Case Summary - Ramsgate Victoria Hotel v Montefiore (1866 CE)
The plaintiff's acceptance of the defendant's offer was not made within a reasonable period in the case of Ramsgate Victoria Hotel v Montefiore (1866 CE). Facts The plaintiff corporation was established on June 6, 1864. The defendant made an offer to buy 50 shares on June 8th. The board allotted the shares on November 23 and wrote to the defendant approving his offer. Decision The defendant was not obligated to purchase the stock. 'The allotment must be made in a reasonable amount of time, and the period between June and November was not reasonable.'
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Case Summary - Dickinson v Dodds (1876) CA
Because there was no consideration, the pledge to keep an offer open was not binding; notice of withdrawal of an offer could come from a third party. Facts The defendant made a written offer to the plaintiff to sell specific land for £800, with the stipulation that 'this offer be left over until Friday 9.00 am, 12 June 1874.' Both parties felt the defendant was bound by the postscript. The plaintiff decided to accept the offer on June 11th morning. A third party informed the plaintiff that the defendant had been 'offering or agreeing' to sell the property to one Thomas Allan that afternoon. On June 11th, the defendant had signed a contract of sale with Allan. The plaintiff attempted to contact the defendant that evening and was successful in telling the defendant of his acceptance of the offer at 7 a.m. on June 12th. Decision The plaintiff and defendant did not have a contract, according to the Court of Appeal. (I) Because the defendant's pledge to keep the offer open until June 12 was made without consideration, it was not enforceable. (II) It is too late for an offeree to accept an offer after he learns that it has been withdrawn (see James LJ) or that the property has been sold (per Mellish LJ). Dickinson v Dodds (1876) CA: Because there was no consideration, the pledge to keep an offer open was not binding; notice of withdrawal of an offer could come from a third party. Facts The defendant made a written offer to the plaintiff to sell specific land for £800, with the stipulation that 'this offer be left over until Friday 9.00 am, 12 June 1874.' Both parties felt the defendant was bound by the postscript. The plaintiff decided to accept the offer on June 11th morning. A third party informed the plaintiff that the defendant had been 'offering or agreeing' to sell the property to one Thomas Allan that afternoon. On June 11th, the defendant had signed a contract of sale with Allan. The plaintiff attempted to contact the defendant that evening and was successful in telling the defendant of his acceptance of the offer at 7 a.m. on June 12th. Decision The plaintiff and defendant did not have a contract, according to the Court of Appeal. (I) Because the defendant's pledge to keep the offer open until June 12 was made without consideration, it was not enforceable. (II) It is too late for an offeree to accept an offer after he learns that it has been withdrawn (see James LJ) or that the property has been sold (per Mellish LJ). Case Summary - Grant vs. Routledge (1828) CCP
Grant vs. Routledge (1828) CCP: An open offer may be withdrawn before its expiration date if it has not been accepted. Facts The defendant offered to buy a lease from the plaintiff on specified terms in writing on March 18, 1825, adding, "a firm answer to be delivered within six weeks from the 18 March 1825." (The six-week period ended on May 1st.) On April 9, the defendant withdrew his offer, and the plaintiff attempted to accept it on April 29. Decision It was held that there was no binding contract. Per Best CJ: ‘… if six weeks are given on one side to accept the offer, the other has six weeks to put an end to it … Till both parties are agreed, either has a right to be off … As the defendant repudiated the contract on the 9 of April, before the expiration of the six weeks, he had a right to say that the plaintiff should not enforce it afterwards.’ Case Summary - Stahag Stahl GmbH vs. Brinkibon Ltd (1982) HL
Stahag Stahl GmbH vs. Brinkibon Ltd (1982) HL: When communication is instantaneous, the contract is formed when and when the acceptance is received. Facts The appellants in London and the respondents in Vienna made a telex contract for the sale of steel bars. The appellants asked for permission to serve a writ outside of the court's jurisdiction. According to Lord Wilberforce, the question was "whether an acceptance by telex sent from London but When a contract is received in Vienna, it is made in London or Vienna.' Decision It was held that Entores Ltd v Miles Far East Corporation (above) was correctly decided. Lord Wilberforce said that: ‘… the simple case of instantaneous communication between principals [so that] the contract (if any) was made when and where the acceptance was received. This was … in Vienna.’ However, their Lordships left open the possibility that the rule might not apply to a less straightforward telex case. Per Lord Wilberforce: ‘No universal rule can cover all such cases: they must be resolved by reference to the intentions of the parties, by sound business practice and in some cases by a judgment where the risks should lie.’ Case Summary - Entores Ltd v Miles Far East Corporation (1955) CA.
The postal rule does not apply to instantaneous communications, according to Entores Ltd v Miles Far East Corporation (1955) CA. Facts The plaintiff in England and the defendants in Holland negotiated a telex contract for the sale of 100 tonnes of copper cathodes. The defendants challenged the court's decision to allow leave to serve a writ outside of the jurisdiction. Per Denning LJ: ‘The offer was sent by telex from England … and accepted by telex from Holland. The question for our determination is where was the contract made?’ A telex contract is formed, according to the Court of Appeal, when acceptance is obtained, in this example in England. The postal rule is an exception to the general rule that acceptance should be conveyed to the offeror. It is a general law that applies to all forms of instantaneous communication, including face-to-face conversation, telephone communication, and telex communication. This is because, in most cases, the sender of an acceptance knows whether or not the acceptance has been received by the offeror. Per Denning LJ (obiter): ‘If a case arose where an acceptance was not received and the offeror was at fault in not informing the offeree of the problem, the offeror would be estopped from denying receipt and would be bound by the contract.’ Case Summary - Commercial and General Investments Ltd v Manchester Diocesan Council for Education (1969)
ChCommercial and General Investments Ltd v Manchester Diocesan Council for Education (1969) Ch: If an offeror wants to be bound only if his offer is accepted in a specific way, he must state this clearly. Facts The plaintiff wanted to sell a school building that was set to close in August 1967. The plaintiff requested tenders in 1964 and requested that they be received by August 27, 1964. The defendant made the highest tender, and there was some correspondence between the plaintiff's and defendant's surveyors in September 1964. The Secretary of State's approval was received on November 18th. The plaintiff's solicitors wrote to the defendant's solicitors on December 23 to confirm the contract. The defendant's lawyers responded on January 5th, saying they couldn't "confirm that there is a binding contract in this instance." The plaintiff's solicitors accepted the offer in a letter to the defendant at the address listed on the bidding form on January 7, 1965. Decision There was a contract, it was determined. (I) Even though the letter of September 15, 1964 did not appear to conform with requirement 4, it was an acceptance. Buckley J made this judgement for two reasons: I a request for a specific manner of acceptance by the defendant offeror would generally be understood as a request for that method or a similar way. Per Buckley J: ‘If an offeror intends that he shall be bound only if his offer is accepted in some particular manner, it must be for him to make this clear’; (ii) The plaintiff included condition 4 into the bargain: 'It would thus be a rigorous compliance provision that the plaintiff might waive, provided the defendant was not negatively affected.' (II) In any case, the letter of 7 January 1965 was a legal acceptance under condition 4 in any case The notion that an offer expires if it is not accepted within a reasonable time is based on "whether the offeree should be deemed to have denied the offer by his behaviour." Following the plaintiff's letter of 15 September 1964, it was evident that the offer had not been rejected, therefore acceptance on 7 January was still possible. Case Summary - Re London and Northern Bank ex p Jones (1900)
In Re London and Northern Bank ex p Jones (1900), the offer had been withdrawn before the hearing. The notification of acceptance had been posted. Facts The applicant applied for 1,000 shares in the corporation on October 15, 1898. He formally rescinded his application on October 26th in a registered letter. The withdrawal was received at 8.30 a.m. on October 27 and was opened at 9.30 a.m. by the company secretary. Meanwhile, on October 26, the company's board of directors decided to assign the shares to the applicant and accepted his offer in writing. The allotment letters were gathered during the course of the night and taken out to be posted at 7 a.m. on October 27. The letter was presented to a postman in a London street around 7.30 a.m. The letter was postmarked at 11 a.m., according to the postmark. Decision The company had failed to demonstrate that it had posted its acceptance of the applicant's offer before receiving his withdrawal at 8.30 or 9.30 a.m. Per Cozens-Hardy J: ‘The Postal Guide … expressly states that town postmen are not allowed to take charge of letters for the post … I cannot, therefore, regard the postman as anything better than a boy messenger employed by [the company] to post the letters and the mere fact of handing the letter to the postman … was not a posting of the letter.’ Case Summary - Henthorn v Fraser (1892) CA
Henthorn v Fraser (1892) CA: Even though the offer was not made by post, acceptance was complete at the time of posting. Facts On July 7, 1891, the plaintiff (who could not write) was at the defendants' office in Liverpool when they presented him with an offer to sell him a number of residences. The plaintiff returned to Birkenhead with the letter. The defendants withdrew their offer to the plaintiff on July 8, between 12 and 1 p.m. The plaintiff's lawyer posted the plaintiff's acceptance of the offer at 3.50 p.m. At 5.30 p.m., the defendants withdrew, and at 8.30 p.m., the plaintiff accepted the withdrawal. Decision Even though the offer was not made by post, the Court of Appeal found that there was a contract because acceptance was complete at the time of posting. The concept that the postal rule was founded on implied authority from the offeror to the offeree to treat the post office as the offeror's agent was rejected by both Lord Herschell and Kay LJ. Case Summary - Leon Van Tienhoven & Co. v. Byrne & Co. (1880) CCP
Leon Van Tienhoven & Co. v. Byrne & Co. (1880) CCP: When an offer is withdrawn, the postal rule does not apply. Facts The defendants (in Cardiff) wrote to the plaintiffs (in New York) on October 1, 1879, proposing to sell them 1,000 boxes of tin plates under certain conditions. The defendants wrote again on October 8, cancelling their offer. The plaintiffs received the offer on October 11th and accepted it by telegram the same day, followed by a letter on October 15th. The plaintiffs learned of the defendants' withdrawal of the offer on October 20. Decision Because a withdrawal of an offer must be conveyed to the offeree in order to be effective, there was a genuine contract. A withdrawal is not subject to the postal rule because it is only disclosed when the offeree receives it. This is because the postal rule is (per Lindley J): ‘… based upon the principle that the writer of the offer has expressly or impliedly assented to treat an answer to him by 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.’ Case Summary - The Household Fire and Carriage Accident Insurance Co Ltd v Grant (1879)
Use of the post was a legitimate means of acceptance in the case of The Household Fire and Carriage Accident Insurance Co Ltd v Grant (1879). Facts The defendant offered to purchase some of the plaintiff's stock. An allotment letter was sent to the defendant, but it never came, indicating that the offer had been accepted. The company was liquidated three years later, and the liquidator claimed the unpaid sums on the defendant's shares. Decision The defendant was found to be a shareholder by the Court of Appeal, and hence obliged to pay the demanded amount. In this case, the post was a suitable means of acceptance, thus there was a contract on the posting of the allocation letter, according to the postal rule. Bramwell LJ dissents, claiming that acceptance should be informed to the offeror only after it has been accepted |
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