Revocation of Offer

Revocation of Offer

The term "revocation of offer" refers to the process whereby one party to another withdraws or cancels an offer that was made by that party. An offer is deemed to be valid under the law of contracts until it is either accepted or revoked by the other party.

Dickinson v Dodds

An offeror has the right to cancel an offer at any time prior to it being accepted, as shown in Dickinson v Dodds (1876) where the court ruled that a communication on the withdrawal of an offer that was made by a third party, such as a friend or another party, was legal and would be handled as if it had originated from the individual themselves.

Byrne v. van Tienhoven

The general rule is offers, or counteroffers, can be revoked at any point until the time of acceptance. As stated in Byrne v van Tienhoven (1880) 5 CPD 344, the offeree has to be given clear and concise instructions on the withdrawal of the offer. Bryne sent an offer via letter and a couple days later, sent a letter revoking the offer. The seller received the offer in the mail and immediately accepted via telegraph. The courts held that, although the revocation of offer had been made via letter, Van Tienhoven had accepted before the revocation letter was received. On this basis, it was held that an offer for the sale of goods cannot be withdrawn by simply posting a secondary letter which does not arrive until after the first letter had been responded to and accepted. The court gave judgment for the plaintiff and awarded that the defendant paid their costs.

Dickinson v. Dodds

The general principle is the revocation of an offer does not have to be communicated by one party to another directly; it can be done through a reliable third party. In the case of Dickinson v Dodds (1876) LR 2 Ch D, for example, the revocation might be transmitted via a trustworthy source. The Court of Appeal held that the information that was provided by a neutral and trustworthy third party about the house being sold was seen to amount to sufficient notice of the withdrawal of the offer for sale. Therefore, his acceptance was not effective.

Carlill v. Carbolic Smoke Ball Company

In a few cases, the acceptance communication is not required. The most obvious example is unilateral offers in which the necessity for dialogue is waived or inferred by behaviour. This broad idea is supported by Carlill v Carbolic Smoke Ball Company [1893] 1 QB 256. In that instance, it was decided that the advertisement constituted to an offer, which may be accepted by doing the activities specified in the offer. Such performance was sufficient to constitute acceptance, and no other communication of acceptance was required to be sent to the offeror. A similar scenario might arise if a prize is given for the return of missing items.

Hyde v. Wrench

After an offer has been declined by the person being offered it, the offer is no longer valid, as was the case in Hyde v Wrench (1840) 3 Beav 334. Here the Court held in submitting his own offer, Wrench rejected the offer made by Hyde. The original offer had been completely destroyed and it was not something that was open for Hyde to accept.

Brogden v. Metropolitan Railway Company

It is not possible to rescind the offer after it has been accepted and the acceptance has been announced since this would need the agreement of the person who accepted the offer. Following the precedent set in Brogden v Metropolitan Railway Company (1877) 2 App Cas 666, an offeror is unable to withdraw a unilateral offer after the offeree has begun execution of the offer. Although there had been no communication of acceptance, performing the contract without any objections was enough. The House of Lords held a contract did materialise through what the parties actually did– the actions they carried out. The offer was the company ordering coal and the acceptance was Brogden was supplying it. Have a look at our free notes.

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