Offord v Davies - 1862

Offord v Davies (1862) 12 CBNS

Contract law – Formation of contract – Offer and acceptance

Facts

The defendant, in this case, agreed to secure money to advance to a third party on discount for the space of twelve calendar months. The defendant subsequently broke their promise and did not pay the plaintiff the sums of money that were required by the agreement. The plaintiff became liable to pay the bills of exchange, not paid for by the defendant, and this caused the plaintiff to lose the money that would have been earned had the bills been paid at the correct time. The defendants claimed that they had withdrawn their guarantee for the money before the first payment and therefore were not required to advance the money. The plaintiff argued that the defendant could not withdraw the offer and that they had not accepted the defendant’s withdrawal.

Issue

The court was required to establish whether the defendant had successfully withdrawn their offer to secure the money and importantly, whether this withdrawal had been accepted by the plaintiff. A key issue, in this case, was whether the plaintiff had relied on the agreement between the parties. If they had, the defendant would not have been able to withdraw their offer.

Decision/Outcome

The court held that this offer could be withdrawn within the specified time period, which in this case was twelve months unless the agreement had been acted upon. The court also held that the withdrawal of such an offer should be communicated effectively, otherwise this would not be valid and the opposing party would still be capable of accepting the offer.