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Withdrawal of offers

Previous: Acceptance

An offer can be withdrawn at any time before it is accepted, unless there a contract to keep it open; which must be supported by consideration.

Bilateral revocation

Withdrawal must be communicated to the offeror. The postal rule does not apply to offers (or withdrawals), only to acceptance. In Byrne v Van Tienhoven [1880], a postal revocation was sent before an instantaneous telegram of acceptance. As the acceptance was received before the letter of revocation, there was a contract and the postal rule did not apply. In Dickenson v Dodds [1876], it was ruled that if the offeree knows of revocation, that is sufficient; an explicit communication does not need to occur. We must also distinguish between counter offers and mere inquiries, as in the case of Stevenson v McLean [1880].

Unilateral revocation

To revoke a unilateral offer, the offeror must take reasonable steps. Both a significant lapse of time or death will also revoke such offers. In Errington v Errington [1952], it was ruled that once performance had started, there was a collateral contract keeping the contract open to its beneficiaries. Later, in Dahlia v Four Millbank Nominees [1978], it was also ruled that unilateral offers cannot be revoked once performance has started.

Finality of agreement

A contract may not be completed with uncertain terms. May and Butcher v R [1929] ruled that the term ‘a price to be agreed’ could not complete a contract, however a court could have imposed a reasonable price if nothing had been said about the price. Meanwhile, a contract can be valid if terms are ‘subject to’ an external factor. A court can interpret missing terms into a contract if they are missing and have been relied upon. It appears that part performance of a contract allows uncertainty in further terms, however, as was seen in Foley v Classique Coaches [1955]. As a general rule, there cannot be a contract to ‘lock in’: an agreement to agree. However, there can be a ‘lock out’ agreement: a first refusal agreement. This was seen in Pitt v PHH Asset Management [1994]. An agreement may be subject to an external factor though, such as a third-party index, or satisfaction by a party to the contract. Pym v Campbell [1856] illustrates this point.

Intentions of the parties

As has been previously mentioned, a contract is not enforceable unless there is an intent to create legal intentions. As such, it was perfectly valid in the case of Rose and Frank Co v Crompton & Bros [1924]  to explicitly exclude legal enforceability. The court accepted this term. It is usually the case that the context shows whether there is an intent to create legal relations, and although legal relations may exist in a family business, as can be seen in Snelling v John Snelling Ltd [1972], the court will not usually enforce domestic (family) agreements. In Balfour v Balfour [1919], Lord Atkin said that “cold courts” are not the place for contractual discussions of “love and affection”.

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