Topic for Assignment

Offers may be withdrawn at any time up until acceptance. Discuss the extent to which you agree with this statement and analyze the rules which determine the validity of the withdrawal of an offer.

Answer:

Section 2(a) define proposal or offer as,

When a person signifies to another his willingness to do or to abstain from doing anything, with a view to obtaining the assent of that other to such act or abstinence, his is said to make a proposal The person making the offer is called offeror and the person to whom the offer is made is called offeree. For Example: offer to sell his horse to ! for "#,###. This is an offer.

Section 2(b) define acceptance as,

When the person to whom the proposal is made signifies his assent thereto, the proposal is said to be accepted. proposal when accepted becomes promise. The acceptance must be given only by the person to whom the offer is made. For Example: $n the above example, when ! accepts the offer. This is an acceptance.

A contract is said to come into existence, When acceptance of an offer has been communicated to the offeror by the offeree. $t means a contract is considered valid when two or more parties with capacity make an agreement involving valid consideration to do or to refrain from doing some lawful act. $f these elements exist, the contract is valid. $f one or more of these necessary elements is missing the contract is void or voidable. $n other words, it is not a true contract and therefore cannot be enforced by law.

Legal criteria for a valid contract:

". ll parties must have capacity to enter the contract. %. n offer must be made. &. 'onsideration must be exchanged. (. The parties must be in mutual agreement. ). The contract*s ob+ect and purpose must be legal. ,. The form of the contract must meet the legal re-uirements. s the case of Brodgen & Metropolitan, in which the acceptance takes place by performing the contract without any ob+ection as to the terms. !ut the on the other hand silence could not be regarded as the acceptance of offer s the case of Felthouse v. Bindley in which one party wants to regard the silence as acceptance of offer but it was held that there was no contract.

The offer could only be accepted by the person to whom it is made. $t could not be accepted by any third party. When the offeree accepts the terms and conditions made by the offeror and communicate his acceptance to him, the acceptance takes place. The Postal rule is an exception to the general rule of contract law in regard to the acceptance, which states that .acceptance in not effective until communicated to and received by the offeror. The postal rule states that acceptance takes effect when a letter is posted. The rationale given for the rule is that both parties nominates the post office as $/01$E2 3E4T and therefore receipt of the acceptance by the post office is regarded as that of the offeree. Thus acceptance is effective even when the letter is lost in the post. 5owever, if the letter is lost or delayed in the post because the offeree has addressed it incorrectly the .postal rule6 will not apply. To minimi7e the risk, the offeror can re-uire actual receipt as a condition before being legally bound. The postal rule applies only to acceptance. !ut posting rule does not appl in e!er situation, When the offeror specify the mode of communication it is concluded that the acceptance could only be come into existence when the offeror receives the letter. s in the case of Holwell Securities v Hughes, it was held that the offeror use the word .notice in writing6 means that hughes re-uire actual notice of acceptance. !ut it is stated in the case of Household Fire Insurance v Grant that acceptance of offer took place at the moment of posting not

at the time when acceptance is received. s the general rule of posting of acceptance guides about this.

"he offer is onl re!o#ed before the acceptance b offeror. $f the notice of acceptance of offer reached, no revocation could takes place. 8o it means it must be communicated before acceptance otherwise it will lose its legal value. s the case of Pyne v. ave, 2efendant was not bound to purchase the goods. s he withdraw his offer before acceptance. /ere posting of a revocation is not sufficient communication. 8ame as the case of Byrne v !an "ienhoven, that revocation could not take effect until received. 8imply posting a letter does not revoke the offer.

$e!ocation b post is ineffecti!e until the letter is actuall recei!ed b the offeree. The implication of this is that it is possible for a letter of acceptance to be posted after a letter of revocation of the offer has been posted but before it is delivered, and acceptance will be complete at the time that the letter of acceptance was posted, which would rendered the offeror9s revocation inoperative.

!ut it is not necessar that communication of withdrawal comes directl from offeror.

$f offeror communicated the revocation through agent or any other third party who is reliable for both offeror and offeree, it is said that the offer is revoked. s the case of #ic$inson v #odds, it was held that offeror is free to withdraw the offer at any time before acceptance take place unless the deposit has been paid. nd that withdraw was being communicated through a third party.

$%&'S for the $e!ocation of (ffer:

n offer can be revoked at any time before communication of acceptance. The revocation while it must be communicated to the offeree, need not be personally communicated by the offeror. 'ommunication need only be from a reliable source. :"; n offeree*s power of acceptance may be terminated by re+ection or counter<offer by the offeree, or :b; lapse of time or revocation by the offeror, or :d; death of incapacity of the offeror or offeree. :%; $n addition, an offeree*s power of acceptance is terminated by the non<occurrence of any condition of acceptance under the terms of the offer. =Where an offer is for the sale of an interest in land or in other things, of the offeror, after making the offer, sells or contracts to sell the interest to another person, and the offeree ac-uires reliable information of that fact, before he has exercised his

power of creating a contract by acceptance of the offer, the offer is revoked. = n offeree*s power of acceptance is terminated when the offeror takes a definite action inconsistent with an intention to enter into the proposed contract and the offeree ac-uires reliable information to that effect. )ithdrawal of an offer cannot legall be made: ". Where the party making the offer has contracted under seal or for a consideration to hold it open for a certain time, he may not revoke it within such time. %. fter a contract is concluded an offer may not be revoked. &. $f it indicates, whether by stating a fixed time for acceptance or otherwise, that it is irrevocable. (. $f it was reasonable for the offeree to rely on the offer as being irrevocable and the offeree has acted in reliance on the offer. ). The offeree relied to his detriment upon an implied or express promise by the offeror not to revoke if such detrimental reliance was foreseeable by the offeror. s a general rule, all offers are revocable at any time prior to acceptance, even those offers that purport to be irrevocable on their face.

*onclusion:
t the end it is concluded, that the offer could be withdrawn at any time by the offeror before the offeree accepts

the offer, even if the acceptance is merely transferred and not received by the offeror. !ut the revocation of offer could not be considered valid when offeror +ust posts the letter of revocation of offer. it is considered valid when offeree receives the letter of revocation.