Lapse of time very few offers are completely open

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Lapse of time Very few offers are completely open-ended — in the sense that they can be accepted at any time unless and until they are revoked. Such offers do exist, they are called standing offers and they remain open until they are formally withdrawn. Most offers, however, come to an end either when the time the offeror has stipulated as the time within which they must be accepted expires, or when a reasonable time elapses without acceptance occurring. The rules are simple. If the offeror stipulates a time within which the offer must be accepted, the offer will automatically terminate once that time expires. If the offeror does not stipulate a particular time the offer will automatically expire once ‘a reasonable time’ has elapsed. What a ‘reasonable time’ is, is a question of fact and it will always depend on a number of considerations. They include the nature of the subject matter (especially if it is perishable — in which case a ‘reasonable’ time will be relatively short) and any sense of urgency (or lack of urgency) which the offeror communicated to the offeree. Change of circumstances Offers are often made on the assumption that the circumstances under which they are made will remain unchanged. If continuation of the existing set of circumstances was clearly intended as a condition to the offer continuing, the offer will automatically terminate if those circumstances change. For example, in Financing’s Ltd v Stimson [1962] 3 All ER 386, Stimson offered to buy a car from a finance company. Before the company accepted
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© Stephen Graw 2012 Stimson’s offer the car was stolen and badly damaged. Stimson refused to accept delivery of the now damaged vehicle and also refused to make any of the agreed payments. The finance company sued — and lost. Stimson had clearly intended that his offer to buy the car would only remain open while the vehicle was in substantially the same condition as it was when the offer was made. Because the vehicle’s condition had changed substantially before the company ‘accepted’ his offer, the offer had lapsed and could not be accepted. Failure of a condition If someone makes an offer stating that it can only be accepted if certain prerequisite conditions are met then, if those prerequisite conditions are not met, the offer cannot be accepted. Such conditions are called conditions precedent and they may be either precedent to the contract itself or precedent to its performance. For example, in McCaul v Pitt Club Ltd (1959) SR (NSW) 122 the contract, a lease, contained an option to renew (this was the ‘offer’). That option was exercisable upon two conditions — that the tenant give the landlord three months’ notice of its intention to renew and that it have also paid the rent punctually during the lease’s initial term. The tenant had often paid its rent late and, when it tried to exercise the option, the landlord refused to renew. The tenant sued — and lost. Because it had not met the condition precedent (due
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