Formation of Contract

6 Termination of an offer

The offer which comes to an end is considered as termination of an offer.

In order for there to be a valid acceptance, there must be an offer to which that acceptance is a response.

This principle requires not only that an offer has been made but is should remain in existence at the time of acceptance.

Offer may come to an end in a number of ways.

  1. Rejection
  2. Counter offer
  3. Laps of time
  4. Revocation by the offeror
  5. Death of one of parties
  6. Failure of conditions

6.1 Rejection

When an offer is rejected by the offeree ,it brings to an end.Offree cannot change his mind later on and cannot require the oferor to carry out his terms.

6.2 Counter offer

Counter offer is final rejection of original offer  and introduces new terms at the part of offeree towards offeror.

Offeree cannot suggest different or new terms which constitute a counter offer. In this original offeree becomes the new offeror as in the case of    Hyde vs. wrench.

In this case law it was decided that original offer of £ 1000 had been terminated by the counter offer of £950.

A counter offer may of course be accepted by original offeror,  as in the case law of  Butler machine tool co vs. Excel o crop.

A counter offer should be distinguished from “request for further information”  that is not a counter offer.

Example: what credit terms are you offering?

It is not a counter offer because such a request regarded as only for further information not proposing new terms ,as stated in below example.

Example: What would you say if I offered you £950 instead of £1000.

Now above example clearly shows that offeree had made new terms, which itself is an offer and that type of offer at the part of offeree is called counter offer.

6.3 Laps of time

An offer may not remain open for indefinite period of time. It comes to an end after the time specified in offer. If however there is no express time specified in offer then it will expire after a reasonable time period.

What is a reasonable time?
It will depend upon the nature of transaction and the circumstances as a whole as in the case law Ramsgate Victoria hotel co vs. Montefiore 1866

It was decided in this case law that offer was valid for a reasonable time and five month was too late.

6.4 Failure of a condition

The offer is not capable of acceptance if the terms and conditions specified in offer no longer met .So offer come to an end when there is any failure of condition as in the case law Financings ltd vs. Stimson 1962.

6.5 Death of one of parties

If the offeree dies then the offer cannot be accepted by his personal representatives, it will simply terminate the offer.

Offeror‘s death terminates the offer unless offeree accepts the offer in ignorance of the death and the offer is commercial nature.

Case law Bradbury v Morgan 1862.

6.6 Revocation of an offer

The offeror may withdrew his offer at any time before acceptance even though the time limit has not expired as in the case law Routledge vs. Grant

When offer is revoked the offeree is no longer able to accept it.

Revocation of an offer can be through :

  1. Expressed statements
  2. Any act at the part of offeror which gives clear indication that offer has been revoked.

6.6.1 Effective revocation

It requires that revocation is only effective when it is communicated to offeree that offer is no longer open.

It can be communicated directly from offeror to offeree


It can be communicated by any third party who is sufficient and reliable informant.

And after receiving sufficient reliable information about revocation, afferee cannot accept it.

As in case law Dickinson vs. Dodds 1876

Revocation would also be effective only when it was revoked by the person who has actual authority to do that.

6.6.2 Exception

Revocation initially takes effective when it is communicated to offeree but postal rule does not apply here .

According to this, letter of revocation would not take effective as soon as it was posted until it is received.

As in case law Byrne v Tienhoven 1880