promised that he would keep this offer open to him
until Friday. However, on the Thursday Mr Dodds
accepted an offer from a third party and sold his house to
them. It was claimed that Mr Dickinson was going to
Dickinson v Dodds accept this offer, but had not said anything to Mr Dodds
because he understood that he had until Friday. Mr
(1875) 2 Ch D 463 Dodds communicated that the offer had been withdrawn
through a friend to the complainant. After hearing this,
Mr Dickinson went to find the defendant, explaining his
acceptance of the offer. The complainant brought an
action for specific performance and breach of contract
against the defendant.

The court held that the statement made by Mr Dodds was


nothing more than a promise; there was no binding
contract formed. He had communicated an offer for
buying his house to the complainant and this offer can be
The issue in this case was whether the defendant’s promise revoked any time before there is acceptance. There was
to keep the offer open until Friday morning was a no deposit to change this situation. Thus, as there was no
binding contract between the parties and if he was obligation to keep the offer open, there could be no
allowed to revoke this offer and sell to a third party. ‘meeting of the minds’ between the parties. In addition,
the court stated that a communication by a friend or
other party that an offer had been withdrawn was valid
and would be treated as if it came from the person
themselves.
The court held that the Ramsgate Victoria Hotel’s action
for specific performance was unsuccessful. The offer that
the defendant had made back in June was no longer
valid to form a contract. A reasonable period of time had
passed and the offer had lapsed. The court stated that
Ramsgate Victoria Hotel v Montefiore (1866) LR 1 Ex 109 what would be classed as reasonable time for an offer to
lapse would depend on the subject matter. In this case, it
was decided that six months was the reasonable time
before automatic expiration of the offer for shares. Yet,
for other property, this would be decided by the court in
the individual cases.

The defendant, Mr Montefiore, wanted to purchase


shares in the complainant’s hotel. He put in his offer to
the complainant and paid a deposit to his bank account
The complainant brought an action for specific
to buy them in June. This was for a certain price. He did
performance of the contract against the defendant. The
not hear anything until six months later, when the offer
issue was whether there was a contract between the
was accepted and he received a letter of acceptance from
parties after the acceptance of the original offer six
the complainant. By this time, the value of shares had
months after it was made.
dropped and the defendant was no longer interested. Mr
Montefiore had not withdrawn his offer, but he did not
go through with the sale.
4. Failure of a precondition Financings Ltd v Stimson [1962] 3 All ER 386
▪ Some offers are made
subject to conditions, and Many people, when they buy a car from a car dealer, do not realize that they
if such conditions are not are in fact buying the car from the finance company who will pay the dealer the
in place, the offer may price of the car, and then recoup the payments from the purchaser. Here, the
lapse. defendant signed a form, "offering to buy" a car on hire-purchase from the
finance company. Before the company had accepted the offer, the car had been
▪ An acceptance to an offer
stolen and damaged. Not knowing of this the finance company then accepted
is impossible if the the written offer which had been sent to them. Defendant refused to pay the
condition precedent to charges and the Co sued him for breach of the hire purchase agreement. It was
the offer has not been held that D's offer was subject to an implied condition that the car should
fulfilled. continue in its undamaged state and that on the failure of that condition, the
offer lapsed.
▪ For example, a landlord
offer to renew the rental
agreement for another
year if the tenant pay the
monthly rent on time.
5. Death of a party
It is said that the death of the offeror will bring the offer to an end. However, the effect of the death of the offeree
or offeror on an offer is a matter of the apparent intention of the parties

Death on the offeror Death on the offeree

If the offeree dies before any acceptance is made, then there is no


An offer will lapsed if the offeree had the knowledge of the
offer at all. The offer ceases to be an offer that is capable of
offeror’s death.
acceptance.

If the offeree is not aware of the offeror’s death, a valid contract


can still possibly be formed.

For instance, Rozi promises to sell her car to Rizal. However, she
dies soon after the offer was made. Rizal accept the offer not
knowing that Rozi is dead. In this situation, it seems that the
executor of Rozi’s affairs would be obliged to sell the car to Rizal.

However, if the offer require personal performance by the


deceased (such as being an actor in a film) it will automatically
lapse upon the offeror’s death. This is because performance by the
deceased is impossible and the law will not compel impossibility.
Carter v Hyde (1923)

If there is a personal element in the proposal,


even if a contract could still be performed, it
is likely that the inference would be that it is
only capable of acceptance if the parties are
still alive (or were in some circumstances to
remain in good health). On the other hand,
an option for the purchase of property in
which there is no personal element would be
exercisable irrespective of the death of one of
the parties.
The court found in favour of Bradbury.
Bradbury v Morgan [1862] 158 The court held that if the situation was
ER 877 dealing with an implied contract which
had arisen out of a request, then it
would be stopped by the death of a
party. However, in this circumstance,
there was no notice provided of the
death of Leigh, and therefore there was
no attempt to end the contract.

Leigh requested that Bradbury provide credit to his brother to the


value of £100. Leigh guaranteed the account owned by his brother
to this effect. Accordingly, Bradbury credited Leigh’s brother’s In this case, the court had to decide
account and continued selling goods to Leigh in their usual whether the agreement between the
manner. Unfortunately, Leigh died and Bradbury continued to parties was a contract or simply a
supply his brother with goods on the credit which had been request which could be concluded upon
previously agreed. Bradbury had no knowledge or notice of the the death of Leigh. If it was deemed that
death of Leigh. Morgan, who was an executor on behalf of Leigh, this was a contract, then the court would
did not pay Bradbury for the goods and refused to do so on the have to understand whether Morgan, as
basis that the debts were contracted after Leigh’s death and as a an executor of Leigh, was still liable to
result, Leigh was not liable for the payment. Bradbury brought an pay for the goods that were being
action for the payment that was due for the goods. received.
6. Revocation / Withdrawal of an offer

An offer is officially revoked when the offeror


withdraw the offer. It is settled that once the offer
has been revoked, no acceptance can be made.

However, the revocation may only become


effective once it is communicated to the offeree. It
is the basic requirement that a revocation
requires communication to the offeree of the fact
that the offer is no longer open.

Under the postal rule, although an acceptance is


effective upon posting - a revocation is only
effective UPON RECEIPT.
Byrne v Leon Van
Payne v. Cave (1789) Tienhoven (1880)
withdrawal of offer withdrawal must be
communicated
• Established the principle • The court took the view
that an offer may be that a revocation is not
withdrawn at any time effective prior to its
up until it is accepted. communication, and that
the posting of a letter of
revocation does not
constitute
communication of it.
The defendant
contacted the
claimant in writing,
offering to purchase
the lease of the The court held that the
claimant’s home. The original letter did not
offer stated that it bind the defendant to
would remain open to keep the offer open for
The issue was whether
the claimant for a a full six weeks, and as
the defendant was
period of six weeks. such it had been
contractually bound
However, during this validly withdrawn by
by his original letter to
period, before the the defendant, and
keep the offer open for
Routledge v Grant claimant had the claimant’s
six weeks, and by
[1828] 4 Bing 653 accepted, the purported acceptance
extension whether he
defendant changed his was ineffective. The
was therefore bound
mind about the underlying reason for
by the claimant’s
purchase and wrote to this was that it is a
acceptance within that
the claimant once fundamental principle
period.
again purporting to of contract law that
withdraw the offer. one party cannot be
After receiving this bound whilst the other
second letter, still is not.
within six weeks from
the first, the claimant
accepted the
defendant’s offer.
Byrne & Co v Leon Van Tien Hoven & Co [1880] 5 CPD
344

1. The defendants wrote a letter, on October 1, to the plaintiffs


3. The court held that the withdrawal of the offer was ineffective offering the sale of 1000 boxes of tin plates. The defendant was
as a contract had been constructed between the parties on based in Cardiff and the plaintiff was based in New York, and
October 11 when the plaintiffs accepted the offer in the letter letters took around 10-11 days to be delivered. The plaintiffs
dated October 1. On this basis, it was held that an offer for the received this letter on October 11 and accepted it on the same
sale of goods cannot be withdrawn by simply posting a day by telegram, as well as by letter on October 15. However,
secondary letter which does not arrive until after the first letter on October 8, the defendant sent a letter to the plaintiffs which
had been responded to and accepted. The court gave judgment withdrew their offer and this arrived with the plaintiff on
for the plaintiff and awarded that the defendant paid their October 20. The plaintiffs claimed for damages for the non-
costs. delivery of the tin plates.

2. The court was required to establish whether the withdrawal of the


offer for the sale of goods was acceptable. The court would have to
consider whether the contract had been agreed by the acceptance by
the plaintiffs of the letter of October 1, or whether the defendants
had successfully withdrawn their offer by issuing the withdrawal by
letter on October 8.

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