Part B The law of obligations 3: Formation of contract I 45
6.3 Lapse of time
An offer may be expressed to last for a specified time. If, however, there is no express time limit set, it
expires after a reasonable time.
Ramsgate Victoria Hotel Co v Montefiore 1866
The facts: The defendant applied to the company in June for shares and paid a deposit. At the end of
November the company sent him an acceptance by issue of a letter of allotment and requested payment of
the balance due. The defendant contended that his offer had expired and could no longer be accepted.
Decision: The offer was valid for a reasonable time only and five months was too long.
6.4 Revocation of an offer
The offeror may revoke their offer at any time before acceptance. If they undertake that their offer shall
remain open for acceptance for a specified time they may still revoke it within that time, unless by a
separate contract they agreed to keep it open. This is known as an option contract.
Routledge v Grant 1828
The facts: The defendant offered to buy the claimant's house for a fixed sum, requiring acceptance within
six weeks. Within the six weeks specified, he withdrew his offer.
Decision: The defendant could revoke his offer at any time before acceptance, even though the time limit
had not expired.
Revocation may be an express statement or may be an act of the offeror. The offeror's revocation does
not take effect until the revocation is communicated to the offeree. This raises two important points.
(a) The first point is that posting a letter of revocation is not a sufficient act of revocation.
Byrne v Van Tienhoven 1880
The facts: The defendants were in Cardiff; the claimants in New York. The sequence of events was
as follows.
1 October Letter posted in Cardiff, offering to sell 1,000 boxes of tinplates.
8 October Letter of revocation of offer posted in Cardiff.
11 October Letter of offer received in New York and telegram of acceptance sent.
15 October Letter confirming acceptance posted in New York.
20 October Letter of revocation received in New York. The offeree had meanwhile resold the
contract goods.
Decision: The letter of revocation could not take effect until received (20 October); it could not
revoke the contract made by the telegram acceptance of the offer on 11 October.(b) The second point is that revocation of offer may be communicated by any third party who is a
sufficiently reliable informant.
Dickinson v Dodds 1876
The facts: The defendant, on 10 June, wrote to the claimant to offer property for sale at £800, adding 'this
offer to be left open until Friday 12 June, 9.00 am.' On 11 June the defendant sold the property to another
buyer, A. B, who had been an intermediary between Dickinson and Dodds, informed Dickinson that the
defendant had sold to someone else. On Friday 12 June, before 9.00 am, the claimant handed to the
defendant a formal letter of acceptance.
Decision: The defendant was free to revoke his offer and had done so by sale to a third party; the claimant
could not accept the offer after he had learnt from a reliable informant of the revocation of the offer to him.