How Is an Offer Terminated? Please Provide Examples and Case Law in Order to Support Your Answer.

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  • Topic: Contract, Offer and acceptance, Option contract
  • Pages : 4 (1221 words )
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  • Published : November 17, 2011
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The offer fails to exist when the conditions are not favoured, which will be listed in the following.

Lapse of time
An offer will lapse and invalid at the specified time stated in the offer, or for the offer has no time stipulated ,at the end of a reasonable time which depends on the subject matter, means of communication and other circumstances. In Ramsgate v Montefiore(1866),Montefiore applied for shares in the hotel company. He had not received any news before he received a letter of acceptance after 5 months. By the time he refused to accept the shares, the hotel claimed him for a bleach of contract. The court held that the offer to buy the shares had lapsed because of unreasonable delay in accepting.

An offer can be revoked at any time before its acceptance. Which means even the offer is promised to be opened, the offeror is able to revoke the offer before the offeree accept the offer unless the offeror receives consideration. For example, A offers B to sell a car on 1 January. B pays 10% deposit and requests A wait for his decision until 20 January. Meanwhile A sells the car to others and hence A had no car selling to B. As B had paid a deposit (a consideration) until 20 January so A breached the contractual obligation and B is able to sue A for bleach of contract and claim damages. Meanwhile, revocation will not be effective unless it is communicated to the offeree in direct or implied way, for example, by offeror’s agent or other offeree acknowledged and reliable source. In Dickinson v Dodds (1876), Dodds agreed to sell a specified area of land to Dickinson on 10 June with 12 June 9am as the deadline. On 11 June 7:30 p.m, Dickinson and the agent were informed by Dodds that Dodds had already offered to sell the land to others. Dickinson wrote a note accepting the offer and delivered it to Dodds’ relative. Dodds had already sold the land to another party the previous day. The court held that as Dickinson knew that Dodds’ offer was...
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