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On Monday, Albert inspected Betty’s car at her house in Rongai and offered to pay ksh 3,000,000 for it. Betty wanted Ksh 3,500,000. Later...

      

On Monday, Albert inspected Betty’s car at her house in Rongai and offered to pay ksh 3,000,000 for it. Betty wanted Ksh 3,500,000. Later in the day, Betty wrote to Albert and stated that she would take Ksh 3,200,000. The letter was received by Albert at his home on Tuesday morning. At 4.00 pm on Tuesday afternoon, Albert at his office in Westlands wrote a letter to Betty accepting her offer. On his way to post the letter Albert met Cuthbert who told him, ‘I gather that Betty has finally sold her car.’ Betty had, indeed, sold the car. Albert posted his letter and, upon arriving home in Rongai, discovered a message on his answer phone from Betty. The message had been left at 3.00 pm; Betty had stated, ‘I withdraw my offer.’ Albert bought a similar car for Ksh 4,000,000.
Advise Albert.

  

Answers

Brian
Albert v Betty.
A communication will be treated as an offer if it indicates the terms on which the offeror is prepared to make a contract such as the price of the goods for sale, and gives a clear indication that the offeror intends to be bound by those terms if they are accepted by the offeree.Albert makes an offer to buy Betty's car at 3,000,000. However she wished to sell it at 3,500,000 but instead makes a counter offer to Albert to buy the car at 3,200,000. In the law of contract, an offer lapses once a counter offer is made. In Hyde v Wrench (1840) the defendant offered to sell his farm for £1,000, and the plaintiff responded by offering to buy it at £950 – this is called making a counter-offer. The farm owner refused to sell at that price, and when the plaintiff later tried to accept the offer to buy at £1,000, it was held that this offer was no longer available; it had been terminated by the counter-offer. In this situation the offeror can make a new offer on exactly the same terms, but is not obliged to do so.
Further on It is not enough for offerors simply to change their mind about an offer; they must notify the offeree that it is being revoked. Before Albert could post his letter of acceptance to make the contract valid he heard through grapevine by a reliable source that Betty had already sold the car. In Dickinson v Dodds (1876) the defendant offered to sell a house to the plaintiff, the offer ‘to be left open until Friday, June 12, 9 am’. On 11 June the defendant sold the house to a third party, Allan, and the plaintiff heard about the sale through a fourth man. Before 9 am on 12 June, the plaintiff handed the defendant a letter in which he said he was accepting the offer. It was held by the Court of Appeal that the offer had already been revoked by the communica?tion from the fourth man, so there was no contract. By hearing the news from the fourth man, Dickinson ‘knew that Dodds was no longer minded to sell the property to him as plainly and clearly as if Dodds had told him in so many words’.Thus the revocation of an offer does not have to be communicated by the offeror; the com?munication can be made by some other reliable source.
In light of the above I can conclude that there was never a valid contract between the two parties that could bring forth an action for breach.
namanchu answered the question on January 30, 2018 at 17:31

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