46 3: Formation of contract I Part B The law of obligations
However, this case should be treated with caution and it may be that only an agent can revoke an offer.6.5 Failure of a condition
An offer may be conditional in that it is dependent on some event occurring or there being a change of
circumstances. If the condition is not satisfied, the offer is not capable of acceptance.Financings Ltd v Stimson 1962
The facts: The defendant wished to purchase a car, and on 16 March signed a hire-purchase form. The
form, issued by the claimants, stated that the agreement would be binding only upon signature by them.
On 20 March the defendant, not satisfied with the car, returned it. On 24 March the car was stolen from
the premises of the dealer, and was recovered badly damaged. On 25 March the claimants signed the
form. They sued the defendant for breach of contract.
Decision: The defendant was not bound to take the car. His signing of the agreement was actually an offer
to contract with the claimant. There was an implied condition in this offer that the car would be in a
reasonable condition.6.6 Termination by death
The death of the offeree terminates the offer. The offeror's death terminates the offer, unless the offeree
accepts the offer in ignorance of the death, and the offer is not of a personal nature.Bradbury v Morgan 1862
The facts: X offered to guarantee payment by Y in respect of goods to be supplied by the claimant. X died
and the claimant, in ignorance of his death, continued to supply goods to Y. The claimant then sued X's
executors on the guarantee.
Decision: X's offer was a continuing commercial offer which the claimant had accepted by supply of goods
after X's death. The guarantee stood.7 Acceptance
Acceptance must be an unqualified agreement to all the terms of the offer. Acceptance is generally not
effective until communicated to the offeror, except where the 'postal rule' applies. In which case
acceptance is complete and effective as soon as it is posted.Acceptance may be defined as follows.
'A positive act by a person to whom an offer has been made which, if unconditional, brings a binding
contract into effect.'The contract comes into effect once the offeree has accepted the terms presented to them. This is the
point of no return; after acceptance, the offeror cannot withdraw their offer and both parties will be bound
by the terms that they have agreed.
Acceptance may be by express words, by action or inferred from conduct.FAST FORWARDKey term