Revocation of offer

An offer can be withdrawn or revoked any time up until it is accepted.

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The principle that an offer may be revoked or withdrawn was established in the case of Payne v Cave (1789).

Revocation must be communicated, the offeror must notify the offeree that it is being revoked. In Byrne v Van Tienhoven (1880) the defendants posted a letter to the plaintiffs on 1st October offering to sell them 1,000 boxes of tinplates.  The plaintiffs received the letter on the 11th of October and accepted the offer on the same day by telegram with immediate effect.

On the 8th of October a second letter had been sent from the defendants withdrawing their offer, this was received by the plaintiffs on the 20th October. It was held that there was a binding contract as revocation could only take effect on communication whereas the acceptance by telegram had taken immediate effect when the telegram was sent some nine days before the letter revoking the offer was received. The contract had already been made.

The communication to revoke an offer can come from another reliable source.

An offer to keep an offer open for a specific time can be revoked at any point before it is accepted. That is unless there is some consideration from the other party to keep the offer open. By providing such a consideration an option is made as a separate contract.

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