General Principle:
Revocation of an offer must be communicated and is effective upon its receipt.
Byrne & Co v Leon Van Tienhoven & Co (1880) LR 5 CPD 344
Facts:
Byrne posted a letter on 1st October, with an offer to sell Van Tienhoven a certain amount of tinplate. Byrne then posted another letter on 8th October intended to be a statement to withdraw the offer. The first letter reached Tienhoven on 11th October and Tienhoven accepted the offer immediately through use of a telegram. They followed this up with a confirmatory letter four days later. The second letter sent by Byrne as a withdrawal arrived on 20th October, by which time the offer had been accepted.
Ratio:
The court ruled that a Bryne’s revocation was not valid until it was received by Van Tienhoven, thus a contract had formed when Van Tienhoven telegrammed his acceptance.
Application:
These kinds of promises cannot be enforced unless they are supported by some kind of consideration (something of value like money) in return (see relevant section on consideration).
Analysis:
Margaret offered the asking price in a telephone message. Adam then wrote a letter accepting the offer made by Margaret and posted it via 2nd class post. The postal rule was laid down in Adams v Lindsell (1818) 1 B & Ald 681. Where post is considered to be an appropriate form of communication, then acceptance will take place once a letter of acceptance is appropriately posted. There are two reasons why there is a binding contract between Adam and Margret. First Adams revocation of his acceptance was posted subsequently to the acceptance and the acceptance has taken place through the postal rule. Second Margaret received the letters on Thursday and opening the first letter from Adam. This means the revocation has come after the acceptance. The authority for this is Byrne v Van Tienhoven (1880) LR 5 CPD 344 where an offeror posted a letter on 1 October offering to sell the offeree a quantity of tinplate, then later on the 8th October another letter was sent out withdrawing the prior offer. The first offer was received on the 11th October to Plaintiff where they immediately accepted the offer by the use of telegram, which was followed by a confirmation letter 4 days later. By the time the second letter arrived by post on the 20th October withdrawing their previous offer, the offer has already been successfully accepted and therefore too late for the defendant to withdraw. Thus Adam is bound to Margaret and he would have a potential claim for the car and can sue for breach of contract.
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