Termination of an offer can be divided into five categories: withdrawal by offeror, rejection by offeree, lapse of time, failure of a condition subject to which the offer was made and by death.

An offer can be withdrawn at any time prior acceptance[1], this is even the case where the offeror has promised to keep the offer open for a period of time (except the offeree has provided consideration in the eyes of law). Please keep in mind that revocation of an offer is only effective to be communicated to and received by the offeree.[2] Such revocation can also be withdrawn by a third party, provided such withdrawn are from a reliable source.[3] If the offeror wishes to withdraw offer to world at large, the offeror should use the same method as they did to advertise the offer to make such withdrawn to be valid. On the other hand, in unilateral contracts, such offer may not be withdrawn after the promise has begun to perform the necessary condition to fulfill the contract.[4] Nevertheless in the case of Mobil Oil Australia Ltd v Lyndel Nominees Pty Ltd[5] indicates that this legal principal is not clear as there is no clear expression made by the Federal Court that an offeror could not be revoked after acceptance had commenced.

The other type of revocation is rejection by offeree. Once the offeree rejects, such offer would be terminated and cannot be accepted at later stage.[6] Nevertheless, such rejection must be made to the offeror for such rejection to be effective. Mere request for information or to clarity certain terms would not be considered as a rejection of the original offer.[7]

For lapse of time, the offeror can illustrate a time for such offer to be valid, for which the offer will lapse within a reasonable time after the offer has been made.[8] Such offer can also be expressly or impliedly subject to conditions, failure of a condition for which the offer was made, the offer will cease accordingly.[9] Nevertheless, effect of death by one of the parties before acceptance of the offer is not entirely settled. The outcome may differ depending whether it is the offeror or offeree who has passed away. There are also some other factors to be considered such as: intention of the parties, subject matter of the contract and whether such offer was granted with an option. If during the offer, such offer was made in the condition that such offer is to be made and could be accepted notwithstanding the death of the offoror or offerree, such agreement can still be possibly made. However if such offer is to do with personal services, agreement can never be possibly made as the parties could not have intended to exercise such agreement following death.

Acceptance can be any forms of expression, by words or conduct, of the assent to the terms of the offer in the manner prescribed or illustrated by the offer. Nevertheless, a person cannot accept an offer for which has not been communicated.[10] There are two elements that must be fulfilled for an acceptance to be valid. Offeree must intend to accept the offer and the intention to accept must also be communicated to the offeror. This is the case where offeree must aware, having knowledge of, and act in reliance on the offer.[11] However if a person intended to accept an offer but introduces new terms which wasn’t included in the offer, would only be considered as a counter-offer of his or her own and won’t be considered as a valid contract.[12]

 

[1] Goldsborough Mort & Co Ltd v Quinn [1910] 10 CLR 674.

[2] Byrne & Co v Leon Van Tien Hoven & Co [1880] 5 CPD 344.

[3] Dickinson v Dodds (1876) 2 Ch D 463.

[4] Errington v Errington Woods [1952] 1 KB 290.

[5] [1988] FCA 205.

[6] Stevenson, Jaques, & Co v McLean [1880] 5 QBD 346.

[7] Ibid.

[8] Ramsgate Victoria Hotel v Montefoire (1866) LR 1 Ex 109.

[9] Gilbert J McCaul (Australia) Pty Ltd v Pitt Club Limited (1957) 59 SR(NSW) 122.

[10] Taylor v Laird (1856) 1 H & N 266.

[11] Tinn v Hoffman & Co. [1873] 29 LT 271.

[12] Turner Kempson & Co v Camm (1922) VLR 498.

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