It is not enough for an offeror simply to change his or her mind about an offer. This change of mind must be notified to the offeree that the offer is being revoked. This was the position held in the case of Bryne v Van Tienhoven (1880) in which the defendants, a Cardiff company, had, on the 1st day of October posted a letter to New York offering to sell the plaintiffs 1,000 boxes of tinplates. On receiving the letter on 11 October, the plaintiffs immediately accepted by telegram. Acceptances sent by telegram take effect as soon as they are sent (as will be illustrated in our write-up about the postal rule). In the meantime on October 8, the defendants had written to revoke their offer, and this letter reached the defendants on 20 October. It was held by the court that there was a binding contract because revocation could only take effect on communication, but the acceptance by telegram took effect as soon as it was sent (nine days before the revocation was received). By the time the second letter reached the plaintiffs, a contract had already been made.
Revocation of an offer does not have to be communicated by the offeror; the communication can be made by some other reliable source. This was illustrated in the case of Dickinson v Dodds (1876) in which the communication was through a fourth man.
An offeror who promises to keep an offer open for a specified period may still revoke that offer at any time before it is accepted, unless the promise to keep it open is supported by some consideration from the other party (by providing consideration the parties make a separate contract called an option).
In certain office situations, a great deal of mail may be received daily. Because of the volume, mail does not go directly to the person whose name is on the envelope, but is received, opened, and sorted by clerical staff and then distributed to the relevant people. In these situations there may be some difficulty in pinpointing when the information in the letter can be said to be communicated: is it when the letter is received within the company, when it is opened, or when it is actually read by the relevant member of staff? There is no authority on the point but the approach would probably be that communication occurred when the letter was opened, even though there may in those circumstances be no true communication.
Exceptions to the Communication Rule
There are two main exceptions to the rule that the withdrawal must be communicated to the offeree.
The first is if an offeree moves to a new address without notifying the offeror, a withdrawal that was delivered to the offeree’s last known address will be effective on delivery there.
Second, where a unilateral offer is made to the world at large, to be accepted by conduct, it can probably be without the need for communication if the revocation takes place before the performance has begun.