Sir William Anson stated in his book,Principal of the Law of Contract,he definded contract as a legally binding agreement made between two or more parties, by which rights are acquired by one or more to act or forbearances on the part of the other or others.This means that in order to make a valid contract, there must be the presence of all legal elements to constitute the presence of the contract.

One of the legal elements are offer and acceptance. Offer is expression of willingness to contract on certain terms did with the intention that it shall become binding as soon as it is accepted by the perseon to whom it address to. Where as acceptance is an invitation expressed or implied by the offeree made whilst the offer remains open and in the manner requested in that offer of the offree¶s willingness to be bound unconditionally to a contract with the offeror on the terms stated in the offer.

However,an offer can be terminated by several reasons that is stated below :1- End of specified time 2- End of reasonable time 3- Failure of a precondition 4- Rejection 5- Counter offer 6- Death of offeror 7- Death of offeree 8- Withdrawal


Therefore the offer had lapsed before the company tried to accept it.the socalled acceptance is not an acceptance at all and it cannot bind the offeror. A reasonable time is determined by the circumstances. he was then informed that the shares had been allotted to him. securities. or goods that fluctuate rapidly in price.If the offeree¶s intention is to accept after the specified time. Where the parties negotiate by methods that are not immediate. particularly when the contemplated transaction involves a fixed price. paying a deposit into their bank. He refused to do so.strictly speaking. and there was no contract between them.Time can terminate offers in two instance Where the offeror expressly imposes a time limit An offeror can always specified a time by which the offer must be accepted if it is to be accepted at all. Dickinson v. the offer will probably persist for a longer time. Where contracts involve the purchase or sale of commodities. Dodds case is an example of just that occuring.Such offers do exist and they are called ³standing offers´(although. 2 .If a time specification is imposed . Generally. and asked to pay the balance due on will lapse after a reasonable lenght of time has passed.End Of Specified Time Very few offers are so completely open-ended that they can be accepted at any time unless expressly revoked. In Ramsgate Victoria Hotel v Montefiore (1866) Montefioree applied for shares in the plaintiff company.standing offers can be subject to time limitations in exactly the same way as all other offers). After hearing nothing from the company. which are a commodity with rapidly fluctuating price. in negotiations face-to-face or by telephone or other immediate forms of communication the offer is terminated when the parties discontinue negotiations. and the court upheld his argument that five months was not a reasonable lenght of time for acceptance of an offer to buy shares. a reasonable time is normally very short.the offer automatically terminates unless it is accepted before the time of the contract lapsed. Reasonable Lenght Of Time Where the offeror has not given the specified exactly how long the offer will remain valid.

there is nothing the offeree can do. In Financing Ltd v Stimson (1962) the defendant saw a car sale at £350 by second-hand car dealer on 16 March. The that the hire-purchase works is that the finance company buys the car outright from the dealer. the offer was no longer open so no contract had been concluded 3 . on 25 March the plaintiffs signed the written µagreement¶. They lateer sued the defendant for failure to pay the instalments. Common examples include ³subject to finance´ . trough inadvertence or otherwise. doesnot meet the condition. If the condition is not fulfilled. as the so-called µagreement¶ was really an offer to make a contract with the plaintiffs. and then sells it back at the buyer. acceptance is impossible because the condition precedent to the right to accept has not been fulfilled. The defendant then buys the car from the finance company (the plaintiffs). which was subject to the implied condition that the car remained in much the same state as it was in when the offer was made. He decided to buy it on hire-purchase terms.which stated that the agreement would be binding on the finance company only when signed on their behalf. On 24 March the car was stolen from the dealer¶s premises.Failure Of A Precondition It is quite clear that offers can be made subject to stipulated conditions. As the implied condition had been broken by then. In such cases. ³subject to zoning approval´ and so on.Particular problems occur where an offeree has to satisfy some condition before he or she can accept the offer and. On 18 March the defendant paid the first instalment of £70. who pays instalments. The Court of Appeal ruled in favour of the defendant. The plaintiff were claiming that they had accepted the offer by signing the document on 24 March. Not knowing this. the offer lapses (unless the offeror agrees to waive the condition). until that offer was accepted. The defendant signed the plaintiffs¶ form. if the condition is not waived.

a rejection will not terminate the power of acceptance unless reasonably relied on by the offerer in good faith. When a counteroffer consists of changes to the terms of the original offer (rather than a proposal of completely new terms). In this situation the offeror can make a new offer on exactly the same terms. Under irrevocable offers. or option contracts. or modifies the terms of the offer is a counteroffer. subtract. 4 . it was held that this was no longer available. In Hyde v Wrench (1840) the defendant offered to sell his farm for £1.000. Thus. this is also known as a conditional acceptance. The farm owner refused to sell it at that price. it had been terminated by the counter offer. which creates a new power of acceptance in the party that had been the offeror. Counter Offer A counteroffer is a communication by the offeree that proposes to add. or modify the terms of the offer. and the plaintiff responded by offering to buy it at £950 ± this is called making a counter offer. and then only to the extent to avoid injustice.Rejection An unequivocal rejection by the offeree of the terms of the offer will terminate the power of acceptance. An offeree need not intend for his or her communication to be a counteroffer. a communication by the offeree that purports to be an acceptance but adds. but is not obliged to do so.000. it is functionally equivalent to a rejection of the original offer and the creation of a new offer. and when the plaintiff later tried to accept the offer to buy it at £1. subtracts.

Held : They failed. the vendor died. Morgan denied liability. Because the second purchaser had known of the deceased¶s death when he signed the contract. a valid contract can arise and the deceased¶s estate can be bound. at least until the plaintiff had notice of it. before the other joint purchaser could sign. Hold : The estate was liable. but the plaintiffs. because the continued existence of the offer was really only dependant upon the continuation of the credit arrangement ± not the continued life of the deceased. requesting them to give credit to his son and guaranteeing payment of the running balance of the account up to £100. The guarantee could continue after death. When the son defaulted in payment the plaintiffs sued Leigh¶executor. for example : Fong v Cili (1968) 11 FLR 495 Facts : The vendor and one of two joint purchasers of a parchel of land signed the contract of sale but. on the guarantee. for example : Bradbury v Morgan (1862) 1 H & C 249. See. arguing that the debt arose out of transactions entered into after Leigh¶s death. See. continued giving the son credit. The other purchaser then signed . it cannot be accepted and no contract arises. Morgan. 158 ER 877 Facts : Joseph Leigh wrote to the plaintiffs. presupposes that the offer does not involve or require personal performance by the deceased. Joseph Leigh then died.even though he knew of the vendor¶s death ± and the purchasers tried to enforce the contract against the deceased¶s estate. The plaintiffs extended credit on the basis. in ignorance of the fact. it appears that valid acceptance is possible. the offer had already lapsed and could not be accepted However.Death of the offeror It is quite cleare that an offeree cannot accept an offer after he or she has notice of the offeror¶s death. where the offeree is unaware of the death. This however. Notice terminates the offer. 5 . If the offer requires that.

there is no longer an offer at all.The relevent part of Warrington LJ¶s jugdement reads (at 695): ³I think it would be more accurate to say that the offer having been made to a living person who are ceases to be a living person before the offer is accepted. and if the parties intend that the offer be acceptable by the offeree¶s estate.for instance: Carter v Hyde (1923) 33 CLR 115 Facts: Carter gave Hyde and option to buy certain premises.Death of the Offeree The general rules concerning the effect of the death the offeree was laid down in Reynold v Atherton (1921) 125 LT 690. it could be exercised by his executors for the benefits of his estate.then the death will not terminate it. See.´ The problem with this rule is that it presupposes that all offer are personal to the offeree and are not intended to capable of acceptance by the estate.Hyde died but.his executors exercised the option. and the offer ceases to be an offer capable of acceptance. 6 . Held: As the option was not intended to be that was personal to Hyde. before three months expired. arguing that the offer had lapsedon Hyde¶s death. Carter was bound to sell. This presumption will not always accord with the facts. the offer remain open for a period of three months. Carter disputed their right to do so.The offer not intended to be made to a deead person or to his executors.

Here. 100 ER 502 Facts : The defendant bid £40 for goods that were being auctioned. his offer had terminated and the auctioneer could not accept. but before they were knocked down to him.the defendants wrote erevoking their offer. It follows from this that an offer can be revoked at any time before acceptance. When the plaintiffs had not replied by 8 October . See. and thereafter it cannot be accepted. Was the revocation effective or was there abinding contract? Held : While an offer can be revoked at any time before acceptance. Accordingly. See. did not recieve that letter until 20 October.Withdrawal Withdrawal of offer The withdrawal of an offer is sometimes described as the revocation of an offer. he or she can accept the offer and any such acceptance will create a valid and binding contract. Until the offeree becomes aware of the revocation. for instace: Payne v Cave (1789) 3 TR 148. Held : A bid is merely an offer and it may be revoked at any time prior to acceptance. by which time the defendants¶ offer had been validly accepted. The plaintiffs. the offer comes to an end. Once revoked. the revocation was not effective until 20 October. a revocation is not effective until it has been communicated to the offeree. any revokation must be communicated to the offeree before it becomes effective. who had cable an acceeeptance on 11 October. he withdraw his bid. Acceptance at auction s occurs on the fall of the hammer. The question is was whether he could withdraw the bid in this fasion. and as the defendant had withdrawn his bid before that happened. an enforceable contract had arisen on 11 October 7 . for instance: Byrne v van Tienhoven (1880) 5 CPD 344 Fact : On 1 October the defendants wrote to the plaintiffs offering to sell them a quantity of tin plate and suggesting a reply by cable. Withdrawal must be communicated Like the offer itself.

for instance: Dickinson v Dodds (1876) 2 Ch D 463 Facts : On Wednesday Dodds offered to sell Dickinson some houses for £800. 9am´. Dodds sold the house s to a third party on Thursday. Held : The acceptance was invalid. Dickinson heard of this sale from a fourth peerson on Thursday evening and. the communication can be made by some other reliable sources. His letter stated that the offer was ³to be left over until Friday. The offeror need not to give notice of revocation personally for it to be effective because the oofer had already been revoked by the communication from the fourth man. See.The revocation of an offer does not have to be communicated by the offeror. Despite this. before 9 am on Friday morning. 8 .so there was no contract. attempted to accept Dodd¶s offer by handing him a formal acceptance.


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