LECTURE 4 5th Nov 2011 - LECTURE 4 SATURDAY 5TH NOVEMBER...

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LECTURE 4: SATURDAY 5 TH NOVEMBER 2011 – 8.00AM-11AM – SHERIA HALL TERMINATION AND LAPSE OF CONTRACT In order for there to be a valid acceptance there must be an offer to which that acceptance is a response. This principle requires not only that an offer has been made but that it is in existence at the time of the acceptance. An offer may come to an end in a number of ways. Revocation Rejection (explicitly or by counter-offer) Termination (lapse of time) Death Condition bringing an offer to an end. a) REVOCATION It is possible for the offeror to revoke the offer at any time up until acceptance. Note that it makes no difference that the offeror has promised to keep the offer open by an 'option'. This will be revoked along with the original offer unless there is a binding contract to keep it open; Because there is no legal commitment until a contract has been formed, either either party may change their mind and withdraw from the negotiations , In situations where an offeror has stipulated that the offer will be valid for a certain period of time, he or she can withdraw within this time period CASE EXAMPLE Change of Mind Routledge vs. Grant (1828) Grant wanted to buy Routledge's house and said he would keep the offer open for 6 weeks. Before the expiration, Grant withdrew and caused damage to Routledge as he had bought a new house to leave the old house. The court said offe rer can revoke offer any time before acceptance. Withdrew early, legitimate as no acceptance had occurred. Revocation is ineffective unless it has been communicated to the offeree and it is effective, if by post, when it arrives; Communication of Revocation The basic requirement is that a revocation requires communication to the offeree of the fact that the offer is no longer open. Under the postal rule, although an acceptance is effective upon posting - a revocation is only effective UPON RECEIPT.
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CASE EXAMPLE Byrne vs. Van Tienholven 1880 The defendants, who carried on business in Cardiff, wrote to the claimants, whose office was in New York, offering to sell certain goods at a fixed price. On the day on which they received the offer the claimants tele graphed their acceptance, but three days previously the defendants had sent a letter withdrawing the offer, this did not arrive until after the acceptance had been confirmed by post. The claimants sought damages for breach of contract. It was held that the offer was accepted when the telegraph was sent and therefore the defendant could not revoke the offer without being in breach of contract. The court took the view that a revocation is not effective prior to its communication, and that the posting of a le tter of revocation does not constitute communication of it.
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