Byrne & Co v. Van Tienhoven & Co (1880) 5 CPD 344, Common Pleas Division
The defendants, who carried on business in Cardiff, offered by letter on October 1 to sell tin[1]plate to the plaintiffs at a fixed price. The plaintiffs were in New York and they did not receive the letter until 11 October. They immediately communicated their acceptance by telegram. There was a surge in the price of tinplate in the first week in October and so on 8 October the defendants sent to the plaintiffs a letter in which they withdrew their earlier offer. This second letter was not received in New York until 20 October. The plaintiffs sued for damages for non-delivery of the tinplate. The defendants denied liability on a number of grounds, one of which was that they had validly revoked their offer before it was accepted by the plaintiffs.
It was held that the revocation of 8 October was ineffective on that date with the result that the plaintiffs were entitled to accept the offer on 11 October and so they were entitled to recover damages from the defendants.
Lindley J
There is no doubt that an offer can be withdrawn before it is accepted, and it is immaterial whether the offer is expressed to be open for acceptance for a given time or not: Routledge v. Grant (1828) 4 Bing. 653. 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, I am aware that Pothier and some other writers of celebrity are of opinion that there can be no contract if an offer is withdrawn before it is accepted, although the withdrawal is not communicated to the person to whom the offer has been made. The reason for this opinion is that there is not in fact any such consent by both parties as is essential to constitute a contract between them. Against this view, however, it has been urged that a state of mind not notified cannot be regarded in dealings between man and man; and that 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 Tayloe v. Merchants Fire Insurance Co 9 How Sup Ct Rep cited in Benjamin on Sales, pp. 56–58, and it is adopted by Mr Benjamin. The same view is taken by Mr Pollock in his excellent work on Principles of Contract, edn ii., p. 10, and by Mr Leake in his Digest of the Law of Contracts, p. 43. This view, moreover, appears to me much more in accordance with the general principles of English law than the view maintained by Pothier. 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 the 1st of October, the withdrawal was posted on the 8th, and did not reach the plaintiff until after he had posted his letter of the 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 (1872) LR 7 Ch 587; Dunlop v. Higgins (1848) 1 HLC 381, 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 the 8th of October is to be treated as communicated to the plaintiff on that day or on any day before the 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 the 8th of October of their offer of the 1st was inoperative; and a complete contract binding on both parties was entered into on the 11th of October, when the plaintiffs accepted the offer of the 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.