Chapter 7Introduction to the law of contract4 If the offer lapses.The offeror may stipulate that the
offer is only open for a limited period of time. Once the
time limit has passed, any acceptance will be invalid.
Even if no time limit is mentioned, the offer will not
remain open indefinitely. It must be accepted within a
reasonable time.
What is a reasonable time will vary with the type of
contract.
5 Death. If the offeror dies after having made an offer
and the offeree is notified of the death, any acceptance
will be invalid. However, where the offeree accepts in
ignorance of what has happened, the fate of the offer
seems to depend on the nature of the contract. An offer
which involves the personal service of the offeror clearly
cannot be enforced, but other offers may survive, be
accepted and carried out by the deceased’s personal rep-
resentatives. If the offeree dies, there can be no accept-
ance. The offer was made to that person and no one else
can accept.
6 Failure of a condition attached to the offer.An offer
may be made subject to conditions. Such a condition
may be stated expressly by the offeror or implied by the
courts from the circumstances. If the condition is not
satisfied, the offer is not capable of being accepted.211
Erringtonv Errington(1952)A father bought a house for his son and daughter-in-law
to live in. The father paid a deposit of one-third of the
purchase price and borrowed the balance from a building
society. He told his son and daughter-in-law that if they
paid the mortgage he would convey the house to them
when all the instalments had been paid. The Court of
Appeal held that the father’s offer could not be revoked
provided the son and daughter-in-law continued to
make the mortgage payments.Soulsburyv Soulsbury(2007)In this case the Court of Appeal had to consider whether
an agreement between a divorced couple whereby the
husband agreed to leave his former wife £100,000 in
his will rather than paying maintenance of £12,000 a year
could be enforced by the courts. The husband made a
will in 1991 leaving his former wife £100,000 but shortly
before his death in 2002 he married again, which had the
effect of revoking the 1991 will. The Court of Appeal held
that the agreement was binding on the husband’s estate
and his former wife was entitled to damages. Longmore
LJ described the arrangement as a classic unilateral con-
tract of the CarlillvCarbolic Smoke Ballor the ‘walk to
York’ kind. ‘Once the promisee acts on the promise by
inhaling the smoke ball, by starting the walk to York or
(as here) by not suing for the maintenance to which she
was entitled, the promisor cannot revoke or withdraw his
offer. But there is no obligation on the promisee to con-
tinue to inhale, to walk the whole way to York or to refrain
from suing. It is just that if she inhales no more, gives up
the walk to York or does sue for her maintenance, she is
not entitled to claim the promised sum.’Ramsgate Victoria Hotel Cov Montefiore
(1866)
The defendant offered to buy shares in the claimant’s
company in June. The shares were eventually allotted in
November. The defendant refused to take them up. The
Court of Exchequer held that the defendant’s offer to
take the shares had lapsed through an unreasonable
delay in acceptance.Financings Ltdv Stimson(1962)The defendant saw a car at the premises of a dealer on
16 March. He wished to obtain the car on hire-purchase.
He signed a form provided by the claimant finance com-
pany which stated that the agreement would be binding
only when signed by the finance company. The defend-
ant took possession of the car and paid the first instal-
ment on 18 March. However, being dissatisfied with the
car, he returned it to the dealer two days later. On the
night of 24–25 March the car was stolen from the dealer’s
premises, but was recovered badly damaged. On 25
March the finance company signed the hire-purchase
agreement, unaware of what had happened. The defend-
ant refused to pay the instalments and was sued for
breach of the hire-purchase agreement. The Court of
Appeal held that the hire-purchase agreement was not
binding because the defendant’s offer to obtain the car
on hire-purchase was subject to an implied condition
that the car would remain in substantially the same state
until acceptance. Since the implied condition had not
been fulfilled at the time the finance company purported
to accept, no contract had come into existence.Acceptance
Once the presence of a valid offer has been established,
the next stage in the formation of an agreement is to find
an acceptance of that offer. The acceptance must be