Contract law by Richard Stone

By Richard Stone

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Extra resources for Contract law

Example text

Even though the postal rule does not apply, Laura would at first sight appear to have a binding contract, in that her letter is received by Michael two hours before the 11 am deadline. At this point, however, a complication arises. Michael has changed his mind about the contract, and has tried to withdraw. His letter of revocation is received by Laura half an hour before her letter of acceptance is received by Michael. Is his withdrawal effective? The normal rule about revocation of offers is that they will be effective provided they are communicated before the acceptance has taken effect (for example, Dickinson v Dodds (1876)),6 and that this is so even if the offeror has said that the offer will be kept open for a particular time (Routledge v Grant (1828)).

It is felt that businesses in particular will favour clarity about the legal rules which will apply to their transactions in general over flexibility which might lead to a more ‘just’ solution on particular facts. Such unpredictability is thought to be undesirable. The major disadvantage of the traditional approach is, however, that, applied strictly, it will be likely to lead in a ‘battle of the forms’ case to an answer which neither party would advocate—that is, that there was no contract at all.

Subsidiary issues are the status of offers in advertisements and the possibility of the revocation of an offer in a unilateral contract. Part (b): here, the issues are the question of acceptance by silence, communication of acceptance, communication of the revocation of an offer, particularly where it has been indicated that it will remain open until a particular date, and recall of a posted acceptance. Answer Part (a) In order to advise Peter, it is necessary to consider the status of the advertisement placed by Jane, that is, whether it is an offer or an invitation to treat, and, if it is an offer, whether it matters that Peter was ignorant of it at the time he found the bike.

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