Offer And Acceptance

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Question : ‘ Offers may be withdrawn at any time up until acceptance’ Discuss the extent to which you agree with this statement and analyse the rules which determine the validity of the withdrawal of an offer. The English law on the formation of contract generally requires there to be an offer and acceptance. By the presence of both only then a legally binding bilateral contract can be formed. It is not necessary for a contract to be in a written form. A contract is an exchange of promises and it lies fundamentally at the heart commercial transaction. Contract is an agreement between a person who makes an offer which is known as an offeror and a person who accepts the offer which is known as and offeree. An offer can be accepted or even rejected. In addition to that, it can also be revoked at any time up until acceptance. This is also known as revocation of an offer. This principle was laid down in an old case of Payne v Cave . Once an offer has been accepted by an offeree, a binding contract is formed and the offer ends ultimately. Nevertheless, there are a number of rules apply in relation with the withdrawal of an offer. If an offeror withdraws from an offer but fail to communicate his withdrawal to the offeree, the offer is still considered as valid. Hence it is indeed vital for the offeror to bring the news of his withdrawal to the attention of the offeree. This can be seen in the case of Byrne v Van Tien Hoven whereby this case laid down the principle that an offer can only be withdrawn if it is communicated. Besides, the revocation of an offer does not have to be communicated by the offeror to the offeree personally as it could also be done by a reliable third party such as the offeror’s lawyer or agent. This was illustrated in the case of Dickinson v Dodds whereby the defendant offered to sell his house to
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