#17253 - Responses To Offers - GDL Contract Law

Possible responses to an offer:

• Acceptance: the original offer is taken as it stands

• Rejection: the offer is terminated

  • Counter-offer: offeree responds in a broadly positive sense but proposes terms which conflict with those of the offeror. This does not include requests for further information

  • Revocation: by the offeror prior to the acceptance.

  • Lapse due to: passage of time; non-fulfilment of a condition; death.

Counter offer

• Hyde v Wrench (1840) – D offered farm for 1,000. P responded stating for 950. D refused. P stated would accept for 1,000. D refused.

  • Specific performance rejected, second-proposal was a counter-offer that terminated the original offer.

• Stevenson v McLean (1880) – On Saturday D offered iron warrants for 40s/ton. The offer was open until Monday.

  • On Monday P replied asking “whether you would accept forty for delivery over two months, or if not, longest limit you would give”.

  • On receipt of this D sold to a third party, but P purported to accept offer before D informed him.

  • Held that Stevenson’s enquiry had not been a counter-offer. His later telegram was therefore acceptance of the original offer.

• Gibson v Manchester City Council (1978) – above Mr Gibson filled in the form but left the purchase price blank, asking that certain necessary repairs should be taken into account to diminish the price. The council replied that the state of the property had already been taken into account in the fixing of the price.

  • Mr Gibson then wrote back on 18 March asking to proceed with the purchase in accordance with his original application.

  • CA Lane LJ argued that this was counter-offer

  • HoL Lord Edmund Davies: “I read it as merely exploratory of the possibility of a reduction in price in the eventuality indicated.”

Battle of the Forms

• BRS v Arthur Crutchley (1968) – Plaintiffs’ lorry, carrying a valuable load of whisky, was stolen while being stored overnight at the defendants’ warehouse.

  • Driver held delivery note: “all goods are carried on the [plaintiffs’] conditions of carriage”.

  • D stamped the delivery note with the words “received under A.V.C conditions”.

  • Held the giving of the note was an offer, and as stamping contained different terms, it was a counter-offer which was accepted by the conduct of the driver driving into the warehouse.

  • The latest shot in a battle of the forms tends to prevail, because the doctrine of counter-offer dictates that it represents the current offer on the table between the parties and terminates earlier ones.

• Butler Machine Tool v Ex-Cell-O [1979] – Sellers of a machine tool quoted a price for its delivery in ten months’ time, and on the reverse were various clauses including a price escalation clause and statement that “all orders are accepted only upon and subject to the terms set out in our quotation and the following conditions. These terms and conditions shall prevail over any terms and conditions in the buyer’s order”.

  • Buyers placed an order which was expressed to be on their own terms and conditions, and varied the delivery date. There was a tear-off slip which was to be signed and sent back stating that purchase was on their own terms.

  • Sellers sought to use escalation clause.

  • Held that the buyers terms governed, their order was so materially different from the sellers’ offer that it could not be construed as an acceptance of it. Instead, it was a counter-offer.

• Tekdata v Amphenol (2009) – Buyers and sellers, respectively, of components destined for use in Rolls Royce aero engines.

  • Buyers claimed goods were faulty, sellers claimed the terms were their own and excluded liability.

  • Held at first instance (HHJ Simon Brown QC) that the usual battle of the forms analysis was displaced here as throughout the parties’ relationship it had always been intended that Tekdata’s terms should apply, since they contained stipulations as to time and quality

  • Amphenols appeal was allowed. It was impermissible in effect to disregard the reference to Amphenol’s terms on the acknowledgment of purchase.

Revocation/Withdrawal of Offer

• Up until the moment at which an offer is accepted, the offeror may withdraw it.

  • Routledge v Grant [1828] – Grant offered Routledge a long lease. Routledge asked for six weeks to decide. G withdrew the offer, but R purported to accept it later.

    • Best CJ: “if six weeks are given on one side to accept an offer, the other has six weeks to put an end to it”

  • Mountford v Scott [1975] This was an offer to sell property, expressed to remain open for six months. However, the prospective purchaser paid 1 in return for this promise.

    • It was held that this consideration, although nominal, converted the offer into an option (a binding contract), so that the offeror was not free to withdraw it during the six-month period.

• If an offer is to be effectively withdrawn, its revocation must be communicated to the offeree.

  • Byrne v Van Tienhoven (1880) – 1 October the defendants wrote to the plaintiffs, offering to sell them 1000 boxes of tinplates.

    • 8 October the defendants wrote again to withdraw their offer as price of tinplates risen sharply. This didn’t reach P until 20 Oct. P telegraphed acceptance of offer on 11^th Oct.

    • Held a valid contract - the acceptance had been made before the intended withdrawal had been communicated to the plaintiffs.

    • Lindley J - “If the defendants’ contention were to prevail no person who had received an offer by post and had accepted it would know his position until he had waited such a time as to be quite sure that a letter withdrawing the offer had not been posted before his acceptance of it.”

  • Dickinson v Dodds [1876] – Revocation can be communicated indirectly by a third party.

    • Contract to sell houses, plaintiff was informed by third party that someone else had bought the house. P purported to accept offer the next day.

      • No contract as P knew that D was no longer in a mind to sell to him.

    • James LJ: It must, to constitute a contract, appear that the two minds were at one

  • Cf Snapping up cases.

    • In Byrne, the offeree accepts thinking that there is still an offer on the table. In Dickinson v Dodds, the offeree accepts thinking that there is probably not an offer on the table.

• Withdrawal of Unilateral Contract

  • Shuey v United States [1865] – US Secretary of War published advert in newspapers offering reward for information leading to arrest of certain criminals. 7 months later order revoking the offer was published.

    • The following year, the claimant gave relevant information to the authorities.

      • His claim for the reward failed before the US Supreme Court on the basis that it had been validly withdrawn, despite the fact that the withdrawal had not come to his notice.

    • Strong J – must be freedom to withdraw this offer. Impractical to communicate to everyone therefore the rule is that a withdrawal published in the same way that the offer was originally made will be effective.

• Offers may lapse in time

  • Ramsgate Victoria Hotel v Montefiore (1866) – D applied for shares in the plaintiff company at a set price. Nearly six months later, when share price had fallen, P accepted the offer.

    • Held that the offer had lapsed after a reasonable period fo time.

  • Manchester Diocesan v Commercial and General Investment (1970)

    • Buckley J either:

      • by implication the offer is made on terms that, if it is not accepted within a reasonable time, it must be treated as withdrawn.

      • if the offeree does not accept the offer within a reasonable time, he must be treated as having refused it.

• Knowledge of the Offer in Acceptance

  • Williams v Carwardine (1833) – A reward having been offered for information leading to the discovery of a murderer, the plaintiff gave the relevant information to ease her conscience thinking she was close to death

    • Decided that the plaintiff’s knowledge of the offer was to be deduced from the circumstances, and that her motivation in responding to it was irrelevant.

  • Tinn v Hoffman (1873) – Cross-offers; The parties corresponded by post about the sale and purchase of 800 tons of iron. One offered at 69s./ton the other wrote offering to buy at the same price.

    • Blackburn J: “The promise or offer being made on each side in ignorance of the promise or offer made on the other side neither of them can be construed as an acceptance of the other.”

    • Honyman J, dissenting on this issue, said: “The parties are ad idem at one and the same moment”.

      • Leads Honyman J to find the parties bound to each other when neither yet knows of it. That is not a sensible result.

  • R v Clarke (1927) – Government of Western Australia offered a reward for information leading to the arrest of suspected murderers, and a pardon to an accomplice who gave the information.

    • Clarke did give the information, but later admitted that his only reason for doing so had been to clear himself of a charge of murder.

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