IntroductionSir William Anson stated in his book,Principal of the Law of Contract,he definded contract as a legally binding agreement made between two or more parties, by which rights are acquired by one or more to act or forbearances on the part of the other or others.This means that in order to make a valid contract, there must be the presence of all legal elements to constitute the presence of the contract. One of the legal elements are offer and acceptance. Offer is expression of willingness to contract on certain terms did with the intention that it shall become binding as soon as it is accepted by the perseon to whom it address to. Where as acceptance is an invitation expressed or implied by the offeree made whilst the offer remains open and in the manner requested in that offer of the offree¶s willingness to be bound unconditionally to a contract with the offeror on the terms stated in the offer. However,an offer can be terminated by several reasons that is stated below :1- End of specified time 2- End of reasonable time 3- Failure of a precondition 4- Rejection 5- Counter offer 6- Death of offeror 7- Death of offeree 8- Withdrawal 1 Where the parties negotiate by methods that are not immediate. paying a deposit into their bank. and asked to pay the balance due on them. In Ramsgate Victoria Hotel v Montefiore (1866) Montefioree applied for shares in the plaintiff company. 2 .End Of Specified Time Very few offers are so completely open-ended that they can be accepted at any time unless expressly revoked. securities. After hearing nothing from the company. Generally. Therefore the offer had lapsed before the company tried to accept it.standing offers can be subject to time limitations in exactly the same way as all other offers).If the offeree¶s intention is to accept after the specified time.Such offers do exist and they are called ³standing offers´(although. and the court upheld his argument that five months was not a reasonable lenght of time for acceptance of an offer to buy shares. the offer will probably persist for a longer time. He refused to do so. which are a commodity with rapidly fluctuating price. or goods that fluctuate rapidly in price. he was then informed that the shares had been allotted to him.the offer automatically terminates unless it is accepted before the time of the contract lapsed.it will lapse after a reasonable lenght of time has passed.the socalled acceptance is not an acceptance at all and it cannot bind the offeror. particularly when the contemplated transaction involves a fixed price. a reasonable time is normally very short. in negotiations face-to-face or by telephone or other immediate forms of communication the offer is terminated when the parties discontinue negotiations.strictly speaking. and there was no contract between them.Time can terminate offers in two instance Where the offeror expressly imposes a time limit An offeror can always specified a time by which the offer must be accepted if it is to be accepted at all. Dickinson v. Where contracts involve the purchase or sale of commodities. A reasonable time is determined by the circumstances. Dodds case is an example of just that occuring.If a time specification is imposed . Reasonable Lenght Of Time Where the offeror has not given the specified exactly how long the offer will remain valid. Particular problems occur where an offeree has to satisfy some condition before he or she can accept the offer and. acceptance is impossible because the condition precedent to the right to accept has not been fulfilled. The defendant signed the plaintiffs¶ form. which was subject to the implied condition that the car remained in much the same state as it was in when the offer was made. If the condition is not fulfilled. As the implied condition had been broken by then.which stated that the agreement would be binding on the finance company only when signed on their behalf. until that offer was accepted. In such cases. The plaintiff were claiming that they had accepted the offer by signing the document on 24 March. The defendant then buys the car from the finance company (the plaintiffs). as the so-called µagreement¶ was really an offer to make a contract with the plaintiffs. who pays instalments.Failure Of A Precondition It is quite clear that offers can be made subject to stipulated conditions. if the condition is not waived. On 18 March the defendant paid the first instalment of £70. the offer was no longer open so no contract had been concluded 3 . there is nothing the offeree can do. The Court of Appeal ruled in favour of the defendant. The that the hire-purchase works is that the finance company buys the car outright from the dealer. the offer lapses (unless the offeror agrees to waive the condition). and then sells it back at the buyer. In Financing Ltd v Stimson (1962) the defendant saw a car sale at £350 by second-hand car dealer on 16 March. They lateer sued the defendant for failure to pay the instalments. Not knowing this. He decided to buy it on hire-purchase terms. ³subject to zoning approval´ and so on. On 24 March the car was stolen from the dealer¶s premises. on 25 March the plaintiffs signed the written µagreement¶. doesnot meet the condition. trough inadvertence or otherwise. Common examples include ³subject to finance´ . and the plaintiff responded by offering to buy it at £950 ± this is called making a counter offer. Counter Offer A counteroffer is a communication by the offeree that proposes to add. which creates a new power of acceptance in the party that had been the offeror. In Hyde v Wrench (1840) the defendant offered to sell his farm for £1.Rejection An unequivocal rejection by the offeree of the terms of the offer will terminate the power of acceptance. it is functionally equivalent to a rejection of the original offer and the creation of a new offer. The farm owner refused to sell it at that price. or option contracts. and then only to the extent to avoid injustice. this is also known as a conditional acceptance. it was held that this was no longer available. An offeree need not intend for his or her communication to be a counteroffer. or modify the terms of the offer. Under irrevocable offers. 4 . but is not obliged to do so. a rejection will not terminate the power of acceptance unless reasonably relied on by the offerer in good faith. subtracts. When a counteroffer consists of changes to the terms of the original offer (rather than a proposal of completely new terms).000. and when the plaintiff later tried to accept the offer to buy it at £1. or modifies the terms of the offer is a counteroffer. a communication by the offeree that purports to be an acceptance but adds. subtract. In this situation the offeror can make a new offer on exactly the same terms.000. Thus. it had been terminated by the counter offer. for example : Fong v Cili (1968) 11 FLR 495 Facts : The vendor and one of two joint purchasers of a parchel of land signed the contract of sale but. continued giving the son credit. a valid contract can arise and the deceased¶s estate can be bound. where the offeree is unaware of the death. Morgan. See. 5 . Joseph Leigh then died. but the plaintiffs. This however. the offer had already lapsed and could not be accepted However. Hold : The estate was liable. If the offer requires that. because the continued existence of the offer was really only dependant upon the continuation of the credit arrangement ± not the continued life of the deceased. on the guarantee.even though he knew of the vendor¶s death ± and the purchasers tried to enforce the contract against the deceased¶s estate. it appears that valid acceptance is possible. 158 ER 877 Facts : Joseph Leigh wrote to the plaintiffs. Because the second purchaser had known of the deceased¶s death when he signed the contract. The guarantee could continue after death. When the son defaulted in payment the plaintiffs sued Leigh¶executor. the vendor died. before the other joint purchaser could sign. it cannot be accepted and no contract arises. The plaintiffs extended credit on the basis. Held : They failed. presupposes that the offer does not involve or require personal performance by the deceased. at least until the plaintiff had notice of it. requesting them to give credit to his son and guaranteeing payment of the running balance of the account up to £100. Morgan denied liability. The other purchaser then signed . in ignorance of the fact. Notice terminates the offer. arguing that the debt arose out of transactions entered into after Leigh¶s death. See. for example : Bradbury v Morgan (1862) 1 H & C 249.Death of the offeror It is quite cleare that an offeree cannot accept an offer after he or she has notice of the offeror¶s death. This presumption will not always accord with the facts.Death of the Offeree The general rules concerning the effect of the death the offeree was laid down in Reynold v Atherton (1921) 125 LT 690.for instance: Carter v Hyde (1923) 33 CLR 115 Facts: Carter gave Hyde and option to buy certain premises. the offer remain open for a period of three months.´ The problem with this rule is that it presupposes that all offer are personal to the offeree and are not intended to capable of acceptance by the estate.The offer not intended to be made to a deead person or to his executors.The relevent part of Warrington LJ¶s jugdement reads (at 695): ³I think it would be more accurate to say that the offer having been made to a living person who are ceases to be a living person before the offer is accepted.his executors exercised the option. Held: As the option was not intended to be that was personal to Hyde. arguing that the offer had lapsedon Hyde¶s death. and if the parties intend that the offer be acceptable by the offeree¶s estate. Carter was bound to sell.there is no longer an offer at all. 6 . and the offer ceases to be an offer capable of acceptance.then the death will not terminate it. See. it could be exercised by his executors for the benefits of his estate. before three months expired. Carter disputed their right to do so.Hyde died but. Was the revocation effective or was there abinding contract? Held : While an offer can be revoked at any time before acceptance. When the plaintiffs had not replied by 8 October . for instace: Payne v Cave (1789) 3 TR 148. but before they were knocked down to him. a revocation is not effective until it has been communicated to the offeree. his offer had terminated and the auctioneer could not accept. he or she can accept the offer and any such acceptance will create a valid and binding contract. the revocation was not effective until 20 October. Until the offeree becomes aware of the revocation. Accordingly. who had cable an acceeeptance on 11 October. for instance: Byrne v van Tienhoven (1880) 5 CPD 344 Fact : On 1 October the defendants wrote to the plaintiffs offering to sell them a quantity of tin plate and suggesting a reply by cable. Held : A bid is merely an offer and it may be revoked at any time prior to acceptance. the offer comes to an end. Acceptance at auction s occurs on the fall of the hammer.the defendants wrote erevoking their offer. See. It follows from this that an offer can be revoked at any time before acceptance. by which time the defendants¶ offer had been validly accepted. an enforceable contract had arisen on 11 October 7 .Withdrawal Withdrawal of offer The withdrawal of an offer is sometimes described as the revocation of an offer. any revokation must be communicated to the offeree before it becomes effective. did not recieve that letter until 20 October. and as the defendant had withdrawn his bid before that happened. Withdrawal must be communicated Like the offer itself. and thereafter it cannot be accepted. 100 ER 502 Facts : The defendant bid £40 for goods that were being auctioned. Here. Once revoked. The plaintiffs. See. The question is was whether he could withdraw the bid in this fasion. he withdraw his bid. 8 . attempted to accept Dodd¶s offer by handing him a formal acceptance. The offeror need not to give notice of revocation personally for it to be effective because the oofer had already been revoked by the communication from the fourth man. His letter stated that the offer was ³to be left over until Friday. Dodds sold the house s to a third party on Thursday. before 9 am on Friday morning.so there was no contract. 9am´. for instance: Dickinson v Dodds (1876) 2 Ch D 463 Facts : On Wednesday Dodds offered to sell Dickinson some houses for £800. See.The revocation of an offer does not have to be communicated by the offeror. Despite this. Dickinson heard of this sale from a fourth peerson on Thursday evening and. Held : The acceptance was invalid. the communication can be made by some other reliable sources. CONTENTS 9 .