Ramsgate Victoria Hotel Co Ltd v Montefiore
Court of Exchequer
Citations: (1865-66) LR 1 Ex 109.
A hotel company was incorporated in 1864. The company’s prospectus stated that potential subscribers could place a deposit to be put on a waiting list to be issued shares. The company would return the deposit if they did not allot the shares.
The defendant sent an application to reserve 50 shares and put down a deposit. A month later, the company secretary forwarded the defendant’s name to the directors, but they did not think it a good time to allot the shares. The defendant subsequently withdrew his application. Two months’ later, the directors reviewed the list of potential subscribers and purported to issue the defendant 50 shares. The defendant refused to accept or pay for the shares.
- Was there a binding contract between the company and the defendant?
The court held in favour of the defendant. The company had a reasonable amount of time to accept the defendant’s offer and allot the shares. That reasonable period had passed and the offer was no longer capable of acceptance.
This Case is Authority For…
Where an offer does not specify that it is valid for a given amount of time, it will expire once a reasonable period has passed.