13 December 2012 | Susan Singleton
When is an offer formally evoked?
Van Tienhoven & Co sent a letter by post from its office in Wales to Byrne & Co in the US. It offered 1,000 boxes of tinplates for sale on 1 October. Due to the distance, the communication was not received until 11 October. Byrne & Co sent a telegraph on 11 October to accept the offer. However, Van Tienhoven sent a letter on 8 October withdrawing its offer as the price of tinplate had risen by 25 per cent. The court held the offer was not withdrawn until communicated.
The judge said that “there is no doubt an offer can be withdrawn before it is accepted and it is immaterial whether the offer is expressed to be open for acceptance for a given time or not. The offer was posted on 1 October, the withdrawal was posted on the 8th and did not reach the plaintiff until after he had posted his letter of the 11th accepting the offer. It may be taken as now settled that where an offer is made and accepted by letters sent through the post, the contract is completed the moment the letter accepting the offer is posted.
“It may be as well to point out the extreme injustice and inconvenience that any other conclusion would produce. 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.”
So the mere posting of a withdrawal of an offer was not enough for it to be taken to have reached the buyer and did not work in withdrawing the offer. Had it telegraphed the withdrawal on 8 October, the problem would not have arisen.
In practice, in giving formal notices to terminate an agreement, always read the terms in the agreement and follow them exactly. Many lawyers will both post a letter as well as emailing it as it is better a recipient receives a letter twice than not at all. Indeed, some lawyers post, fax and email as fax but not email may be recognised under some contracts and some legal systems. As ever, the more evidence the better of withdrawal or making of an offer.
☛ Susan Singleton is a solicitor at Singletons.
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