(1880) 5 CPD 344
Common Pleas
On 1 October Tienhoven wrote from Cardiff offering to sell 1,000 boxes of tinplate to Byrne at New York. Byrne received the offer on 11 October and accepted it by telegram on the same day, and by letter on 15 October. On 8 October Tienhoven posted a letter to Byrne withdrawing the offer because there had been a 25% price rise in the tinplate market. This letter reached Byrne on 20 October. The issue before the court was whether a contract had been formed on 11 October when Byrne had sent the telegram or whether Tienhoven's offer of 11 October had been revoked on 8 October when Tienhoven had posted the letter of revocation.
Lindley J
These letters and telegram [both of 11 October] would, if they stood alone, plainly constitute a contract binding on both parties... The defendants, however, raise... [a defence] to the action which remain[s] to be considered... [T]hey say that the offer made by their letter of 1 October was revoked by them before it had been accepted by the plaintiffs by their telegram of 11th or letter of 15th...
There is no doubt that an offer can be withdrawn before it is accepted, and it is immaterial whether the offer is expressed to be open for acceptance for a given time or not: Routledge v Grant. For the decision of the present case, however, it is necessary to consider two other questions, viz: 1. Whether a withdrawal of an offer has any effect until it is communicated to the person to whom the offer has been sent? 2. Whether posting a letter of withdrawal is a communication to the person to whom the letter is sent?
It is curious that neither of these questions appears to have been actually decided in this country. As regards the first question... an uncommunicated revocation is for all practical purposes and in point of law no revocation at all. This is the view taken in the United States: see Taylor v Merchants Fire Insurance Co cited in Benjamin on Sales, and it is adopted by Mr Benjamin. The same view is taken by Mr Pollock in his excellent work on Principles of Contract, ed ii, and by Mr Leake in his Digest of the Law of Contracts... I pass, therefore, to the next question, viz, whether posting the letter of revocation was a sufficient communication of it to the plaintiff. The offer was posted on 1 October, the withdrawal was posted on 8th, and did not reach the plaintiff until after he had posted his letter of 11th, accepting the offer. It may be taken as now settled that where an offer is made and accepted by letters sent through the post, the contract is completed the moment the letter accepting the offer is posted: Harris' Case; Dunlop v Higgins, even although it never reaches its destination. When, however, these authorities are looked at, it will be seen that they are based upon the principle that the writer of the offer has expressly or impliedly assented to treat an answer to him by a letter duly posted as a sufficient acceptance and notification to himself, or, in other words, he has made the post office his agent to receive the acceptance and notification of it. But this principle appears to me to be inapplicable to the case of the withdrawal of an offer. In this particular case I can find no evidence of any authority in fact given by the plaintiffs to the defendants to notify a withdrawal of their offer by merely posting a letter; and there is no legal principle or decision which compels me to hold, contrary to the fact, that the letter of 8 October is to be treated as communicated to the plaintiff on that day or on any day before 20th, when the letter reached them. But before that letter had reached the plaintiffs they had accepted the offer, both by telegram and by post; and they had themselves resold the tin plates at a profit. In my opinion the withdrawal by the defendants on 8 October of their offer of the 1st was inoperative; and a complete contract binding on both parties was entered into on 11 October, when the plaintiffs accepted the offer of 1st, which they had no reason to suppose had been withdrawn. Before leaving this part of the case it may be as well to point out the extreme injustice and inconvenience which any other conclusion would produce. If the defendants' contention were to prevail no person who had received an offer by post and had accepted it would know his position until he had waited such a time as to be quite sure that a letter withdrawing the offer had not been posted before his acceptance of it. It appears to me that both legal principles, and practical convenience require that a person who has accepted an offer not known to him to have been revoked, shall be in a position safely to act upon the footing that the offer and acceptance constitute a contract binding on both parties.