Henthorn v Fraser
Court of Appeal
Citations: [1891 H 226]; [1892] 2 Ch 27.
Facts
The defendant granted the claimant an option to purchase some of the defendant’s properties. The defendant stated that the option would be open for 14 days. However, the next day the defendant wrote to the claimant withdrawing the offer. They posted the letter at midday, and it arrived after 5pm. At around 3 o’clock, the claimant wrote to the defendant accepting the offer. The claimant’s letter arrived after the defendant’s offices had closed for the day. The claimant sued for specific performance of the sale.
Issue(s)
- Was there a completed contract for the sale of the land?
Decision
The Court of Appeal held in favour of the claimant. The defendant had failed to successfully withdraw the offer before the claimant accepted it. The claimant’s letter of acceptance took effect the moment it was posted (under the postal rule). However, the defendant’s withdrawal only took effect when the claimant received it. By then, it was too late.
This Case is Authority For…
A posted acceptance is valid as soon as it is posted (this is known as the postal rule). By contrast, the offeror must actually communicate the withdrawal of an offer to the offeree: the postal rule does not apply. As Lord Herschell put it:
‘a person who has made an offer must be considered as continuously making it until he has brought to the knowledge of the person to whom it was made that it is withdrawn.’
Other
Where it is within the contemplation of the parties that one of them might communicate by post, post is a valid means of accepting an offer. This is likely to be the case where parties are communicating at a distance. However, what the parties contemplated must be assessed by reference to all the circumstances at the time of contracting.
Implicit in this case is the idea that the defendant was in principle capable of withdrawing the offer despite saying it would be open for 14 days. This shows that even where an offeror states that the offer will be open for a particular length of time, they can still withdraw the offer before that time is up.
