CH. II. s. 1. Waiver of Right of either party to retract. Death. Dickinson v. Ratification, after withdrawal, of agent's acceptance. Offer cannot be accepted after knowledge of contract with another person. Where a vendor by a memorandum expressed his willingness to sell a lease "subject to the preparation by his solicitor and completion of a formal contract," which memorandum the purchaser signed as "accepted," but afterwards repudiated the contract, it was held that the vendor could not waive the stipulation for a formal contract as being intended for his benefit alone, so as to constitute the rest of the memorandum a final contract enforceable against the purchaser by decree for specific performance (e). Until both parties are agreed, each has a right to withdraw from the negotiation; so that a party is not only not bound by a mere offer not accepted, but, before it is accepted, he may retract his offer, by giving notice to that effect to the person to whom the offer was made (ƒ). Thus, in Routledge v. Grant (g), where the defendant offered, in writing, to purchase of the plaintiff the lease of a house, provided possession were given on the 25th July, and a definite answer within six weeks; and the plaintiff, in answer, offered to give possession on the 1st August; whereupon the defendant, before the six weeks had expired, retracted his offer:-it was held there was no contract, the defendant's offer having been withdrawn before it was accepted by the plaintiff (h). "It is admitted law," observed Mellish, L.J., in Dickinson v. Dodds, "that if a man who makes an offer dies, the offer cannot be accepted after he is dead" (i). It is a rule of law that ratification of an agent's unauthorised acts relates back to the act ratified. Therefore, where an agent without authority accepted an offer, which the party offering afterwards withdrew before ratification by the principal, it was held that the ratification by the principal related back to the acceptance so as to bind the party offering notwithstanding his withdrawal (k). If an offer has been made for the sale of property, and, before that offer is accepted, the person who made it agrees to sell the property to somebody else; and the person to whom the first offer was made receives notice, in some way, that the property has been sold to another; he cannot, after that, make a binding contract, by accepting the offer which was made to him (1). (e) Lloyd v. Nowell, [1895] 2 Ch. 744, per Kekewich, J., distinguishing the very Special Hawksley v. Outram, [1892] 3 Ch. 359, C. A. (f) Byrne v. Van Tienhoven (1880), 5 C. P. D. 344. (g) Routledge v. Grant (1828), 4 Bing. 653. (h) See also Holland v. Eyre (1825), 2 Si. & St. 194. (i) Dickinson v. Dodds, infra (1). (k) Bolton Partners v. Lambert (1888), 41 Ch. D. 295, C. A.; and see post, Ch. IX., sect. 1. (2) Per Mellish, L.J., Dickinson v. Dodds (1876), 2 Ch. D. 463, 474, C. A. (b) Contract by Letter through Post. CH. II. s. 1. Requisites of Contract (Assent). tinuance of Lindsell. If an offer be made by letter to a party at a distance, it is presumed to be constantly repeated until the period for acceptance Presumption arrives, up to which period it is to be inferred that there is a as to concontinuation of the intention to contract; and that the acceptance intention to of the exact terms proposed, within the period limited, shall form contract. a complete contract as from the date of such acceptance, provided the party making the offer has not in the interim withdrawn it. Thus in Adams v. Lindsell (m), the defendant, by letter, offered Adams v. to sell wool to the plaintiff, receiving his answer in course of post. The letter to the plaintiff having been misdirected, was not received by him until two days later than it ought to have been; but he answered it in course of post, agreeing to accept the wool. The defendant, however, had on the previous day sold the wool to another person, whereupon the plaintiff sued him for non-delivery: and it was held that the action lay, because the contract had been completed by the plaintiff's acceptance of the defendant's offer, and, as the delay in certifying the acceptance arose entirely from the defendant's mistake, the plaintiff's letter must be taken, as against him, to have been received in course of post. And the Contract same rule that a contract is completed by the posting of a letter accepting the proposal for it, was recognised and acted upon in the House of Lords, in the Scots case of Dunlop v. Higgins. There A. B., of Glasgow, offered, by letter, to sell to C. D., of Dunlop v. Liverpool, a quantity of iron on certain terms. By the usage of Higgins. the trade, C. D. was bound to accept or refuse the offer by return of post; and he did, in fact, write and post a letter accepting it in due time. By an accident connected with the transmission of the letter by the post-office, however, this letter did not reach A. B. until one post later than it ought; and he therefore treated C. D.'s letter as no acceptance; but Lord Cottenham, L.C., held, that C. D.'s acceptance of the offer was complete, and that A. B. was bound to fulfil the contract (n). In the above case, the accepting letter was merely delayed in arrival. It has been since held by the Court of Appeal to follow, in Household Fire Insurance Co. v. Grant, where notice of allotment of shares was sent in reply to an application for them, that where the party making the proposal expressly or impliedly authorises the employment of the post as a means of communicating the acceptance, as where a proposal made by letter is accepted by letter, the (m) Adams v. Lindsell (1818), 1 B. & Ald. 681; 19 R. R. 415. (n) Dunlop v. Higgins (1848), 1 H. L. Ca. 381; 12 Jur. 295; Finch's Selection of Cases on the English Law of Contract, completed Contract completed by letter posted but never received. Fire Insur- ance Co. v. CH. II. s. 1. Requisites of Contract (Assent). Household Fire Insurance Co. v. Grant. Revocation of offer by operate from posting. Henthorn v. Fraser. contract is complete at the time the letter accepting the offer is posted, even although it was never received by the person to whom it was sent (o); or though the person making the offer posted a letter of withdrawal before receiving the letter of acceptance (p). Both these cases arose upon allotments of shares in companies, but the rule upon which they were decided seems to be of general application. This rule, however, does not apply to the revocation of an post does not offer. Such revocation is not complete until it has been brought to the mind of the person to whom the offer was made, and therefore a revocation sent by post does not operate from the time of posting it, so as to prevent a binding contract being made by the posting an acceptance after the revocation of the offer had been posted, but before it had been received. This was decided by the Court of Appeal in Henthorn v. Fraser (q), in which also the rule that an acceptance 'is complete when posted was extended to a case where the offer of which it was an acceptance was not made by post, the circumstances under which the offer was made being such that it must have been within the contemplation of the parties (who lived, the party accepting at Liverpool and the party offering at Birkenhead, where he had handed the offer to the party accepting), that, according to the ordinary usages of mankind, the post might be used as a means of communicating the acceptance of the offer. Acceptance by post of not made by post. Effect of anticipatory revocation of accepting letter. But what is the effect of the revocation of an accepting letter communicated to the other party before the accepting letter is received? For instance, if a telegram be despatched after the posting of the letter of acceptance, and received before the letter of acceptance could be received, would the telegram, if rejecting the offer, and by anticipation expressly and unmistakably cancelling the acceptance, and in fact received before the acceptance, take effect instead of the offer, so as to make the acceptance void? This point was forcibly put by Bramwell, L.J., in Grant's case (r). "There is no case to show," said he, "that such anticipation (0) Per Baggallay and Thesiger, L.JJ., Bramwell, L.J., diss., Household Fire Insurance Co. v. Grant (1879), 4 Ex. D. 216, C. A.; overruling The British American Telegraph Co. v. Colson (1871), L. R., 6 Ex. 103, where the Court of Exchequer (Kelly, C. B., Bramwell, B., and Pigot, B.) unanimously held (distinguishing Dunlop v. Higgins) that there was no binding contract, until the letter of acceptance was received by the party who made the proposal. Delivery to a postman for posting is not posting: London and Northern Bank, In re, Jones, Ex parte, [1900] 1 Ch. 220, per Cozens-Hardy, J. (p) Harris's case (1872), L. R., 7 Ch. 587. (q) Henthorn v. Fraser, [1892] 2 Ch. 27, C. A.; applied to the exercise of an option to purchase rights, in Bruner v. Moore, [1904] 1 Ch. 305, by Farwell, J.; and see Raeburn v. Burness (1895), Comm. Cas., Pt. I., 22, where the communications were by telegram. (r) Grant's case, 4 Ex. D. at p. 235, by way of a reductio ad absurdum of the judgment of the majority of the Court. In Dunmore v. Alexander (1830), 9 Shaw & Dun. 109 (an unsatisfactory case) an acceptance was held cancelled by a letter delivered at the same time. would not prevent the letter from binding. It would be a most alarming thing to say that it would-to say that a letter honestly but mistakenly written and posted must bind the writer, if hours before its arrival he informed the person addressed that it was coming, but wrong and recalled." CH. II. s. 1. Requisites of Contract (Assent). letter, still The point seems still to be an open one upon the authorities (s), and not concluded by the actual judgment of the majority of the Court in Grant's case. And it is submitted that the rule of that Effect of case that a contract is concluded by the posting of a letter, though anticipatory revocation of not delivered, is merely an artificial rule induced by necessity; accepting that an actual communication of a refusal would prevail over a doubtful. communication of acceptance constructively ante-dated; and that such actual communication, reaching the offeror before the constructive communication could possibly reach him, would prevent the contract from being concluded by such constructive communication. It may be pointed out also, that if the artificial rule is to prevail it will comprehend the case not only of a rejecting telegram overtaking a posted acceptance, but of a rejection by word of mouth-on an unexpected meeting of the parties, for instanceimmediately after letter of acceptance posted. Surely in such a case the artificial rule would have to be either qualified or abandoned. But in the present state of the authorities, it may be prudent Practical for both offeror and acceptor to communicate the offer and accept- suggestions. ance by registered letter when communicating by post (t); and for an offeror to make his offer conditional on the actual receipt of an acceptance within some definite time (u). Contracts by telegram satisfy the Statute of Frauds, which, as Contracts by we shall see presently (Ch. IV., sect. 2), requires certain contracts telegram. to be made by signed writing (x), and an offer by telegram is 66 (s) See Anson on Contracts, 10th ed. (1903), at p. 34; Benjamin on Sale, 4th ed. (1888), at p. 57; and Pollock on Contracts, 7th ed. (1902), at p. 35; but these writers appear to think it probable that the point will not be decided as submitted in the text. English Courts may now be bound to hold that an unqualified acceptance, once posted, cannot be fevoked even by telegram or special messenger outstripping its arrival," it is said in Pollock on Contracts, at p. 36; but it appears from p. 35 that the writer considers that so to hold would be wrong in principle. (t) See Conveyancing Act, 1881, s. 67; Settled Land Act, 1882, s. 45; Agricultural Holdings Act, 1883, s. 28, as to sufficiency of service of notices by registered letter. (u) As suggested in Pollock on Contracts, 7th ed. at p. 38, where it is put that "the practical conclusion seems to be that every prudent man who makes (x) Godwin v. Francis, (1870) L. R., No contract is effected by letters crossing in the course of the post, but CH. II. s. 1. (Assent). Oral rejection of offer by letter. Rule as to mutuality. Conditional contracts. presumptive evidence that a prompt reply is expected (y). Where an offer is made through an agent by telegram, and accepted by telegram, the contract is complete, and the party accepting cannot repudiate the contract on the ground that his telegram has a meaning which would not be apparent to the agent or the other contracting party (z). Where a treaty is commenced by letter, and an offer made by letter is verbally rejected, the party who made the offer is relieved from his liability, unless he consent to renew the treaty (a). (c) Rule as to Mutuality. From what is stated above, it appears that the assent or consent of the parties to the terms of the agreement must be mutual, even although the promise of one of them be in itself positive and unambiguous. But, although this be the case, still it does not follow that an agreement will, in every case, be bad for want of mutuality, merely because each party cannot, from the time of the making thereof, have an action upon it, in regard to matters to be performed by the other contracting party. There are, certainly, cases in which, if it appear that the one party never was bound on his part to do the act which forms the consideration for the promise of the other, the agreement will be void for want of mutuality; but there are others in which this rule does not hold. Thus, an agreement by A. to supply goods to B. at certain prices and in such quantities as B. may order from time to time, is not bad for want of mutuality; although, until B. has given an order for goods he cannot sue A. upon his agreement (b). So, where a person says, "In case you choose to employ this man as your agent for a week, I will be responsible for all such sums as he shall receive during that time, and neglect to pay over to you;" the party indemnified is not, therefore, bound to employ the person designated by the guarantee; but if he do employ him, then the guarantee attaches and becomes binding on the party who gave it (c). In such cases as these, it is clear that there is the words "reply by return of post' (y) Quenerduaine v. Cole (1883), 32 (2) Roth v. Taysen, (1896) Comm. Cas. Pt. II., Vol. I. (a) Sheffield Canal Company v. Shef field and Rotherham Railway Company (1841), 3 Rail. Cas. 121. (b) Great Northern Railway Co. v. Witham (1873), L. R. 9 C. P. 16; Reg. v. Demers (petition of right), [1900] A. C. 103. (c) Per Parke, B., Kennaway v. Treleavan (1839), 5 M. & W. 498, 501; and see per Patteson, J., Mills v. Blackall (1847), 11 Q. B. 358; and see per Bayley and Holroyd, JJ., Payne v. Ives (1823), 3 D. & R. 664. |