Revocation of Offer Case Law: Everything You Need to Know
Revocation of offer case law can occur any time before an offer is accepted.3 min read
2. Automatic Expiration of Offer
3. How to Reject an Offer
Revocation of offer case law can occur any time before an offer is accepted. If the party making the offer decides to revoke it, the revocation is effective as soon as the person receiving the offer becomes aware of it.
Examples of a Revocation
To better understand the concept of revocation, take the example of Byrne v. Van Tienhoven. In this case, Van Tienhoven sent Byrne a letter in which he offered to sell him some tinplates. He quickly had a change of heart and sent a second letter shortly afterward that revoked the first offer. However, Byrne had already accepted the offer, leading to a legal battle that would change the ruling on this matter forever.
Interestingly, the courts ruled that the revocation was not effective because it had not been communicated directly to Byrne. If Van Tienhoven had communicated his revocation to Byrne before he had accepted the offer, it might have been valid. He also could have used a third party to withdraw the offer for him.
Another example of revocation can be seen in Dickinson v. Dodds. Party A offered to sell his property to Party B but decided to sell it to Party C instead. Party B found out about the sale because Party D told him. This was legal, as Party A went through the revocation process legally by having Party D inform Party B about the sale.
Automatic Expiration of Offer
If an offer is not accepted in a certain period, it can lapse and lose its validity. For example, say Party A said they would sell a car to Party B. Party A said they'd give Party B 10 days to decide. After the Day 10, Party A no longer has to hold the car for Party B. Even if Party A did not specify a time, laws stipulate that the offer stay on the table for a reasonable amount.
Consider another example taken from Barrick v. Clark. Party A said they would buy land from Party B. Party B replied with a counteroffer, requesting Party A to reply as soon as possible. However, Party A took their time sending a reply, accepting the offer outside of reasonable time. Therefore, Party B was under no obligation to sell the land to Party A, because the offer had expired.
Keep in mind that if the offerer dies, the offer does not expire automatically. If the offerer's next of kin can still perform the contractual obligations, the offer is still valid.
How to Reject an Offer
There are two ways to reject an offer: communicating a rejection to the offerer and counteroffering the offerer.
When rejecting the offer, the offeree simply has to let the offerer know they don't want to take the offer. This destroys the offer. Only the offeree, not the offerer, can complete this process.
For example, say Joe said he'd sell his car to Susan. Susan wanted more information on the car before accepting, and instead of providing that, Joe sold his car to Bob. Susan decides to accept the offer before the deadline, but finds Joe has already sold the car. Susan has the right to sue Joe because she never rejected the offer.
To see how this works in a real case, look at Stevenson v. McLean. McLean made an offer to sell Stevenson some iron. Stevenson sent a telegram to McLean asking if he could pay for the iron over a two-month span. McLean never responded to the telegram and instead sold the iron to another party. Unaware, Stevenson accepted the iron offer before the deadline, but because McLean had already sold the iron, he could not deliver it. Stevenson sued McLean because he never rejected the offer.
The other way to reject an offer is through a counteroffer. The offeree will provide new terms to the offerer, which eliminate the terms of the old offer. This means they can no longer decide to accept the original offer if the offerer refuses their counteroffer.
An example of this is Hyde v. Wrench. Wrench said he'd sell his estate to Hyde for 1,000 pounds. Instead of accepting, Hyde said he would pay 950 pounds. This counteroffer nullified the original offer of 1,000 pounds.
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