An Offer Is a Definite Promise or Proposal

An offer will be lapse if it is not accepted within the stipulated time. If A offers to sell a car to the B and ask the B to reply on or before a specific date, but B fails to do so, the offer will be terminated.

In some situation, no time is stipulated. In Ramsgate Victoria Hotel Co v. Montefiore (1866) LR 1 Ex 109. The defendant offered to buy the plaintiff’s shares and paid a deposit on 8 June to the plaintiff’s bank account, the defendant received the acceptance letter by the plaintiff on 23 November stating that the shares had allotted to him and ask for paying the balance owing on the shares. The defendant refused to pay and the plaintiff sued of beaching of contract.

The court held the offer to purchase shares had not been accepted within a reasonable time and the offer had therefore lapsed. Thus, there was no contract.

A lapse of reasonable time will be considered if there is no time stipulated, depending on the subject matter, the means of communication and other circumstances. In the above case, five months were not considered as a reasonable time.

Death of party

In the situation that the offeree accepts the offer with unaware of the offeror’s death and the deceased’s contractual obligation can be performed by his or her personal representative, the valid contract formed.

In Fong v Cili (1968) 11FLR 495, the vendor and one of two joint purchasers of a parchel of land signed the contract of sale, however, before the other joint purchaser signed the contract, the vendor died. The purchaser was aware of the death of the vendor, before signing the contract.

The court held as the purchaser was aware of the death of the vendor, the contract already lapse and cannot be accepted.

For the death of the offeree, in the Carter v Hyde (1923) 33CLR 115, plaintiff offered to sell a premise to Hyde and open the offer for three months. Afterwards, Hyde died and within the three months, Hyde’s executors accept the offer. Plaintiff argued that the offer is lapsed as Hyde’s executors do not have the right to accept the offer.

The court held plaintiff failed, as the option was not intended to be that was personal to Hyde, the acceptance could be exercised by his executors. plaintiff was bound to sell.

Rejection of offer

One form of rejection is the offeree communicates rejection to the offeror. If A offers to sell a car to B, then B writes to A stating that not interested in buying the car. There is no contract arise.

The other form of rejection called counter-offer. A counter offer is new terms proposed by the offeree. In Hyde v Wrench (1840) 3 Beav 334, defendant offered to sell his farm to plaintiff for £1200, plaintiff declined the offer. Later on, defendant make a new offer to plaintiff to sell the farm for £1000, but plaintiff offered £950 to buy the farm, after the rejection of the offer by defendant on 27 June, plaintiff informed defendant that agreed to buy the farm for £1000. defendant refused to sell the farm and plaintiff sued for breach of contract.

The court held the contract is not valid as the counter-offer already taken as a rejection of the original offer, the defendant is not bounded to sell the farm.

Request for further information is not treated as a counter-offer. In Stevenson Jacques v. Maclean (1880) 5 QBD 346, the defendant offered to sell the iron to the plaintiff and the offer open till Monday. Before the deadline, the plaintiff make enquired whether the iron could pay within two months but not immediately. The defendant didn’t reply and sold the iron to another person. Afterwards, the plaintiff accepted the offer before the deadline but the defendant refused to sell the iron.

The court held the plaintiff action is just a request for further information but not a rejection of offer. Thus, the defendant was bounded to sell iron to the plaintiff.

Revocation of offer

The offeror can revoke the offer any time before the offer being accepted. However, there is exception if the offeror receive consideration for the promise to keep the offer open, the offer cannot be revoked until the deadline. For example, if A offer to sold B a house for 1,000,000 and B pays that amount to A requesting to wait for the decision until next Monday. As A is under a contractual obligation to keep the offer open. Thus, A can treated as a breach of contract if he sold the house to another person within the promised time.

Besides, the requirement of communicating the revocation is. In Dickinson v Dodds (1876) 2 Ch D 463, defendant offer to sell a house to the plaintiff and open the offer until 9 am on 12 June. Before the end of the deadline, the defendant sold the house to the third party and informed the plaintiff by another person. Afterwards, the plaintiff gave a letter of acceptance to defendant before 9am on 12 June.

In this case, the contract is not valid as the offer had revoked with communication to the plaintiff before the acceptance and there is no any contractual obligation.

Conditional offer

An offer may be subjected to a condition that will terminate on the happening of a particular event. In Financings Ltd v Stimson [1962] 3 All ER 386, the defendant signed an “offer to buy” a car on hire-purchase terms from the plaintiff. The defendant signed a form stating the agreement would bind only after signed by the plaintiff. After the defendant paid the first installment and took it away. The car was returned to the dealer and cancelled the insurance due to its poor performance. The car was stolen from dealer and damaged. Not knowing this, the plaintiffs signed the form. The defendant refused to pay the charge and sued by plaintiff for failure to pay the installments.

The court held the defendant’s offer was subject to an implied condition that the car should continue in its undamaged state. The offer lapsed because of failure of that condition.

Acceptance

After the offer is accepted by the offeree, there is a completion of the contact and bring the offer to the end. For example, B sends a formal letter of acceptance to A’ offer before the deadline, a valid contract form and the offer become ended.

In conclusion, the reasons mentioned are just the general rules of terminating an offer. However, there are some circumstances or factors that will affect the application of the general rules. It is necessary to put attention to those exceptions in order to make comprehensive judgments.