Legal Case Summary

Byrne & Co v Leon Van Tien Hoven & Co [1880] 5 CPD 344

Contract – Sale of goods – Offer and acceptance

Facts
The defendants wrote a letter, on October 1, to the plaintiffs offering the sale of 1000
boxes of tin plates. The defendant was based in Cardiff and the plaintiff was based in
New York, and letters took around 10-11 days to be delivered. The plaintiffs received
this letter on October 11 and accepted it on the same day by telegram, as well as by
letter on October 15. However, on October 8, the defendant sent a letter to the plaintiffs
which withdrew their offer and this arrived with the plaintiff on October 20. The plaintiffs
claimed for damages for the non-delivery of the tin plates.

Issue
The court was required to establish whether the withdrawal of the offer for the sale of
goods was acceptable. The court would have to consider whether the contract had been
agreed by the acceptance by the plaintiffs of the letter of October 1, or whether the
defendants had successfully withdrawn their offer by issuing the withdrawal by letter on
October 8.

Decision / Outcome
The court held that the withdrawal of the offer was ineffective as a contract had been
constructed between the parties on October 11 when the plaintiffs accepted the offer in
the letter dated October 1. 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cannot be withdrawn by simply posting a secondary letter which does not arrive until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.
Byrne v Van Tienhoven (1880) 5
CPD 344
 by Will Chen

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Key point
 The postal rule is not applicable to a revocation of offer

Facts
 D in Cardiff posted letter to C in New York offering to sell C 1000
boxes of tin plates on 1 Oct

 Due to a rise in the price of tinplates, D sent a new letter to revoke

the offer on 8 Oct

 The letter to revoke was not received until 11 Oct, and C

telegraphed its acceptance on same day

Held (High Court)

 There was a binding contract between the parties
  The revocation of offer was not effective on 8 Oct when it was sent,
only when it was received

Lindley J
 An offer can be withdrawn before it is accepted but it needs to be
communicated

 *The postal rule is not applicable to a revocation of offer

 Reason: the acceptor would be uncertain and have to wait after his
acceptance until he is sure that no revocation letter was sent
Byrne & Co v Leon Van Tien Hoven & Co [1880] 5 CPD 344 is a leading English contract law case
on the issue of revocation in relation to the postal rule. In it Lindley J of the High Court's Common
Pleas Division ruled that an offer is only revoked by direct communication with the offeree, and that
the postal rule does not apply in revocation; while simply posting a letter counts as a valid
acceptance, it does not count as valid revocation.[1]

Facts[edit]
Van Tienhoven & Co posted a letter from their office in Cardiff to Byrne & Co in New York
City, offering 1000 boxes of tinplates for sale on 1 October. Byrne and Co got the letter on 11
October. They telegraphed acceptance on the same day. But on 8 October Van Tienhoven had sent
another letter withdrawing their offer, because tinplate prices had just risen 25%. They refused to go
through with the sale.[2]

Consequences[edit]
Lindley J held that the withdrawal of the offer was not effective until it was communicated. His
judgment stated the following:
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 the 1st
of 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: Harris's Case; Dunlop v Higgins, even although it never reaches its
destination. When, however, those authorities are looked at, it will be seen that they are based upon
the principle that the writer of the offer has expressly or impliedly assented to treat an answer to him
by a letter duly posted as a sufficient acceptance and notification to himself, or, in other words, he
has made the post office his agent to receive the acceptance and notification of it. But this principle
appears to me to be inapplicable to the case of the withdrawal of an offer. In this particular case I
find no authority in fact given by the plaintiffs to the defendants to notify a withdrawal of their offer by
merely posting a letter, and there is no legal principle or decision which compels me to hold, contrary
to the fact, that the letter of the 8th of October is to be treated as communicated to the plaintiff on
that day or on any day before the 20th, when the letter reached him... ...Before leaving this part of
the case it may be as well to point out the extreme injustice and inconvenience which 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.[3]
Lindley's judgment notes in part that the postal rule cases which he reviewed include an express
or implied consent by an offeror to treat an answer duly sent by post as an acceptance.

Rule of law[edit]
Revocation of an offer must be received and understood by the offeree before it comes into effect.
An acceptance by the offeree before they receive notice of the revocation will be considered valid.[4]