(b) There are a number of ways in which an offer can come to an end and, as a result, no longer be open to acceptance. These are as follows:
(i) Rejection of offers
Express rejection of an offer has the effect of terminating the offer. Once rejected the offeree cannot subsequently retract and accept the original offer. A counter-offer, where the offeree tries to change the terms of the offer, has the same effect (Hyde v Wrench (1840)).
A counter-offer must not be confused with a request for information. Such a request does not end the offer, which can still be accepted after the new information has been elicited (Stevenson v McLean (1880)).
(ii) Revocation of offers
Revocation, the technical term for cancellation, occurs when the offeror withdraws their offer. There are a number of points that have to be borne in mind in relation to revocation, as follows:
– An offer may be revoked at any time before acceptance
Once revoked, it is no longer open to the offeree to accept the original offer (Routledge v Grant (1828)). The corollary of this point is, of course, that once the offer is accepted it cannot subsequently be withdrawn.
– Revocation is not effective until it is actually received by the offeree
This means that the offeror must make sure that the offeree is made aware of the withdrawal of the offer; otherwise it might still be open to the offeree to accept the offer. This applies equally when the offeror uses the post to withdraw the offer, as the postal rule does not apply in relation to the withdrawal of offers (Byrne v Van Tienhoven (1880)).
– Communication of revocation may be made through a reliable third party
Where the offeree finds out about the withdrawal of the offer from a reliable third party, the revocation is effective and the offeree can no longer seek to accept the original offer (Dickinson v Dodds (1876)).
– A promise to keep an offer open is only binding where there is a separate contract to that effect
This is known as an option contract, and the offeree/promisee must provide consideration for the promise to keep the offer open. If the offeree does not provide any consideration for the offer to be kept open, then the original offeror is at liberty to withdraw the offer at any time (Routledge v Grant above).
– In relation to unilateral contracts, revocation is not permissible once the offeree has started performing the task requested
A unilateral contract is one where one party promises something in return for some action on the part of another party. Rewards for finding lost property are examples of such unilateral promises. There is no compulsion placed on the party undertaking the action, but it would be unfair if the promisor were entitled to revoke their offer just before the offeree was about to complete their part of the contract (Errington v Errington and Woods (1952)).
(iii) Lapse of offers
Offers lapse and are no longer capable of acceptance in the following circumstances:
– At the end of a stated period
It is possible for the parties to agree, or for the offeror to set, a time limit within which acceptance has to take place.
If the offeree has not accepted the offer within that period, the offer lapses and can no longer be accepted.
– After a reasonable time
Where no time limit is set, then an offer will lapse after the passage of a reasonable time. What amounts to a reasonable time is, of course, dependent upon the particular circumstances of each case.
– Where the offeree dies
This automatically brings the offer to a close.
– Where the offeror dies and the contract was one of a personal nature
In such circumstances, the offer automatically comes to an end, but the outcome is less certain in relation to contracts that are not of a personal nature (Bradbury v Morgan (1862)). |
