Cameron Miranda
In the UK, acceptance of an offer can be terminated by revocation, rejection, lapse of time, conditional offer, operation of law, death, and illegality. Revocation refers to the retraction of an offer, which can be done at any time before its acceptance. Rejection by the offeree also terminates the offer, while a counteroffer interferes with the original offer. An offer may also lapse if it is not accepted within a certain period, and death or incapacity of either party can bring the offer to an end.
How can acceptance be terminated in UK law?
| Characteristics | Values |
|---|---|
| Revocation | Offer can be revoked at any time before acceptance. |
| Rejection | Offeror can reject the offer before it is accepted. |
| Lapse of time | If an offer is not accepted within a certain period, it can lapse and lose its validity. |
| Conditional Offer | Offers can be subjected to conditions. If such conditions are not met, the offer lapses. |
| Operation of law | Death or insanity of the proposer, if the offeree becomes aware before acceptance. |
| Death | Death of either party terminates the offer. |
| Illegality | If the offer is illegal, it is not valid. |
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What You'll Learn
Rejection by the offeree
Firstly, the offeree may reject the offer by communicating this to the offeror. Once this communication has been made, the offer is terminated, and the offeree cannot subsequently accept it. It is important to note that the offeree merely requesting further information does not constitute a rejection of the offer, and the offeror cannot withdraw the offer on these grounds.
Secondly, a counter-offer by the offeree also terminates the original offer. A counter-offer introduces a new offer to the offeror, and the original offer is then no longer valid for acceptance. After a counter-offer, the roles are reversed, with the original offeree becoming the new offeror, and vice versa.
In the case of 'Routledge v Grant', it was found that an offer could be withdrawn even if it stated that it would remain open for a fixed period, as long as this promise was not supported by any consideration given by the offeree. However, once the offeree has accepted the offer, and acted upon it, the offer cannot be revoked without breaching the contract.
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Revocation by the offeror
The revocation of an offer must be done by the offeror or someone authorised to act on their behalf. This is an important distinction, as seen in Confetti Records v Warner Music UK (2003), where an offer must be revoked by the offeror or their authorised representative. Additionally, the case of Routledge v Grant highlights that an offer may be withdrawn even if it states that it will remain open for a fixed period. However, once the offer has been accepted and acted upon, revocation is no longer possible without breaching the contract, as demonstrated in Errington v Errington.
The method of acceptance indicated by the offeror is crucial. If a specific method is indicated, only that method will be effective for acceptance. If no method is specified, acceptance can be express, through words or writing, or inferred from the offeree's conduct. For example, if the offeree receives goods on approval and starts using them, their conduct can imply acceptance. However, the offeror cannot assert that their offer has been accepted unless the offeree takes some action, as outlined in the LCA (Law of Contract Act).
In certain cases, the offeror may waive the requirement of separate communication for acceptance. For instance, if an offeror offers a reward for information, the provision of that information constitutes both acceptance and performance of the contract. This scenario is distinct from a standard contract of sale, where acceptance may be inferred through conduct or express acceptance.
It is important to note that not all agreements constitute a contract, but all contracts are agreements. An intention to enter into a legal relationship is essential for a binding contract. Social agreements, such as meeting a friend at a pub, do not typically intend to create legal relations, and thus, they are not enforceable by law.
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Lapse of time
A lapse of offer occurs when an offer is no longer valid or legally binding and, therefore, cannot be accepted. Once an offer lapses, it becomes null and void, and no contract can be formed based on that specific offer.
The Ramsgate Victoria Hotel Co v. Montefiore [1866] case indicated that Montefiore applied for shares on June 8 but was unsure whether he was successful because no one informed him. The court usually determines what a reasonable amount of time is in a dispute in which one party says the contract was terminated because of a lapse of time.
To prevent termination due to the lapse of time, parties can define the duration, monitor deadlines, request extensions if needed, document communications, and act promptly on conditional offers.
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Death of either party
In the UK, an offer can be terminated by the death of either party. The death of either the offeror or the offeree will result in termination as the right to accept an ordinary offer is not transferable. The unaccepted offer of a deceased person cannot be converted into a contract binding upon their estate. This is supported by Mellish LJ in Dickinson v Dodds, who stated that "if a man who makes an offer dies, the offer cannot be accepted after he is dead".
Additionally, in Reynolds v Atherton, Warrington LJ stated that an offer "made to a living person who ceases to be a living person before the offer is accepted... is no longer an offer at all". This highlights that once the offeree has accepted the offer, the contract is formed, and the offer is terminated.
The termination of an offer due to the death of either party is also addressed in section 6 of the Law of Contract Act. It states that an offer may be terminated by "death or insanity of the propose, if the fact of his death/insanity comes to the knowledge of the acceptor before acceptance". This provision specifically mentions death or insanity as factors that can lead to the termination of an offer.
Furthermore, the termination of an offer due to death is not limited to personal service or artistic performance contracts. While these types of contracts may immediately end upon the death of an individual, other types of offers may also be terminated due to the death of either party. The death of either the offeror or the offeree can result in the automatic termination of the offer, regardless of the nature of the contract.
In summary, the death of either party involved in an offer can lead to its termination under UK law. The right to accept an offer is not transferable upon death, and any unaccepted offers cannot be converted into binding contracts upon the estate of the deceased. This principle has been established through legal precedents and is also addressed in the Law of Contract Act. The death of either the offeror or the offeree results in the automatic termination of the offer, and the formation of a contract requires the acceptance of the offer by the offeree.
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Illegality
In the context of recent events, such as COVID-19, Brexit, and the Russia-Ukraine war, the impact of supervening illegality on commercial contracts has been analysed. For instance, sanctions imposed in response to the war may affect the ability to perform certain contracts, and parties may seek termination on these grounds.
It is important to note that termination due to illegality may also occur when a condition related to the legality of the contract is not met. This could include situations where the performance of the contract becomes illegal due to changes in laws or regulations, or where one party's actions make it impossible to perform the contract legally.
In addition, the loss of contractual capacity by either party can result in the termination of an offer or contract. This usually occurs when one of the parties is appointed by the court as incapable of fulfilling their contractual obligations.
Furthermore, the death of either party can also lead to termination. In such cases, the right to accept an offer is not transferable, and an unaccepted offer cannot be converted into a binding contract upon the estate of the deceased.
While termination due to illegality can occur in these circumstances, it is important to note that the specific laws and regulations related to contract law in the UK, including any applicable case law, should be consulted for a comprehensive understanding of this area of law.
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