In Dickinson vDoddsthe offer was expressed to be
open until Friday at 9 am. Such an offer may be revoked
before the end of the time limit, unless it has already
been accepted.
A promise to keep an offer open will be binding if it
can be enforced as a separate contract. A legally binding
option will be created if the offeree provides some con-
sideration in return for the offeror’s promise to keep the
offer open.Part 3Business transactions
210
Routledgev Grant(1828)The defendant offered to buy the claimant’s house,
giving the claimant six weeks to consider the proposal.
It was held that the defendant could withdraw the offer
at any time before acceptance, even though the deadline
had not yet expired. The claimant’s attempt to accept
the offer after it had been withdrawn was ineffective.An offer may be revoked by a second, subsequent
offer. However, the second offer must be sufficiently at
odds with the first offer so that both cannot be accepted.
Pickfords Ltdv Celestica Ltd(2003)As Dyson LJ stated in the opening remarks of his
judgment in the Court of Appeal: ‘it is as if the facts of
this case have been devised for an examination question
on the law of contract for first year law students.’
The claimant P, a removal company, had been ap-
proached by the defendant C, an IT company, concerning
a proposed move of workshop and office equipment
from Stoke-on-Trent to Telford. On 13 September 2001,
P sent a fax to C, offering to carry out the work at a rate
of £890 per load (excluding VAT) plus extras for insur-
ance etc. P calculated that it would take 96 loads to
complete the move, giving rise to an estimated budget
figure of £100,000. During the next fortnight P carried
out a more detailed survey of the proposed move and on
27 September sent a further more detailed document
to C in which it was stated that P would carry out the
work for a fixed price quotation of £98,760. A copy of
P’s standard terms and conditions were enclosed. On
15 October 2001, C sent a fax to P headed ‘Confirmation’
which stated that an order had been raised to cover the
quotation and that the cost was not to exceed £100,000.
P carried out the work and claimed the fixed sum of
£98,760. C paid only £33,000.
The Court of Appeal applied the following analysis to
the sequence of events.
1 13 September fax from P to C was an offer to carry out
the work for a fixed price per vehicle load (the first
offer).2 27 September proposal from P to C was an offer to
carry out the work for a fixed overall price of £98,760
(the second offer). The court took the view that this
second offer superseded the first offer and had the
effect of revoking the first offer. Its reasons for reach-
ing this conclusion were that the basis for calculating
the price was quite different in the two offers; the sec-
ond offer contained more detail than the first offer and
included P’s standard terms and conditions.
3 C’s fax of 15 October purported to be an accept-
ance of the first offer. However, as this offer had been
revoked, it could not be accepted. C’s fax was a
counter-offer, which P accepted by carrying out the
removal. Even if the first offer had not been revoked
C’s fax would have been a counter-offer as it included
a new term limiting the overall cost to £100,000.Mountfordv Scott(1975)The purchaser of a house paid the seller £1 for an option
to buy, exercisable within six months. The Court of
Appeal held that the seller could not withdraw the offer
before the option expired.The Law Revision Committee recommended in 1937
that a promise to keep an offer open for a definite period
of time or until the happening of a specific event should
be binding even if there is no consideration for the
promise. In 1975 the Law Commission made a similar
recommendation but limited to promises made ‘in the
course of a business’.
The effect of revocation in the case of a potentially
‘unilateral’ contract, such as in Carlill’s case, is not
straightforward. Where the offer has been made to the
whole world, as, for example, where a reward has been
offered in a newspaper for the return of a lost dog,
a revocation will probably be effective as against anyone
who has yet to start looking for the dog, provided it is
given the same publicity as the original offer of the
reward. However, if someone has started to perform the
act requested in the offer, the offer cannot be revoked.